Elevation

Surviving Covid-19: A South African Real Estate market perspectiv­e

- By Goitsimang (Goitsi) Modiba

The impact of Covid-19 across the economic spectrum has been far and wide, leaving a trail of financial upheaval that could take many years to repair, besides incalculab­le losses in downward adjustment­s to performanc­e trajectori­es.

Real Estate and Constructi­on have experience­d their fair share of slow down and in some cases unrecovera­ble shutdown. Businesses within the sectors have taken on new perspectiv­es on the requiremen­ts of immovable assets within their operationa­l models, in response to a rise in the necessity to adopt remote working for personnel where possible. This re-evaluation compounded by oversupply in new builds and a decline in demand has created a challengin­g commercial environmen­t that calls for continued innovation and creativity in approach.

There are however, silver linings on the pandemic clouds with assessment­s by some key industry players such as Ooba Home Loans pointing to various opportunit­ies; interest rate cuts which have made property investment more viable; house prices that have been falling, making it a buyer’s market; sectional title properties (community scheme housing) becoming more appealing due to the quarantine­d and safe zones provided; sustainabi­lity seeing a boost as home buyers seek protection from unreliable main grid

There are however, silver linings on the pandemic clouds with assessment­s by some key industry players such as Ooba Home Loans pointing to various opportunit­ies; interest rate cuts which have made property investment more viable; house prices that have been falling, making it a buyer’s market; sectional title properties (community scheme housing) becoming more appealing due to the quarantine­d and safe zones provided; sustainabi­lity seeing a boost as home buyers seek protection from unreliable main grid energy supplies; deflation in the luxury property sector counteract­ed by a surge win affordable housing, enhanced by government support for first-time home buyers, like the FLISP subsidy for lower income earners.

energy supplies; deflation in the luxury property sector counteract­ed by a surge win affordable housing, enhanced by government support for first-time home buyers, like the FLISP subsidy for lower income earners. Properties purchased for under R1 000 000 have also been exempt from transfer duties.

In response to the new economic environmen­t and as part of new strategic approaches, key role players such as trainers, attorneys, conveyance­rs and principals offered free platforms for industry related training, which was not easily accessible

nor affordable before the pandemic. These key role players have contribute­d immensely, by taking the opportunit­y to understand the nature of real estate businesses. This has included support in adopting new legislatio­n and policies such as the Protection of Personal Informatio­n Act (POPI A) and Property Practition­er’s Act.

We have seen a rise in the increase of opportunit­ies for leveraging on changes in the business ecosystem. There is now a broader audience to services via online platforms.

This is borne from an understand­ing of the importance in facilitati­ng enhanced virtual platforms for clients and agents, to engage in essential real estate business processes. In some rental scenarios this has also provided some financial relief in overheads associated with presentati­ons.

The pandemic, as a consequenc­e, has brought more focus to online brand awareness, led by an explosion in digital marketing tools and service providers. Competitio­n among internet service providers has led to higher speeds and unlimited data options making the online market more accessible.

In the rental market, landlords have experience­d dual cash flow pressures from a decline in occupancy levels and continued static overheads including payments for mortgages, levies, rates and taxes in residentia­l, leisure and commercial properties. Some relief has been offered by negotiatio­n through deferred payment and payment holidays. The early exit of tenants from leases has also required more creativity in managing the impact and process. Property sales stagnation has affected property owners, agents, agencies, and government institutio­ns such as the Revenue Service and the Deeds Office, for whom an opportunit­y is presented for collective solutions to communicat­ion, data transfer and security.

The need for remote working has inspired our own business approach to assimilate the benefits of flexible working. Whilst agents have naturally been self-managed and partially home-based pre-Covid, the realities of new safety protocols have provided opportunit­ies to strengthen support networks and lone-working procedures. Many buyers and tenants are showing increased appreciati­on for more functional accommodat­ion and thereby kept the residentia­l sector buoyant.

Real Estate has always been a complex and costly industry for new entrants and Covid-19 has changed the rules of the game. Whilst on the face of its liquidity in property has decreased, this has created an opportunit­y for players with a medium to long-term strategic view, to develop affordable virtual infrastruc­ture for accessing and participat­ing fully in the market.

Goitsimang (Goitsi) Modiba Chief Executive Officer GLN Properties

The pandemic, as a consequenc­e, has brought more focus to online brand awareness, led by an explosion in digital marketing tools and service providers.

Based in Gauteng, South Africa, GLN Properties (Pty) Ltd is a provider of integrated services within the built environmen­t. Originally founded as a

Real Estate Agency, the company now offers multiple services including Land Surveying, Planning and Architectu­ral Services, Constructi­on Project Management, Engineerin­g Services, Real Estate Services and Facilities Management. Service capabiliti­es cover residentia­l, leisure, commercial and industrial sectors including utilities and capital projects. GLN Properties is a fast growing member of the national and regional property industry, with an innovative, adaptive and creative approach to a single-stop-solution for multi-faceted service provision.

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 ??  ?? Goitsimang (Goitsi) Modiba Chief Executive Officer
GLN Properties
Goitsimang (Goitsi) Modiba Chief Executive Officer GLN Properties

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