The “feel good” factor is returning to the residential market, although just how quickly it will recover, and to what levels, is still too hard to call.
Data does not yet reflect the transactions of the last three months which estate agents have described as “surprisingly brisk”.
However, this welcome activity is taking place against worsening economic circumstances. More than 2m South Africans have lost their jobs as the lockdown, in its most severe form, severely reduced or put an end to business activity not considered essential.
Add to this the emergence of a “second wave” of Covid-19 in the northern hemisphere and it becomes apparent that it is still too early to predict the consequences of what was effectively an unprecedented global economic shutdown to a Black Swan event.
South Africa, though, has come through Covid-19 in better shape than was anticipated. Many sectors of the economy are open or opening, although some businesses have permanently closed down and others are reduced in size. While the high-employment tourism sector remains effectively shut to foreign visitors, its primary source of revenue, other business sectors are fully operational and gathering momentum.
Importantly, though, it’s gathering momentum while keeping an eye on social distancing, wearing face masks and sanitising. As the country navigates these unchartered waters, it is useful to look back at a previous recession to see how we rebounded and to revisit our scenario modelling of a few months ago.
The Great Recession of 2008-9 brought about the last pre-Covid19 dip in the South African property market.
That recession in SA lasted nine months although its impact on the property market filtered through in 2010 when we recorded the lowest number of transfers since 2001 - until of course the Covid19-induced recession.