Forecasts of negative house price inflation and distressed sales have not materialised, as payment holidays and super-low interest rates provided an unprecedented safety net for South African consumers during the Black Swan of Covid-19 pandemic. As 2020 has shown, anything can happen. Industry experts attempt to make sense of the trends, as demand continues to outstrip supply for now and the full impact of the pandemic on South Africa's struggling economy has yet to be determined fully. Industry analysis shows that overall, property prices have been unusually slow to adjust to the evidently weak consumer fundamentals. In part, this is due to the nature of the crisis, which incentivised property ownership, as well as a concerted response from lenders that smoothed the impact on housing markets. This is according to the latest analysis shared in the FNB Property Barometer.

FNB Economists Siphamandla Mkhwanazi says, "Much of the reflation in 2H20 was driven by middle segments, buoyed by low interest rates as well as demand for bigger spaces to facilitate remote work. Part of this was also driven by tenants switching from renting to owning. It is unlikely that there is much of this demand left in the tank – Stats SA data shows that 66 000 professionals lost jobs in 4Q20, which does not augur well for mortgage demand. Furthermore, as pressure in the rental market intensifies, we expect more stock to be released into the market for sale. A combination of these factors is expected have a dampening effect on activity and, eventually, price growth in the coming months."

Residential property prices defied Covid-19 conventional wisdom in 2020, with Lightstone's house price inflation ending close to 3% at the end of the year, some 2.7% above their initial forecast made at the beginning of 2020 and 6% above the highest post Covid-19 prediction.

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