KEY THEMES: The pandemic has not had as chilling an effect as initially expected: Prices growth has held up and volumes reached multi-year highs, particularly in middle-priced segments, in contrast to initial expectations.
The aggressive reduction in interest rates (and mortgage rates), good pricing and lower transfer duties have momentarily improved mortgage affordability and incentivised renters to buy property. In part, this has contributed to rising flat vacancies and, subsequently, low rental inflation.
The impact of the pandemic on labour markets has been disproportionate: Low-paying occupations have been more severely affected, and professionals relatively insulated. In part, this explains an uptick in property sales due to financial pressure in lower-priced segments. In wealthy segments, however, income losses are exacerbated by their exposure to financial markets (mainly via dividends), corporate income (self-employment) and rental income.
Overall, the impact of the pandemic is more visible in the rental market, relative to the home buying market. Take a look at the FNB Residential Property Barometer for November 2020 here
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