PROPERTY: Best BuyersÂ’ Market in Decades
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On the back of renewed global economic uncertainty, both demand and property prices came under pressure last year as buyers and especially investors took a cautious approach. This says Seeff has led into one of the most favourable buyersÂ’ markets. With interest rates at a 31-year low, mortgages are now more affordable than ever. Property prices are at the lowest levels in years and buyers are unlikely to get a better deal than what is on offer in the market right now, adds Seeff. Given that properties are now taking on average between four and six months to sell, motivated sellers are quite willing to negotiate and buyers have a real opportunity to buy smart.
Property Market Still a Strong Option
While home ownership is not just about the investment potential, it is still a comparably safe way of investing money and, Seeff says that if you hold on to it long enough, history has shown that it will generally appreciate in value over time. While other asset classes such as the stock market can yield high returns, it also carries a high risk of potential loss of capital. Property on the other hand offers relative stability with the underlying potential of capital growth, he adds. For this reason, many investors tend to balance their investment portfolios by including property.
Historically, house prices have escalated around 15 to 20 percent per annum between 2000 and 2007. According to the ABSA House Price Index, this peaked in 2004 at an average of 32.2 percent. In the two years leading up to the global housing market crisis of 2007, average house prices rose by 14.95 percent. Following the crisis, there has naturally been a significant adjustment with average prices now at levels last seen about four years ago according to Seeff.
Sellers Told To Be Patient in Current Property Market
On the flip side, Seeff says that those looking to sell this year will need to price conservatively and those not in a hurry to sell are best advised to wait at least a year to eighteen months. Of course, Seeff says there are always exceptions to the rule as buying a primary home especially is an emotional decision and buyers are still prepared to pay a premium in some of the primary housing markets in the major metropolitan areas.
Seeff recommends that prospective buyers do their homework and work with a credible real estate agent in the property market to ensure they make a good investment.
Business News Sector Tags: Property|