Higher fuel prices, lower GDP and traffic will change home-buying in SA

The combination of the 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. Also, he expects prospective buyers and tenants 
to spend more time searching for homes online and narrowing down their 
choice before venturing out to view a few in person.

SOURCE:  Property24