There’s no doubt 2023 was challenging for the local real estate industry. A Lightstone survey found less than 40% of estate agents surveyed achieved their volume or value sales targets in the year. In 2024, these professionals are hitting their stride with confidence. While the high repo rate, the general election, and budget speech changes may be impacting the market behind the scenes, practitioners are looking for silver linings. In response, Prop Data polled property practitioners to capture their sentiment for 2024, with commentary from local property practitioners on how to tackle the months ahead.
Unpacking the poll results
Between November 2023 and January 2024, Prop Data polled property practitioners to find out how they feel about the property market in 2024. The results revealed:
69.1% responded positively about the property market.
22.7% responded neutrally about the property market.
8.2% responded negatively about the property market.
The skew towards a positive sentiment is corroborated by Lightstone’s survey. In their findings, 73% of estate agents felt they would hit sales targets in terms of volume in 2024, while 72% said that they would reach sales targets in terms of value.
According to Benhard Wiese, Principal Agent at CCH, this may very well be a reality. “The majority of estate agents are upbeat due to the residential sales leads
which have definitely picked up during the last two weeks after a fairly steep drop since
December 2023 across all property portals and social media channels. Residential rental leads have in contrast escalated during November and December 2023 — very much in line with the ‘affordability shift’ in the 2023 residential property market.”
Jonathan Broekman, Principal at Homes of Distinction, says there is always a lag in a changing economy, and by now all real estate role-players have acclimatised and recalibrated to the current market conditions. “We all know that basic fundamentals need to change for the market to change — small tweaks in interest rates or an election is not going to swing the property market,” he shares.
Factors impacting market conditions
While complex, property practitioners agree that the interest rate (currently at 8.25%) remains one of the greatest factors shaping the real estate market. “Buyers have been adjusting themselves according to the interest rate ‘readings’ in the market. The huge ‘fence-sitting’ by buyers (and to a lesser degree by sellers) seems to be slowly but surely becoming something of the past. The interest rate plateau seemingly has been reached and most commentators are forecasting a drop in interest rates come middle-2024. A dropping interest rate will undoubtedly bring back more of the first-time buyers — a segment of the buyers’ market which left the market during the latter part of 2023 in droves,” says Wiese.
“Besides the interest rate changes impacting appetite, continuous load shedding and
decaying infrastructure has also contributed to a negative outlook — perhaps reflected in the 8% of negative poll respondents,” says Quinton Volkwyn, Sales Manager at Harcourts Rhino. “Foreign disinvestment due to corruption has adversely impacted employment, resulting in a sagging market. The migration of locals to coastal regions who can afford it has increased the volumes in the market and pushed the prices down due to competing properties.”
Unlike Broekman, Precious Thoka, MD and Operating Principal at Thoka Properties, is more convinced the uncertain political landscape is a significant factor that could impact the local real estate market. “It being an election year in South Africa has the potential to introduce unpredictability into the market, affecting investor confidence and decision-making processes. As political agendas and policies may shift depending on election outcomes, property practitioners may need to navigate evolving regulatory environments and anticipate changes in market dynamics accordingly.
“Additionally, the uncertainty surrounding political transitions could lead to delays in decision-making among potential buyers and sellers, further impacting market activity and transaction volumes. Therefore, property practitioners will need to remain vigilant and adaptable to effectively mitigate these challenges and capitalise on opportunities in the evolving landscape,” he says.
Positive signs on the horizon
Despite the more challenging factors, property practitioners can look forward to interest rate relief this year. Standard Bank chief economist Goolam Ballim believes there could be four interest rate cuts of 25 basis points each by the end of 2024. Property practitioners, like Wiese, say this will create a positive change in buyer sentiment and affordability.
“There have been talks in the media about an interest rate drop which will stimulate
activity again, bringing much relief to the market and practitioners operating in it,” says Volkwyn. “There also seems to be an adjustment in spending which has caused inflation to pull back late last year. During the season of summer, we always see an upswing in the market and 2024 has been no different which will hopefully continue throughout the year.”
According to Thoka, another great signal is that buyers are increasingly entering the market driven by favourable lending conditions. “Banks are showing greater willingness to grant more approvals for bond applications at 100%, especially in the lower market segment. This shift indicates a promising upturn in market activity, which is encouraging for our business and the industry as a whole,” he says.
Navigating 2024 successfully
As real estate professionals continue their journey through 2024, they will find it will take a proactive stance to capitalise on emerging opportunities while mitigating potential challenges.
“Stay on course and ignore the noise and distractions,” urges Broekman. “There is always a market and you just have to adapt to the conditions. Prioritise teamwork as you can’t do this job solo. Lastly, pace yourself for a tough year and make sure that you aren’t purely focusing on work.”
Wiese says competition levels will rise as candidate agents stream into the market. While in some areas there will be more than a hundred estate agencies competing for a “cake” of less than 40 sales per month, he says practitioners can still find a way to survive — and even thrive. “Educate yourself and become the best source of information relating to all things property. You should always put yourself in the shoes of the first-time buyer, the family buyer, or the luxury property buyer. Look at yourself through their eyes and produce results (service levels) way above that which you would expect from an estate agent,” he emphasises.
“We are in an industry that has many peaks and valleys throughout a practitioner’s career,” says Volkwyn. “Good financial planning, staying committed to your clients, and delivering a high-quality service will ensure longevity in an ever-changing, interesting, and dynamic industry.”
“My advice is to remain focused on the fundamentals of our industry,” says Thoka. “Despite the challenges we faced in 2023, let’s maintain a positive outlook and recognise that the only way forward is up. By staying resilient and embracing optimism, we can navigate through any obstacles that may come our way. Let’s continue to uphold professional standards, prioritise client satisfaction, and adapt to the evolving market landscape. Together, let’s strive for success and make 2024 a year of growth and prosperity for our industry.”