There has never been a better time to invest in property. This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa.
He says that since interest rates are sitting at a 30-year low, coupled with the fact that the South African property market is currently favouring buyers, opportunity for solid property investments abound.Surprisingly, despite the favourable conditions, many buyers are still not beating down the investment door in an effort to take advantage of the good deals on offer, he says. “Unfortunately, it appears as though the recession has, to some extent at least, made buyers wary of big purchasing decisions. This is understandable as before the crisis credit was far easier to come by and a number of South African consumers got severely burnt by over-extending themselves. The number of distressed properties that came on to the market as a result bears testimony to this.
”However, Goslett says that the fact that there are so many properties on the market makes it the ideal time to invest. “Timing in the property world is everything. Buy too late when stock is short and property prices are unrealistically high, and you could struggle to sell, at least in the short term. Buying at the right time, when there is ample stock and prices are low, can and often does, reap solid rewards for those willing to invest.”One of the biggest problems South African consumers have been facing is access to finance. Goslett says the National Credit Act as well as the recession forced the banks to re-evaluate the way they conducted business. Raising finance for property became far more difficult than before and banks also demanded larger deposits. “This, however, is slowly beginning to change and while it seems that South Africans are going to have to get used to the idea of putting down a deposit, the deposit amounts the banks require are gradually declining. Financial institutions are also now granting more bonds than in the last two years.”First-time buyers, in particular, are finding it easier to raise finance providing that they have a clean credit record and are not over burdened by debt. “Anyone considering investing in the property market should approach a bank or a mortgage originator to ascertain exactly how much they can spend. Forewarned is forearmed and approaching an estate agent with a clear view of what you can afford often gives the buyer the upper hand,” says Goslett.
But Goslett warns that the present favourable conditions for buyers will not last forever; interest rates will rise and the demand for property will grow. “Demand drives property prices and those who are considering investing, but are waiting for better days, should seriously consider buying now. We have already seen a rise in sales and although this is not expected to reach the heydays of the property boom just yet, things are certainly looking up for sellers,” concludes Goslett.