Sanity Will Prevail

Private Property South Africa
Lea Jacobs

In years gone by knowing when to invest in property was a fairly easy exercise. You left school, got a job, got married and then bought a home. Modern times and economic conditions have changed this picture somewhat and many have become frustrated because they are either unable to afford what they really want or have been denied the right because of the strict lending policies SA currently has in place.Left out in the cold, a number of those who would have automatically invested in property before are deciding that instead of laying out huge amounts of cash for deposits and other expenses they are choosing to rent the property of their dreams. Interestingly, upmarket homes in highly-regarded suburbs are among the most popular choices. Unwilling to sacrifice their standards of living, a younger affluent sector are living the high-life long before they can afford the ownership of a property of this calibre.It appears that slumming it for a few years is not an option for this group. In a world where image is everything, driving the right type of car around the right suburb and pulling into the right driveway is a must. Logic, it seems plays no role.Although psychologists may be able to explain this phenomenon the overall trend makes no sense. Paying an exorbitant long-term rental on a property that the tenant is never going to own seems slightly insane. However, there may be a method in their madness because in the short term, at least, they are getting the best out of life, but only paying a fraction of the costs associated with the privilege. The average South African’s rates bill has soared in recent years as has the costs of maintaining a home. The individuals who have turned their backs on these responsibilities could just be on to something. Living for the moment as you can afford it may have its advantages; however, there is simply no way to get around it - these renters are going to lose in the long run.Property ownership has always been a profitable exercise, but it is not one that should be taken lightly. Knowing how and when to invest is key and making the right decision early in life can lead to greater things later on. Unfortunately, you get the impression that the recent economic crisis has altered the mind-set of some buyers, particularly those who are entering the market for the first time and many have become fearful of the consequences of property ownership. This is hardly surprising given what has happened in local markets. In some areas prices have fallen to record lows. The property boom saw prices rising at a phenomenal rate only to fall as dramatically when the world wide crisis hit local markets. Our over-indebted home owners quickly became victims and large numbers of people lost what had taken them years to accrue – their homes. The good news is that the property buyers will always be resilient and although there may not seem to be much light at the end of the tunnel, it is still there, steadily getting brighter.

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