Judging by the comments made regarding a recent article published by Private Property, the issue of submitting an offer for a property is a contentious one. Some of those who commented on the piece even suggested that the property market is corrupt or that the article could induce buyers to start making ridiculously-low offers. Others blamed estate agents for the current state of affairs, but strangely enough, very few of those who commented, blamed the current situation on the state of the economy and the negative impact that this has understandably had on the property sector.
Property markets across the world are based on the concept of willing buyer - willing seller, in other words, no one is forcing the seller to sell a property for less or more than it is worth – that is a decision that a seller takes and one that he takes alone. The idea that sinister forces are behind the goings-on is, if truth be told, a little silly as property like every other market has its ups and downs and like it or not, we are currently in a down period.
During property booms, buyers drive the market, thus fuelling the demand associated with an upturn. An increase in demand increases property prices and there have been many instances where buyers have paid far too much for a property during these times. During downturns buyers continue to have a heavy influence on market conditions, albeit in a different way and unfortunately for sellers during times such as these, buyers tend to hold all the cards and are generally quick to take advantage of the tight market conditions.
It is in times like these when savvy investors stand to make the most money, by investing in property that others can no longer afford. While there may be those who abhor the fact that there are those out there who are literally taking advantage of another’s misfortune, this is a fact of life. Over the years millions of rands have been made by ordinary South Africans who, recognising the opportunities that an economic downturn bring, have invested as much of their hard earned money as possible. Those in the know understand that now is the time to invest. Buying property when very few others are able to do so is going to make the investor substantially wealthier whereas investing when prices are at a peak, while still a good investment, is not going to show the same returns.
Perhaps the saddest part of the current situation is the length of time it is taking the average South African to get back on their feet. Most of us have lived through economic downturns before, but this particular crisis seems to be dragging on. This is, of course, due to the severity of the economic crash which literally bought the American and European housing markets to its knees. South Africa emerged relatively unscathed from the fray and although many have had their homes repossessed, the numbers of casualties were far lower than in other countries. Things of course are going to improve: they always do. What goes up must come down. The good news, however, is that the reverse also applies and although the current situation may feel like it will never end, the property market will eventually recover and sellers will once again be able to demand and get the higher prices that they believe they deserve.