South African homeowners are feeling the pinch
South Africa’s stagnant economy has seen a decrease in home upgrades and maintenance according to the perception of surveyed estate agents. Upgrades have taken the hardest hit, while general maintenance has not dipped as much. South African property owners have been advised to brace themselves for further financial constraints.
A recent FNB Estate Agent Survey has recorded a weakening in agent perceptions of overall home maintenance and upgrade levels in the 1st half of 2018. The perceptions revealed a decline in the level of upgrades to homes with general home maintenance levels decreasing only slightly.
John Loos, FNB Property Sector Strategist says these results reflects financially constrained homeowners, who are clearly cutting back on home-related extras such as property upgrades, and opting to rather keep up with general home maintenance which is less costly.
Positively, homeowners aren’t feeling as constrained as they did in the 2008/9 recession, which according to Loos is important good for mortgage lenders who want to see the value of the property that is backing their loans being maintained as much as possible.
The results of the survey are as follows:
- Owners who invest largely in home upgrades has decreased by 7.35%.
- Owners who are maintaining their homes well and making some upgrades increased by 4.5%.
- Owners who are not still maintaining their homes but upgrading them minimally rose by 1.5%
- Owners who are maintaining their homes to a basic degree rose by 2%.
- Owners who are doing almost no maintenance on their homes decreased by 1.%.
Loos concludes that those looking for property to rent out and homeowners in general should brace themselves for the above trends to continue. South Africa’s economy is forecast to remain weak in the near future, while tax-related expenses will continue to rise. Home maintenance levels could see a further decrease as homeowners tighten their budgets to guard themselves financially.
