Expect a ‘new normal’ post-lockdown in real estate
MAIN IMAGE: Leo Mlambo, managing director Bondwealth Properties; Bryan Biehler, director Huizemark Franchise Group; Riette Bornman, STBB; Craig Hutchison, CEO Engel&Völkers SA.
Property practitioners are faced with many difficult decisions during the Covid-19 pandemic. In a world filled with so many uncertainties experts share some insight on key priorities to keep the lights burning in the new normal they will face post-lockdown.
This year will be remembered as the year that an invisible virus globally changed the world of work. Medical experts expect that it will take at least 18 months to develop a vaccine for Covid-19 – which means social distancing, face masks, avoiding social gatherings and keeping hand sanitizer at the ready will be with us for some time to come.
Amidst the turmoil and uncertainty, property professionals are faced with difficult decisions. Property transfers are not possible with the Deeds Office closed and municipalities not issuing clearance certificates. The newly-formed National Property Practitioners Council and various representative bodies have lodges appeals to government to open both the latter on skeleton staff, but to date no response has been received.
Even should the Deeds Office reopen as lockdown is phased out, it is expected that there will be delays due to the backlog to process property transfers, not to mention the possibility of further administrative hassles with renewing relapsed clearance certificates at municipalities.
So, in light of all this it is clear that life will not soon return to normal as we knew it a little more than a month ago. Property practitioners will have to find creative and innovative ways to adapt to a tough new world of business that lies ahead in the coming months.
Key in the ‘new normal’: Innovation, relevance and relationships
“We are living in a situation where we have to re-evaluate how we are going to do this in the future,” says Leo Mlambo, managing director Bondwealth Properties, “This is the new normal. Shaking of hands is out and ‘social distancing’ has become the new buzz word.”
Mlambo says even when lockdown is phased out, people will be cautious about making physical contact. It will be difficult to view and show houses, people may even be hesitant to meet for the signing of a property transfer. “The only thing to do now is to go digital and use video. We might even have to look at the digital signing of contracts,” he adds.
Innovation, relevance and relationships will be critical in the new normal and underpinned by communication says Bryan Biehler, director Huizemark. In this digital age people will have access to property information readily at hand. The role of the estate agent will be to interpret and explain the information to the client.
“Future proofing your relevance will be key,” he says. As a starting point this will involve aligning digital strategies with social distancing and the required hygiene/health requirements. Also keep in mind that ‘coronavirus’ implications could influence buyer behaviour going forward in terms of a need to possibly downscale and/or work from home.
“The human element and personal interaction in terms of steering the marketing, selling and transfer process to registration will be more important than we’ve seen for many years,” continues Biehler. An important aspect to look at is how agents engage with clients. These are hard times for many people who face uncertainty over job security, income and being able to afford a place to stay. “I believe agents should just carry on with their social media and media exposure as they have done previously and probably increase their presence without arrogance or lack of empathy,” he ends.
“Build your pipeline and start conversations right NOW! As a consumer, if a real estate agent (or anyone for that matter) reached out to me and showed compassion and seemed genuine, you better believe I’d remember that and go back to them when I was ready,” says US marketer Adrienne Zielasko. She says if she was thinking of buying a home, she’d be very interested in what a professional thought about the market and what’s going to happen (especially if it were genuine and thoughtful).
“This is not the time for estate agents to take a backseat if they want to have a competitive edge coming out of lockdown,” says Craig Hutchison, CEO Engel & Völkers SA. “We firmly believe agents should be using all the tools at their disposal to continue marketing properties and building relationships with clientele. Hutchison adds that they have also looked and learned from the experiences of businesses in other countries during this time. Real estate professionals globally are facing the same challenges. For example, a UK estate agent recently shared this advice with buyers: Buying and selling a home during the coronavirus lockdown.
Traditionally personal interaction and being out there has been the nature of the property industry, but being forced into the lockdown has forced them to work creatively with what they have says Myles Wakefield, CEO of Wakefields Real Estate.
Thanks to technological advances there are plenty of ways that estate agents can keep in contact with clients, market listed properties and even partially process property transactions. During the lockdown many ‘old school’ agents were boasting on social media platforms about their newly found skills with online conferencing apps and learning about video and 3D virtual property tours.
Wakefield says although nothing can replace walking through a property, prospective buyers can get ‘virtual access’ to listed properties through video tours, 3D virtual tours and great imagery.
A further strong focus now should be on upskilling for the future. Wakefields agrees that the ripple effect from the pandemic will be with us for some time to come. It will impact how we interact with others and he expects that there will be a rise in innovative technologies to bridge the gap.
There’s no doubt facing the ‘new normal’ presents daunting challenges to the real estate industry, but it also presents opportunities to find innovative and resourceful ways to serve in people’s property-related needs. Lastly, remember there will always be people who are able to benefit from the current favourable conditions to invest in buying a home.
Golden opportunity to invest in property
Predicting the property market is not an exact science and a degree of speculation is unavoidable says Riette Bornman, associate conveyancer and notary public with STBB. “Despite the uncertainties, we do know that the repo rate has been lowered by 1%, which lowers the prime lending rate to 7.75%. This might prove to be a golden opportunity for those who are in a position to make the most of it,” she continues.
Property leaders say this is the lowest prime lending rate in 25 years. Add to this lowered transfer costs and a generous supply of properties and you can rest assured that “there will be buyers and investors who will be able to take advantage of the favourable buying conditions,” says Biehler.
Will the banks still be as keen on approving home loans as they were prior to lockdown? There is an expectation, with so many facing loss of income because of the Covid-19 restrictions, that banks will be more cautious about approving home loan applications. Commenting on the matter, BetterBond CEO Carl Coetzee says it is unknown at this stage exactly how banks will respond to home loan applications after lockdown, but he agrees that there is a strong likelihood that it will be with caution and that the qualifying criteria will be more stringent.
“It seems unlikely that banks will grant 100% home loans as readily as in the past, and because the cost of funding loans will be more expensive, the could potentially also result in lower interest rate concessions than we have seen in recent months. Furthermore, banks may potentially re-price their future offers, as well as re-assess approvals in cases where the applicant’s circumstances have changed,” he says.
That said, our hope is that healthy competition between banks will continue which will allow for good lending and ultimately benefit customers. “It’s important for the economy that banks continue lending money in a responsible manner to keep the property market stimulated,” ends Coetzee.