The present pandemic has accelerated many trends within the market. The main accelerated trend was the need for technological solutions to enable remote working. Businesses have had to evolve to align with Covid-19’s regulations, restrictions and constraints.
An important aspect of the property industry worth discussing is the impact of the Coronavirus pandemic on valuations. Valuations assert a calculated value on a property based on a set of parameters. Usually, the value is based on historical values, the transaction value (better known as the market value), and the income-generating value. During the lockdown, the property industry and its processes were halted as workplaces closed their doors. Deals were put on the backburner and no transactions occurred for several weeks. Deals that were concluded did not transfer as the Deeds Office was closed and so re-opening faces a huge backlog.
Topic Two of the Round Table Discussions was conducted at the end of May.
Quoin Online and URERU have joined to create round table discussions which investigate and facilitate discussions on how the pandemic impacted the property industry and its processes.
Topic two was facilitated by Francois Viruly and Robert McGaffin from URERU and our two participants, Deon van Zyl, Chairman of the Western Cape Property Development Forum, and Derek Henstra, managing partner at DHK Architects.
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Quoin Online has supported an NGO programme in Kewtown, Athlone for the last two years. BABS (Build a Better Society) had been started almost 45 years ago by Professor Richard van der Ross (the first rector of UWC) and the first social worker in the area, George Gibbs. Currently the programme runs an educare centre for 100 children, aged from 6 months to 5 years. It also runs a seniors programme and provides social programmes and meals to the elderly in the area.
Prior to the global pandemic which has, and will have, severe economic consequences, the property industry was taking strain. The Urban Real Estate Research Unit, based at the University of Cape Town, had concluded that the vacancy costs for a landlord had increased from 6 months of lost income to 18 months by the beginning of January 2020. This, together with rising operating costs and increased rates and taxes, has meant that landlords need to find more efficient ways of filling their vacancies, together with reducing the cost in doing so. Fears are mounting that the impact of Covid-19 could potentially result in thousands of job losses with businesses closing and vacancy rates spiking sharply. However, these changes are cyclical and structural and as some businesses close, other new industries are created. It is anticipated that the Covid-19 pandemic may just have accelerated the disruptor effect and that certain technology changes and shifts in behavioural patterns may occur sooner. This may well be the case for remote learning, online shopping etc., but it will still be important for humans to socialise, party, attend shows and other recreational activities.