Airbnb, rentals likely to stay sub­dued

Weekend Argus (Saturday Edition) - - PROPERTY360 -

THE JURY is out on whether the Airbnb mar­ket, and the rental mar­ket in gen­eral, will thrive or take a dive this year.

Gre­eff’s Mike Gre­eff says due to the over­sup­ply of Airbnb prop­er­ties and the num­ber of devel­op­ments, buy­ing in the Airbnb mar­ket will de­cline.

“There will be more sup­ply and lower de­mand, lead­ing to poorer yields for those look­ing to utilise their prop­erty for this medium. We be­lieve long-term rentals will out­weigh the trend of Airbnb un­til the mar­ket be­gins to pick up.”

The rental mar­ket and rental prices will “re­main sub­dued”, says Her­schel Jawitz, chief ex­ec­u­tive of Jawitz Prop­er­ties.

In ad­di­tion to fac­tors like pres­sure on dis­pos­able in­come, there is a sig­nif­i­cant over­sup­ply of rental stock on the mar­ket, es­pe­cially in the sec­tional-ti­tle mar­ket due to a large num­ber of new high-rise apart­ment blocks com­pleted in the past 12 months.

“Rental es­ca­la­tions will barely keep up with in­fla­tion in 2019 un­til the im­bal­ance be­tween sup­ply and de­mand im­proves.”

How­ever, Lew Gef­fen Sotheby’s In­ter­na­tional Realty’s Yael Gef­fen says the pre­vail­ing eco­nomic cli­mate will fur­ther en­cour­age in­vest­ment buy­ing to en­ter the rental mar­ket, which is grow­ing in many ar­eas.

“There are now many good in­vest­ment op­por­tu­ni­ties for those with dis­pos­able in­come.”

Other trends ex­pected this year are:

Life­style is be­com­ing more im­por­tant, says Gef­fen, and how peo­ple want to live is a key fac­tor in the buy­ing choice.

Prop­er­tyFox saw home­own­ers in­vest­ing more in this re­gard dur­ing the past 12 months, pur­chas­ing and in­vest­ing in prop­er­ties with bore­holes and rain­wa­ter tanks. The agency’s Nardee Cot­terell says they ex­pect this to con­tinue.

Cot­terell says the grow­ing need for safety has seen de­mand rise for homes within se­cu­rity es­tates.

“With only a few new se­cu­rity es­tate devel­op­ments close to the ma­jor hubs in Cape Town, es­tate prices will con­tinue to rise in 2019.”

SAProp­erty.com’s Charia Thatcher be­lieves off­plan pur­chases in new devel­op­ments will move much more slowly this year un­less builders tar­get en­try-level buy­ers in the R500 000 to R1.5 mil­lion prop­erty range. “Peo­ple want value for money and the high­er­priced devel­op­ments will move only if they tar­get a par­tic­u­lar mar­ket and lo­ca­tion.” One of the ma­jor trends is the in­creas­ing num­ber of peo­ple work­ing from home or run­ning their busi­nesses from their homes, says Do­gon’s Denise Do­gon.

“The blur­ring of live-work bound­aries and chang­ing needs are af­fect­ing the kinds of homes buy­ers want, es­pe­cially as more peo­ple work re­motely or are self-em­ployed.”

Homes with fi­bre con­nec­tion en­abling a seam­less work-from-home en­vi­ron­ment is the norm.

UN­CER­TAIN TIMESThe Airbnb mar­ket could be hit or miss this year for prop­erty in­vestors.

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