PROPERTY NEWS - It is a great time to buy property, especially in areas where the market and prices have been flat, and given that we have just had the third successive interest rate cut, says Samuel Seeff, chairperson of the Seeff Property Group.
While more interest rate cuts could potentially follow, agents say that buyers should not wait too long.
The market is already picking up steam and once sales volumes start moving meaningfully, price increases may inevitably follow.
Seeff says the interest rate cuts have brought more relief to consumers and potential property buyers, reducing debt repayments and freeing up more disposable income to pay for their own homes.
Lower interest rates reduce the cost of borrowing money for a mortgage which means monthly payments will be lower compared to a year ago. This makes homeownership more affordable and allowing buyers to potentially borrow more.
Additionally, outside of the Western Cape, property prices have not grown much over the last two years, especially in Gauteng and other inland provinces, says Seeff. That means you can find a property more or less for the same price that it was two years ago.
On top of this, due to the slower sales market, there are high stock levels in many areas. This makes it easier for buyers to find properties for sale, and also to perhaps negotiate a better price, depending on the property and area.
The ideal is always to buy low. The benefit of buying property at the bottom of the property cycle, is that you find it for a good price, and then once the market takes an upswing, you can benefit from the property value growth which comes with higher demand and more buyer competition which then pushes up property price and values.
The upside for sellers is that more demand means that their properties can finally start selling. Once the market picks up more impetus and stock levels start depleting, buyer competition may then drive higher prices and property values.
Lower interest rates also make real estate a more attractive investment compared to other options. The combination of lower borrowing costs and potential appreciation can lead to higher returns on your investment.
Seeff also recommends that prospective buyers ensure they are able to move quickly once they find a suitable property. It is important to budget correctly, and for buyers to do proper research and preparation to ensure they know what they can afford.
A vital first step is to get a formal prequalification done for a home loan.
That way, prospective buyers know what they can afford, and they can commence their house hunting with confidence. It also helps with negotiations with the seller, and the buyer may even secure a slightly better price.
Article: Caxton publication, The Citizen
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