Coastal semigration attracts work-from-home buyers
Even before Covid-19 struck, the movement towards working from home had been slowly gaining momentum globally, as many corporates looked towards ways to alleviate transportation challenges for their employees, especially long hours spent in traffic, and increase quality time with their families.
What the pandemic has done, however, is fast-forward this movement significantly along its timeline, with scores more desk-bound office workers and the companies they work for realising that, thanks to advancements in technology in recent years, work-from-home scenarios can now be the norm rather than the exception.
The result in the residential market, says Carl Coetzee, CEO of bond originator BetterBond, is that: "Many people are now looking towards semigration to take them away from their traditional offices in big cities and into permanently remote working scenarios. And they're doing this not only to change their work habits but to take them to better lifestyles in smaller towns, especially along South Africa's coastal regions."
There are numerous factors that add to the attractiveness and very real possibility of this now for homeowners, notes Coetzee. His company is witnessing first-hand the obvious surge in the buyers' market that has taken place since July this year, with a substantial increase in prospective homeowners applying through bond originators to secure the best bond rates.
"First of all, there is the necessity of social distancing because of Covid-19, which has enabled the realisation that it is very possible for many people to work from home. That has no doubt been the trigger. But, secondly, we are also consequently experiencing 50-year, record-low interest rates, which means that home loans are more accessible than they have been for a long time to a wider range of buyers.
Thirdly, notes Coetzee, and of particular significance in regards to 'resort' destinations such as coastal towns, is that the holiday home market hit a decline earlier this year, with many homes coming onto the market as Covid-19 took its course.
"This has provided enormous opportunity for those looking to buy these properties now as full-time, live-in homes, and work long-distance in environments very different from those of big cities like Johannesburg," he says.
The semigration movement is also seeing a reinvigoration of many coastal towns themselves, inhabited largely in the past by retirees, and which are now experiencing an influx of younger families who in the past were tied logistically to lives in big cities.
This influx is backed up by the Residential Property Index published in September 2020 by Lightstone Property which notes that coastal municipalities have been performing better in general than those inland.
According to the index, while the average year-on-year national house price inflation at the end of August remained stable at 2.1%, coastal provinces on the whole averaged much higher, with Mpumalanga at 6.1%, the Eastern Cape at 5.6%, KZN at 5.2% and the Western Cape at 3.8%.
Remarking on feedback that BetterBond receives from estate agents working across the country, Coetzee cites the northern KZN and the Southern Cape coast as the coastal areas garnering the most attention overall. For instance, RE/MAX Lagoon Estates makes the point that, "There has been a boom in property sales along the coast." The agency reported a record-breaking sales month for October 2020, accumulating their highest sales figures in their 15-year history of selling properties within Langebaan on the Cape West Coast and the surrounding area.
Smaller coastal cities such as Port Elizabeth and East London have also seen a surge in sales, since residential agencies were once again allowed to open their doors in June. Port Elizabeth agents in particular are seeing unprecedented sales activity, making it the leading metro currently in the residential housing market.
"Had Covid-19 happened just a few short years ago, this acceleration to remote working would not have been possible," notes Coetzee. "But technical advancements in internet connectivity now enable a cyber office environment that will see increasing numbers of people able to choose exactly where they want to live.
"We are on an interesting trajectory in the property market, and one that may be a huge stimulus not just for coastal towns but for small towns across South Africa."