After over a month in lockdown, the economic impact of Covid-19 is no longer speculation at this point, but rather proven fact, says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
“Even the largest player in the real estate industry, RE/MAX of Southern Africa, is feeling the impact of the national lockdown,” Goslett laments.
“Our sales in the first three months were going well, with February 2020 alone yielding an 8% increase in reported sales compared to February of the previous year. By far the biggest drop we saw was in April, which was down by 62% when compared to April 2019.
“When looking at our registered sales, the impact of the lockdown becomes even more apparent. In January, February, and March, we saw a 27%, 4%, and 5% increase YoY respectively from last year. However, in April, registered sales dropped by 54%,” says Goslett.
He warns that the industry has only just started to see the effect of the lockdown and that there will be a knock-on effect on the property market long after the lockdown is lifted. “There is about a two to three-month time lag between when the sale takes place (reported sales) and when the final proceeds of the sale reflect (registered sales). No sales in April means that there will be minimal registrations that reflect in June and July. The longer real estate services are unable to operate, the worse this downward spiral will get,” Goslett explains.
For this reason, he implores government to reconsider their current classification of real estate services. “Without real estate services, very few homes can be sold. This will put immense pressure on the sellers who need the cash to survive during these tough times, not to mention all those employed either directly or indirectly within the real estate sector who will go without an income unless they are able to operate. The longer this continues, the worse the situation will get. We urge Government to reconsider their classification of the residential real estate industry, which is currently only allowed to re-open at lockdown level 2, to give the economy a fighting chance for recovery,” Goslett concludes.
Picture: REMAX.CO.ZA
