South Africa’s luxury housing dealers say the market is booming despite economic damage from the coronavirus pandemic. Real estate agents say the need to work from home and have better security are some of the drivers, while affordable housing for the poor remains a challenge. Linda Givetash reports from Johannesburg.
South Africa’s luxury real estate market saw an unexpected boom in 2021, despite the country’s broader economic woes.
Property analytics firm Lightstone reported that the luxury market experienced a six-year high in the total purchase value of transfers.
Realtors say the pandemic has played a role in inspiring home buyers to go big.
Charlene Negus is an agent with the Firzt Realty Company.
“Because everybody is now working from home, everything has changed. People now need almost like a study for every individual in the home. So, if you have two teenagers and two adults, you actually need four workspaces now because they all end up working from home. So, a lot more study space.”
She says backup electricity sources and updated internet infrastructure are among the amenities buyers are demanding.
They’re also considering the many ways they use their homes from work to play.
“People now need double the reception space because you want a facility where various parts of the family can have gatherings going on at the same time. Also, very importantly is the inside-outside feel.”
Still, the housing landscape is feeling the effects of the pandemic. South Africa has seen jobless rates top 35 percent.
It’s led to people selling their houses, downsizing and even moving in with other family members. Michelle Dickens is CEO of the TPN Credit Bureau.
“Overall, we actually saw deterioration in the number of sales in South Africa. In fact, we saw about a 15% deterioration in the number of sales from the preceding year. And we’re down about 50% from the decade prior to that. So ultimately, what we need is job recovery in order to encourage demand, both on the rental and on the ‘for sale’ side of the property market.”
Dickens says vacancy rates in city centers have been on the rise since the pandemic began.
At the same time the country has a massive housing shortage. The Centre for Affordable Housing Finance in Africa reports a shortfall of 3.7 million homes — and that gap is expected to grow by 178,000 homes every year.
It means 20 percent of urban households are in informal settlements.
Government housing isn’t being built fast enough and older houses in communities like Soweto are rapidly falling apart.
Benjamin Van Wyk is a pastor in the Kliptown neighborhood of Soweto.
“As a pastor I’m crying because this is not the only houses that looks like this. There are even others that is also worse. Even if we could have money, we would have built our own places. But because people don’t have jobs Even myself, I’m not working. My wife is not working. You see? So really, we are, we are not fine. We are not, we are not okay.”
The result is a landscape of extremes with slums and informal settlements on one end and luxury homes on the other.
Angelo Fick is director of research at the Auwal Socio-Economic Research Institute.
“So, the decreasing upper middle class will retreat into compounds behind fences, privatized estates, and sometimes even privatized cities. But that’s only sustainable in the medium term, that’s not long-term sustainability.”
The long-term outlook on the housing market is unclear while the effects of the pandemic play out.
Experts say only economic growth and a drop in South Africa’s unemployment rate will improve the landscape.
Originally published at – https://www.voanews.com/a/south-africa-s-luxury-homes-see-boom-in-demand/6421755.html
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