Flyt Property Investment’s asset manager Ryan Flowers
Owning vs renting in post-lockdown South Africa.
In the wake of, and – I hate to use the C-word (AND in shouty capitals) – the COVID pandemic, the property market at large, much like the rest of the economy, has taken some serious strain. So, where does this whole situation leave tenants and prospective buyers – should they keep renting or should they be looking at owning a buy-to-live property right now?
Even in a stable market there is often debate around this topic and the answer is not so cut-and-dried. That said, the current state of affairs, believe it or not, does present some real opportunities for both sides of the (picket) fence.
A buyer’s market
Hats off to the Reserve Bank who has cut the prime interest rate to 7.25%. This low interest rate environment (likely to persist for at least another three years) gives direct cashflow relief and interest savings to those with home loans. These savings mean improved affordability for those in the market for a new home, making it cheaper to own a dream home or give buyers the opportunity to afford something previously out of reach.
To quote a crazy old property economics lecturer of mine, “You make money when you buy property, not when you sell it” – given the current market and the low repo rate, this statement couldn’t be more apt – with the present situation lending itself to making good buy decisions that will increase the prospect of capital growth in the future. Furthermore, buyers are getting good value for their buck, with a well-priced, bigger property pool to choose from (with a pool nogal)!
There ain’t nothing going on but the rent
Understandably both landlords and tenants are worried about the coming months, perhaps even years. Although some respite has come in the form of reduced bond repayments, there has been a definite shift in the rental landscape. Flexibility has become a necessity when it comes to rental payment plans with existing tenants as hanging on to good quality tenants becomes the name of the game.
However, the drop in the repo rate means bond repayments have come down enabling landlords to reduce their rentals for existing tenants (albeit a short-term necessity), which is also fortunate for people seeking new rental opportunities who can possibly negotiate on rentals during this time. Some landlords may even consider foregoing deposits to help pave the (path)way, provided tenants tick the necessary boxes when it comes to affordability and creditworthiness.
What’s important now is for landlords and tenants to communicate with each other and be open to a different approach – to try and reach a mutually beneficial occupational / lease agreement.
When opportunity knocks
This unique boiling-pot of macro-economic factors is enough to give one a ‘Corona-ry’ but take a deep breath and clear your mind, because it actually presents a real opportunity for those looking to take their first step onto the property ladder – not only is there opportunity for buying – well, it is also more affordable than ever before to do so. And, if owning a property is still not within the means of your clients then now is the time for them to plot a sustainable way forward with their landlord.
About the author: Ryan completed his Post Graduate Degree (with Distinction) in Property Studies at the University of Cape Town and began his career at Proventus Property as an Asset Manager in 2013, managing residential and commercial developments, finance and various portfolios.
In 2015, Ryan was appointed Asset Manager and then General Manger of the Wiehahn Properties Portfolio, a national multi-sector portfolio and development company. Here he also served as a board member at several large residential developments and headed up the management of the property management division.
Ryan then co-founded NestEgg Real Estate, a digital real estate start-up, gaining invaluable insights into systems development, data analysis and call-centre management. In 2019, the opportunity arose to team once again with former colleague, Zane De Decker, on his exciting new venture, Flyt Property Investments.
Ryan’s near decade of expertise and unique skillset can best realise Flyt’s vision of the creation, delivery and management of high quality property assets.