Clawing back from the devastating global cascade of the sub-prime collapse of 2008/09, the real estate market had a tried and tested economic textbook roadmap and traditional real estate models to successfully guide the process. However, as the modern business world has never had to contend with a global pandemic, the real estate industry, still adapting to digital and millennial disruptions, is going to have to write a new recovery textbook, says Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty.
“Additionally, the previous crash was a bona-fide collapse, largely due to bubble pricing and over-lending whilst the current collapse is due to completely unrelated and unforeseen circumstances, so it’s a very different kettle of fish,” says Geffen.
“The situation we’re about to see play out will not be the same as before and in many aspects, South Africa is likely to mirror the global forecasts for the market’s recovery trajectory and pattern.”
Second-home and vacation markets
Hardest hit will be the second-home and vacation markets which will have felt the impact almost immediately, but their recovery will not be the same.
“Once air travel returns, sales of second homes for holiday purposes in well-established and relatively accessible markets will pick up before they do in farther-flung, less developed locations, but properties like resorts where groups of people gather under one roof will be slower to make a comeback,” says Geffen.
“And in South African terms,