Prospective buyers often want to know when they should enter the property market. Naturally investors would like to enter the market when properties for sale are relatively inexpensive and sell the property when the market reaches its highest point. Unfortunately getting the timing exactly right is easier said than done. Even experienced investors often buy too hastily, sell too quickly or wait on the bench too long. However, there are some indicators that can help potential buyers to make an informed decision. The recent interest rate cut of 50 basis points signifies that home owners are paying less interest on their home loans than they were two years ago. It is important to note that although there might be some room for another interest rate cut, the cycle of lower interest rates is approaching its end. Economists predict that interest rates might start to increase again in 2012 and investors who are looking at properties for sale now should leave some room in their budget for higher interest payments in future. But what is currently happening in the property market in South Africa? Ooba, one of the leading bond originators in the local market, recently released results for the market which suggest that the residential property market is experiencing a moderation in price increases. The oobarometer price index showed that the average house purchase price increased by 1.4% year-on-year to R832 705 in October. A year ago the price was R820 885. During the first half of 2010 growth was much more robust reaching double digits in some months, albeit off a low base. The marginal growth for October is in line with predictions that economic growth will slow substantially during the remainder of the year. The average purchase price by first time buyers also experienced a small increase in growth, up 0.7% from R597 075 in October 2009. Other figures released by the bond originator illustrates that the average approved bond size decreased 1.2% to R681 213 in October. However, the average deposit increased 13.8% to R151 492 which is about 18% of the average purchase price. According to Saul Geffen, CEO of ooba, the effective approval rate of home loan applications increased a considerable 8% year-on-year in October. This means that more than two thirds of homebuyers are successfully obtaining a home loan from a financial institution. The ratio of applications declined by one lender but approved by another also increased – from 10.6% to 29.2%. This illustrates that prospective home owners should not get despondent when one bank decline to lend them money to buy a home as there is a 30% chance that another financial institution will approve the loan. Do your homework. Where are the best properties for sale located? Which bank will give you the best deal? While the timing of an investment is important it is often not the most significant consideration. Invest in property which offers good value for money in a pleasant suburb where you will easily find tenants and where the prices are likely to increase in future.