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The Effects of a Technical Recession on the Property Market

We can only speculate, based on the current property trends in South Africa and the fact that 2018 was dominated by a high appeal and demand for sectional title apartments, that 2019 will be a better year for the South African property market. This is partly due to this continued interest in sectional title apartments from people entering the property market. This demand is most likely due to the lifestyle it offers under property management solutions as well as the economic implications.

The 2018 Technical Recession

When a country undergoes two or more quarters of negative growth the country enters what is referred to as a technical recession which was the case in 2018 in South Africa.

As South Africa continues to emerge from a technical recession the GDP continues to decrease. According to the statistical release from Stats SA - real gross domestic product dropped by 0.7% in the second quarter of 2018. The previous similar dip resulted in a recession.

The 2.2% climb in the GDP in the third quarter of 2018 brought an end to South Africa’s second recession since 1994. With the economic growth pushing the GDP back into the green things should be looking up in 2019.

What Does This Mean for The Property Market?

Some people may remain totally unaffected in the property market in the wake of the recession as an individual’s personal financial circumstances remains the determining factor when it comes to buying and selling as well as renting or letting property.

That being said there are some trends associated with a technical recession that will have a general impact on the South African economy which all markets, including property, will be affected by in some shape or form. This is especially true for first-time buyers entering the property market while the rand is weak. The most important thing to remember when it comes to buying property in any economic climate is to buy within your means with extensive property market research to back any decision you make.

This means that it is more important than ever to have reliable and professional property solutions to ensure all else runs smoothly. They can help you understand all the legalities involved in buying a property and make you aware of any hidden costs.

Demand for Sectional Title Properties Still in High Demand

Due to sectional title properties presenting buyers with generally more affordable housing, along with multiple lifestyle benefits, the demand for these properties will remain high in 2019. property management solutions ensuring everything from shared space to security is run like a well-oiled machine makes these properties a continuously attractive option to buyers and renters.

 

If you require professional property solutions for your complex or body corporate to ensure your sectional titles remain well managed and desirable in the 2019 property market contact us at Mansfield PS.

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