BUYER HESITATION IN THE RESIDENTIAL PROPERTY MARKET RESULTS IN EXCELLENT MISSED OPPORTUNITIES
Category News
Those who have made their careers in property and have seen how confidence and prices are affected by political and economic events, are currently witnessing a marked hesitancy phase, says Rowan Alexander, Director of Alexander Swart Property. This is causing some regular property buyers and would-be home owners, to miss out on genuinely good opportunities. He predicts they will regret their lack of optimism in the months ahead.
"I have been in the business long enough to see this pattern occur fairly regularly and those who hold back and wait for an upswing, almost always end up paying considerably more and missing out on the value increases that upturns bring with them. Right now, it is true that rental returns on investment properties are lower than one would expect but prices are also below what many would consider to be their true level - so there is no valid reason for hesitation."
In recent months, Alexander Swart and others, have seen a stronger buyers' market. FNB have indicated that they believe house prices are now stabilising and buyer despondency has declined. This, coupled to the highly advantageous terms and competitive rates that the banks are now offering, has caused some commentators to say that the relatively short-lived drought period in SA residential property, could soon be over. What is undeniable, says Alexander, is sellers who have decided to wait for the market upturn and may have withdrawn their properties from the market resulted in house supply now being down : this WILL undoubtedly help stabilize prices.
Another factor which could raise confidence and prices is the SA Reserve Bank's widely anticipated decision to lower interest rates by 25 base points. If this does come about, as seems highly likely, it will make home loans more affordable and give a psychological boost to those who struggle to meet monthly bond repayments or who may not have qualified for a home loan previously.
Asked to give one good example of an investment that in his view will benefit from any future upturns, Alexander mentioned the newly launched Stonewood Village Homes in a security estate in Cape Town's northern suburbs. Prices are pitched between R1,8 and R2,1 million (for a three-bedroom, two-bathroom home, with a double garage), which is as good an opportunity as he has ever seen. Monthly bond repayments will only begin in 2020 because the project is being sold on a plot-and-plan basis. Alexander says the market appears to appreciate this: seven homes were sold in the first week following the launch.
"Throughout my career I have time and again seen people hold back from buying in times of reduced confidence, only to regret later hat they did not take the plunge. There is always a danger that the public goes into freeze mode and misses out on the very good offers on the market. Now, I believe, is a very good time to buy provided you take care and get sound advice."
Contact Rowan Alexander on 082 581 3116 or email: rowan@asproperty.co.za
Author: Independent Authour
