Letter from the editor

IF WE needed more evidence that the poor suffer the most in economic downtimes, we had only to look at recent Lightstone figures. While almost every market segment showed a positive upward trajectory (not by much, mind you), the market for homes under R250 000 has shrunk drastically in the past few years.

There are two schools of thought here. One is that things have improved for that sector, so people can hang on to their homes, build on to them and rent out the new section. The other is property prices in that bracket have improved, knocking them out and over the R250 000 range. And then there is thought that the poor do truly get poorer.

Whatever the analysis on the Lightstone figures is, overall, the picture for the property market is glum – except for the market for mid-level homes, between R250 000 and R700 000, which has recovered to just above 2016 levels. In one of its latest reports, Lightstone, which provides data and analytics on property, says the residential market bounced back last year after a tough 2020, when the market was completely shut down for months.

However, the low-value market (under R250 000) has declined significantly in recent years. Last year, 53 384 transfers were registered, compared to a six-year high of 82 985 in 2016.

While there was recovery in other markets, the performance across all five bands is “poor to pedestrian, with just the high-level band performing positively”.

Hayley Ivins-Downes, head of digital at Lightstone, believes until the macro environment improves, it is unlikely the property market will recover either, although “there have been pockets of resilience and growth in certain geographical areas and price bands”.

She says high-level transactions (R700 000 to R1.5 million) were at a six-year high last year, as were luxury transactions, and the super luxury market was not much short of its 2016 high. The data, she says, confirms middle class and wealthier homeowners are better weathering the economic storm.

Talking to estate agencies, many in Cape Town and along the Atlantic Seaboard – areas that are seeing a surge of semigrants and overseas buyers – had a good March. Rentals are also seeing a gentle rise.

However, with rising fuel and food costs, not to mention rising interest rates, whether the overall markets will improve or go back to their downward slide of the past five years will be something to watch.

We hope the government and local metros do all they can to create the right environment so all citizens can have, and keep, a roof over their heads, including looking at helping the micro developers providing rentals in the townships, and enabling developers of low-cost and affordable housing.

Let’s see.

Vivian Warby | vivian.warby@inl.co.za