As a result of unemployment, rising interest rates, and rising living expenses, a significant number of homeowners will be compelled to sell their homes this year.
Some will be forced to downsize, while others will be forced to rent or move back in with their parents, IOL reports.
At one end of the’reasons for selling’ spectrum, according to Andrea Tucker, director of MortgageMe, are financial pressures on households resulting from job losses and higher-than-anticipated living expenses due to inflation. As a result, individuals and families are downsizing their homes if it makes financial sense in the short to medium term.
Inflation became an issue almost overnight in 2022, according to Tony Clarke, managing director of the Rawson Property Group. To mitigate the repercussions, the Reserve Bank was forced to implement a much steeper increase in interest rates than anticipated.
This, coupled with rising living expenses, has a negative impact on buyer affordability.
As a result, he claims that buyer activity on the real estate market slowed, and distressed sales and downsizing increased.
This imbalance between supply and demand resulted in sluggish property price growth, with inland provinces facing additional pressure from ongoing coastal migration trends.
Clarke anticipates that these trends will persist through 2023, with nominal price growth remaining positive but subdued.
Grant Smee, managing director of Only Realty Property Group, concurs that talk of downsizing continues to be prevalent, particularly among middle-income earners.
In the past few years, many South Africans took advantage of low interest rates to upgrade and renovate their homes. However, the sharp increase in interest rates has prompted many to ponder whether to reduce their investments and cut their losses.
READ MORE: More people will be forced to give up their homes this year (iol.co.za)
In 2023, many consumers will reevaluate their financial situation as a result of the enormous pressure that rising costs exert on them.
However, he advises homeowners to do the math before selling.
Prior to making a final decision, it is essential to consider all of your options.
