The South African property market can be lucrative yet tricky during economic downturns. Housing and business space needs are always shifting. As the Gauteng Partnership Fund (GPF), we have always believed that empowering property developers not only helps them realise their dreams as entrepreneurs, but it also helps address the critical housing needs in Gauteng. As the country’s economic hub, Gauteng sees thousands of people coming in to seek job opportunities and accommodation monthly. The housing backlog in the province is estimated to be over 1 million.
But within every challenge in Gauteng’s property market lies an opportunity for those with vision and strategy. Just like any other business, you need to research market trends and their influence on your property business. Understanding different property types and what people want from them, as well as their pros and cons, is critical.
For instance, a study done by Urban-Econ in 2023 (https://shorturl.at/pmPfI) found that while demand for affordable housing in Johannesburg’s inner city has decreased, factors like employment opportunities and migration still drive limited demand. COVID-19 impacted tenants’ ability to pay rent, though many have since recovered financially, with some shifting to more affordable housing. These trends highlight both the challenges and opportunities in the affordable rental market for property developers.
When you know your market well, you can offer properties that match what’s current and what people need in terms of housing.
KEEP IN MIND:
1. Strong, experienced team: The importance of a strong and experienced professional team, especially the project manager, cannot be overemphasised. A skilled project manager ensures that the project runs smoothly, and choosing professionals based on merit rather than personal relationships can prevent issues.
2. Relationship with the municipality: Developing strong ties with local authorities helps streamline approvals and avoid bureaucratic delays.
3. Continuous learning: Staying updated with industry trends is crucial for maintaining competitiveness. Learn as much as possible if you are new to the industry – even an old dog can learn new tricks.
4. Proper planning: Thorough preparation minimises risks and unforeseen challenges, leading to successful project execution.
While the economy continues to be tough, making sure that you know your market and industry will help put you one step ahead when the going gets tough in the property market. There are still numerous ways to develop a successful property business if you follow the right steps even in weak markets and other adverse circumstances.
DID YOU KNOW?
If you have never drawn up a business plan, we offer comprehensive guidelines to help you prepare a thorough and professional proposal for your next affordable housing project. Access the GPF Business Plan Guidelines here: Download Here