Century 21 CEO Harry Nicolaides says ‘Love where you Live’

… and discusses South African property market post-elections and how interest rates cuts would set the stage for a great recovery in property sales in the near to medium future

by Tia

Four months ago Century 21 South Africa CEO Harry Nicolaides was quoted as saying that there were signs the South African property market was starting to recover, with welcome signs of growth in the real estate sector

Said Nicolaides: “There has been an improvement in the rate of sales in the local property market in the first quarter of 2024 compared with the same period last year.

“Interestingly, this positive phenomenon has been driven on optimistic market sentiment alone, as the country has not had any interest rates cuts so far this year. Therefore, we expect even higher sales activity the moment the interest rate cutting cycle begins which has been predicted to occur in the second half of 2024,” he said.

Nicolaides also felt that some potential buyers and investors were waiting to commit until after the general elections. So what are his thoughts now?

Is the Government of National Unity (GNU) going to be good for the property market?

Although ideological differences do have a bearing on policy decision making in a Government of National Unity, and where it then inevitably makes it less stable than a majority government, I think managed correctly, it is the best outcome we could have wished for in our current South African political environment and the massively diverse desires of the local electorate. The positive remarks and comments made after the President’s cabinet announcement by the individual party leaders who form the GNU, install a sense of unity and hope for South Africans. Provided some tangible outcomes are realised sooner rather than later, this all bodes well for the property market in South Africa. As the weeks and months go by, positive sentiment will return fairly quickly creating a bullish property market which has been somewhat protracted in the last two years or so.

What do you believe is going to happen regarding interest rates and how will this impact on the property sector?

Most economists are still united in their belief that interest rates will start dropping on the back of reduced inflation pressures and the only debate still on the table is the timing. Some believe that we will see interest rates start dropping towards the end of 2024 while other believe this will only start in the first half of 2025. The peaceful election and an inclusive and smooth formation of a GNU certainly helps to stabilise the value of the Rand and this in turn helps with stabilising and even reducing inflationary pressures. Interest rates are the single largest contributor to property sales activity so a reduction in interest rates will set the stage for a great recovery in property sales in the near to medium future.

We are over six months into 2024, are there signs of an improvement? Which areas are showing the most growth?

Yes there are already signs of improvement especially in the last three months where we experienced the positive effects of the end of the interest rate hiking cycle, followed through by peaceful elections and now the general acceptance of the results and the formation of the GNU. For Century 21, year on year, we have matched last year’s results and have not experienced a decline in property sales volumes nor in value. This is unlike the USA market whose year ended just 6 months ago (December 2023) and they experienced a 15% decline in volume and values. There are many areas spread throughout the country where growth occurs, and they are certainly not confined exclusively to the Western Cape, as popularly believed. Most people love where they live, wherever it may be, as a result of it being their birthplace, childhood upbringing, familiarity, family and friends, schooling and importantly, work. So there are many provinces, cities and towns experiencing growth. Specific growth nodes in each of these territories is determined by the type of property, value, convenience, security issues and generally the state of the local municipals services delivery and infrastructure.

What properties are buyers are most interested in?

Buyers prefer purchasing in secure estates or in suburbs where security is monitored and controlled. The reason for this is obvious. More affordable sectional title units – flats and townhouses – are also in favour especially for new entrants into the property cycle where affordability is a factor. There is always a misconception amongst analysts who love to rate which are South Africa’s top suburbs and this must be addressed. A ‘top’ suburb needs to be further defined meaning. Is it the most desirable suburb? The most expensive and exclusive? The one reflecting the most price growth? A top suburb may not be because of any of these factors but may be because of its affordability, position and desirability, and these factors drive market demand and a good rate of sales. So, in real estate terms, a top suburb is one where there are more purchasers than sellers at any one time and not an expensive and exclusive suburb where only a handful of properties are sold a year due to a lack of prospective wealthy purchases.

What growth trends are you currently observing?

No doubt the affordable and entry level market up to the R1,8 million price has the most growth and this trend has been around for years. South Africa is unique due to our unfortunate and sad history which has created a situation where we still have millions of people aspiring to own their own homes and this price ceiling is affordable in the formal sector of our population. Additionally, it seems that millennials and Gen Zs prefer smaller lock-up-and-go units to fulfil their desire to explore and travel and spend most of their budget on life experiences instead of bricks and mortar.

Advice for sellers?

The best advice we could give sellers no matter their location and no matter the price category they fit in, is to ensure that their property is always presentable and orderly and then to ensure that it is priced correctly. They need to remember that neither they nor their appointed agent will be buying the property but the market out there comprising qualified and able purchases will be buying the property and these prospective buyers do compare their property to whatever else is available. So, if a selling price for what the buyers are seeing makes sense, the likelihood of a successful sale is good. If not, it merely creates frustration, disappointment and delays in selling the property.

Advice for buyers?

The purchasing of a property is a long term investment and therefore, it makes good business sense for a buyer to appoint an agent that is an area specialist with specific local or suburb knowledge and that has got all the technology and tools and systems to ensure that the purchase price is indeed market related, that they can provide historical and predict future trends based on factual data and that the agent can present them with a few choices for the sake of comparison and variety.  

Anything else you would like to add?

There is no doubt that the absolute majority of South Africans are peace loving and aspire for a better life for themselves and their generations to come and, if this is reflected in their choice of an elected government under free and fair elections, then our future is bright and secure. We need the newly elected GNU to play its part because we live in one of the most beautiful countries in the world with a diverse array of people of different cultures and these two factors alone are the ingredients for a happy and fulfilled life for all of us. We need to Love Where We Live, and nobody, including the GNU, should take that aspiration away from us.

You may also like

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!