Work from Home: The Future of Real Estate?
Category Market Insight
Work from home life has posed challenges (and benefits) to which many Capetonians have adjusted. Reliable high speed fibre, juggling kids, and setting up a home office has become essential with some forecasts showing that 33% of employed South Africans will be working from home as the new norm. The results of this global trend being accelerated by the pandemic are already being felt in the Cape Town property market. But is work from home really the new normal?
Work From Home Property Trends
The impact of work from home on the real estate sector in the Western Cape is clear. Work from home arrangements becoming so much more commonplace, coupled with record low home loan premiums has created motivated buyers willing to spend more than ever. As of April (2021) first-time home buyers spent an average of R1.12 million, with the highest ever recorded average at R1.138 million in January (2021).
The work from home movement has driven some super interesting demand trends in the residential property market:
- City centre residential demand is down: residential vacancy in Cape Town city bowl at record low 28.8% in the second quarter of 2021.
- Northern suburbs residential demand is strong: residential vacancy in the northern remains steady at 5%.
- Southern suburbs residential demand recovering: residential vacancy rates in the southern suburbs have recovered from the 2020 dip to 12.9%.
- Over a 6 month period between Dec '20 & May '21, 2 bedroom property sales outstripped 1 bedroom sales by 316.69%.
What are First Time Buyers Looking For?
Work from home trends are influencing what first time buyers are looking for in homes. Two bedroom apartments and houses are much more desirable than ever before because they allow professionals to set aside a dedicated work environment. Additionally, residences with gardens are increasingly in demand because they allow people working from home to decompress and to 'get out of the house' more often.
What Does This Mean for Sellers?
Putting together these trends and demands means that owners looking to sell properties with a garden and at least two bedrooms can expect healthy interest from buyers. However, the market valuation for properties is still dependent on a number of factors including the sales prices of properties in the area. Owners looking to sell in a work from home world can rely on the expertise of experienced real estate agents to help them get the right price.
Author: Paul Wasson
