What does the rest of 2022 hold for real estate investing?

Rising interest rates, reduced Covid restrictions and increased spending are just some of the factors influencing the housing market. What does this mean for the real estate market in 2022?

Over the past two years of the pandemic, the real estate industry has seen some interesting trends that, for the most part, have had a positive impact on the market. Record levels of interest rates coupled with a surge in demand from first-time buyers have resulted in real estate companies reaching heights never seen before.

The recent change in Covid restrictions gives us a taste of normality; rugby stadiums will start to fill up, events will be back on the cards and hopefully economic growth will be revived. From a property perspective, a return to normality will see increased activity in areas that have been heavily impacted by Covid. We will see increased interest in joining the industry, developments will gain momentum and interest in portfolio diversification will return to light.

Consumers are tightening their belts

There are also negative effects. The interest rate will climb back to its pre-Covid range over the next couple of years and steadily rising fuel costs, leading to increased spending by all households, will play a major role in affordability. It’s hard to ignore that consumers are tightening their belts and many are in a price pinch situation, which is impacting consumer confidence. Buyers may be a little more cautious, but that doesn’t mean they won’t buy.

What we need to understand is that in an emerging market like South Africa with huge potential for economic growth, real estate will always be a fantastic investment avenue. Capital growth in high demand regions remains steady and, under the guidance of your real estate agent, the world of primary and secondary use real estate investment presents an abundance of opportunity.

You just need to know what you are looking for and how to get it. Open your eyes to alternative options, explore a range of regions, and talk to as many people as possible. Knowledge is your best ally.

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