The current buzz words floating around are "buyers market" but what does this mean for someone wanting to get onto the property ladder.
In a nutshell, a buyers’ market is the perfect scenario for anyone wanting to enter the property market at favourable interest rates and generous loan options on superbly priced properties. In an environment that offers daily news headlines that lean on uncertainty, first time homeowners or investors could not be more certain about investing in the property market.
“The South African property market has been described as a ‘buyers’ market’ which refers to the interaction between the supply and demand of a particular type of property where the properties are plentiful and the buyers are few,” says Bryan Biehler, Director and co-owner of Huizemark. “This environment results in lower offers from potential buyers and increased competition in the marketplace,” he says.
This scenario is particularly positive for buyers looking to purchase homes below R1.5 million, and with the recent interest rate decrease and further deductions anticipated, more people are qualifying for bonds which is stimulating the market. According to an article released on Private Property, over 50% of all new home loan applications are first time buyers and ooba home loans cites that banks are approving 100% loans with zero deposits in an attempt to boost the property market. “66% of our sales over the last 12 months were to people qualifying for 100% bonds and 58% of all sales were for properties priced at less than R1.5 million,” says Bryan.
Bryan anticipates that the market will stay relatively stable in its current position with a possibility of a slightly improved number of transactions, but suspects that the downward pressure on prices will continue as the supply continues to increase. “Prices will continue stabilising in areas where buyers are king. Buyers are more informed due to technology and do a lot of research before buying so properties tend to stay on the market for longer.”
“Over the last year, the Huizemark network has seen security estates out-sell freehold properties; increased sales in retirement village developments; luxury free-standing homes in affluent areas in high demand and traditional freehold homes surrendering to a lock-up-and-go lifestyle,” observes Bryan.
“The lower end of the market is incredibly vibrant which will translate into higher priced property that the industry will need to move as people upscale in the future,” Bryan concludes. This sentiment is also echoed by Paul de Kock, Analytics Director at property data analyses specialists, Lightstone says “Although the current economic status quo does not bode well for the health of the property market, the positive news in the current economic climate is if you are looking to purchase a home, it’s a great time to do some bargain hunting.”