PROPERTY: Buy Signals Now Unequivocal
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It’s time to officially call an end to the recession – at least in the real estate sector.
So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that the company’s “strike rate” of properties sold as a percentage of those advertised has been back up to 20% for the past three months.
“This means that one in five properties we advertise each week is being sold, compared to just one in 12 late last year, before interest rates started to fall, and one in seven earlier this year.
“And considering that the weekly strike rate was two or three in five at the very height of the last boom, I think we can safely say now that the market is well on its way to recovery.”
For home sellers, he says, this does not mean that prices are immediately going to bounce upwards, “but it does mean that well-priced properties are going to start selling much more quickly and easily, because demand is on the increase once more. In fact, the average listing time has already fallen back to 90 days compared to 120 days or more last year.
“The most important factors that come into play here are lower interest rates which mean that prospective buyers have more disposable income, and easier access to home finance now that the banks have somewhat relaxed their credit restrictions.”
The issue here is that buyers must be careful when re-entering the market, as real estate companies are going to be looking to take advantage of the increased interest. Don't let them rush you into any decisions, with claims that, "You have to buy now because all the good value properties will be gone soon."
The truth is a lot of people are still feeling the effects of the recession. Yes people have more disposable income with lower interest rates, yes the recession looks like it is ending, but it is definitely not over, and with electricity and petrol costs looking to sky rocket, it would be wise to think long and hard before committing to another property.
That being said, there are some very good deals to be found in property at the moment, and good investments are notoriously hard to find.
Business News Sector Tags: Property|