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How the tough economy could change home buying patterns

08 Jun 2018

The combination of this week's fuel price hike and the sharp decline in SA's economic growth rate during the first quarter is going to increase urbanisation and intensify the demand for homes close to work, shops and schools.

That's the word from Rudi Botha, CEO of BetterBond, SA's biggest bond originator, who says that with agriculture and mining being among the biggest contributors to the drop in GDP growth, there may well be further employment cutbacks in these sectors that will drive more people to leave rural areas and head to bigger towns and cities in search of work.

"This is going to put pressure on the Department of Human Settlements and its private sector partners to deliver more affordable housing in urban areas, and on municipalities to fast-track their plans for inner city urban renewal and infrastructure improvements."

At the same time, he says, households are already feeling the pinch of the VAT increase and other tax hikes implemented in April and, given the predictions that this week's sharp fuel price rise will not be the last this year, many consumers who already live in urban areas are now urgently looking to reduce their transport costs by moving or buying a new home that is closer to their workplace or enables them to reach it via reliable public transport.

"Families with school-going children are increasingly also trying to live closer to their preferred schools in central suburbs or estates that are also well-supplied with other amenities, while young professionals opt for inner city areas and integrated suburbs where they can walk to the shops, restaurants, entertainment venues and gym and often dispense with owning a car altogether. The rise of ride-share services such as Uber have furthered this trend."

Meanwhile, says Botha, worsening traffic congestion in SA's large metros is already encouraging more companies to allow their employees to telework from home most of the time, with perhaps only one or two visits to the office a month, and this trend is likely to be spurred on now by rising transport costs.

"As a result, there is likely to be an increase in demand for properties with home offices - and for those with space to accommodate a home-based business, as an increasing number of South Africans also set up their own enterprises in an effort to make ends meet."

And finally, he says, internet-based businesses and companies with online shopping options are likely to see sales to home-based consumers rise significantly now, while property portals like Private Property can expect an increase in traffic as prospective buyers and tenants spend more time searching for homes online and narrowing down their choice before venturing out to view a few in person."

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