Does remote work mean more buyers or more tenants?
Category RealNEWS
We're all familiar with the growing demand for properties with dedicated home offices or workspaces as large numbers of people continue to work from home.
However, says Gerhard Kotzé, CEO of the RealNet property group, it is less clear how the remote working trend is affecting home ownership rates. Are remote workers continuing to buy homes at the same rate as before, and where are they buying? Alternatively, if they are tending to rent rather than buy, that could be positive for buy-to-let property investors.
"What we see as a group is that remote work has made it easier for people to live in suburban and rural areas with lower housing costs, and to afford their own homes. There is still very strong demand for home ownership in SA, and this has definitely been enabled over the past few years by the remote working trend.
"Being able to work from home instead of having to commute has also drastically reduced transport costs for many families, boosted their disposable income and made it possible for them also to obtain home loans and become property owners rather than tenants."
But many people are also still feeling the negative economic effects of the Covid-19 pandemic, he notes, and cannot afford to buy at present. "Additionally, SA has a strong rate of urbanization, with people moving to its bigger towns and cities in search of employment opportunities and better living standards, and we see these two factors driving demand currently for rental properties in well-planned and accessible urban locations.
"Young people, in particular, are once more in search of affordable apartments and townhouses in high-density, urban areas where they can live and preferably walk to shops, restaurants, entertainment venues, gyms, medical facilities and public transport."
What is more, says Kotzé, these urban areas may not be anywhere near their place of employment now, or even in the same city or province. "For an increasing number of people, remote work now equates to the freedom to work, not necessarily from a permanent home base, but from a rental home in a place they wish to be for a few weeks or months at a time.
"And they are driving demand for fully-furnished and equipped rental homes in popular cities and sought-after tourism locations in SA - and around the world. They will often want to stay for just three or six months, but maybe for longer if they are 'digital nomads' in the true sense of that term. In any case, landlords keen to benefit from this trend need to be flexible, and to work with professional rental property managers."
It is also important to remember, he says, that remote work is only one of the many factors currently affecting home ownership and rental demand, and that prospective buyers should always seek the advice of a property professional who can help them make an informed decision.
Other factors they need to consider include:
- The economy, which is currently delivering challenges to property ownership and investment such as inflation, higher interest rates and electricity and water supply problems;
- Security and community, which are becoming increasingly important to buyers, particularly those with families. This is increasing demand for gated communities and developments with 24-hour security;
- Sustainability and eco-friendliness, which are also becoming increasingly important to buyers, and increasing demand for "green" homes that are energy-efficient and have low environmental impact;
- Demographic shifts such as an increased number of senior citizens who want both permanent and rental homes in retirement villages and assisted-living facilities, or traditional homes that have been adapted for ageing-in-place; and;
- The continued rise of technology which is expected to increase the demand for Smart home automation and, among investors, demand for digital property management solutions.
Author: RealNet
