The turn of the decade presents some interesting opportunities within the South African housing market.
As it stands, house price growth is slow and economic threats are plenty. Yet, after reviewing internal sales figures for 2019 and other industry reports, Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, believes that the 2020 real estate market will hold as many opportunities as it holds challenges.
“The weight of these challenges will be shouldered mostly by sellers as we continue to experience a buyer’s market where supply outweighs demand. The opportunity for sellers lies in when they choose to list their home. If, for example, they choose to list shortly after the announcement that interest rates have dropped to 9.75% (prime), they could capitalise on the potential uptake in buyers who are incentivised to take on home loans while interest rates are low,” Goslett recommends.
Buyers too might enjoy the opportunity of securing a good rate on their home loan if they apply now while interest rates are low. Alternatively, Goslett suggests that buyers take this time to improve their credit record by using the money they save on interest charges to lower their debts.
Beyond this, buyers are encouraged to capitalise on the fact that house price growth has been slow. “Buyers should purchase now before house prices begin to grow at more unaffordable rates – which I believe will happen once the market corrects itself,” says Goslett.
As much as the current market favours buyers, Goslett suggests that certain realities could also be used to the advantage of sellers. “For example, by installing eco-friendly alternative energy sources to their home, sellers can choose to turn the ongoing crisis around our national power supply into an opportunity to add value to their home.”
In terms of the challenges that sellers might face, Goslett warns that larger homes are taking considerably longer to sell than in the past. “I believe the luxury market will continue to feel the pinch within this tight economy and the majority of transactions will continue to fall within the affordable price ranges. Sellers within this price bracket are therefore advised to partner with an experienced real estate professional backed by a brand with a strong local and international presence so that the probability of their selling at full value will improve.”
Similarly, buyers will continue to feel the pressure of the struggling economy which could hurt their chances of qualifying for a home loan and securing the necessary funds to purchase a home. “I would recommend that buyers get in touch with a bond origination company, such as BetterBond, to receive pre-approval for their home finance and increase their chances of securing the home of their dreams,” Goslett concludes.