subject: Property Sales- It's A Buyer's Market [print this page] Everybody needs somewhere to live, but the South African real estate market can be a tough place. Unless you are truly willing to fight for the property you want (and even then you may need offer a higher price or be able to give a large cash deposit upfront), you can end up looking for a place to stay for months, or compromise and stay somewhere that wasn't quite what you had in mind. However, the fluctuating property market has been in the doldrums of late, which is good news for those people looking to purchase property.
With property developments springing up all over the country, and numerous properties for sale being advertised weekly, it seems that there should be a place for everyone to stay. Property prices escalated radically in the last few years and then the market came to a virtual standstill. Although it is still experiencing a lull, now may be a good time for investors to purchase residential property off plan - provided they have the means, of course. This means that you purchase what is essentially a hole in the ground and then start laying foundations and building the property. While this can be incredibly daunting, the benefits are that you purchase at either current prices or below current market value and then once you have finished building in a year or so, capital appreciation results in it being worth far more.
While higher interest rates have resulted in a decrease in demand for new developments, this implies that there will be an imminent shortage in residential properties, and that the value thereof will increase in the next 12 to 18 months. Because it takes 12 to 18 months for an investor to take ownership of an off plan unit, he will only start making bond repayments at that time. There are also no transfer duties involved when buying off plan. So long as an investor can secure a deposit and get bond approval at the current high interest rates, by the time he takes ownership of the unit interests rates will have decreased, property rental prices will have increased, as will property values.
For lucky buyers who find an investor and contractors they can trust, this is one way of developing their dream home. With the property market in its current ambivalent state, buyers are the ones holding the reigns. There are plenty of properties for sale, both new developments and existing residential properties, and if the seller or investor does not accept the buyer's offer, the buyer has plenty of other places to look. Those individuals looking for upgrades can also benefit from this market as a result of the lower property prices.
You may be asking why there are so many properties for sale and so many going on auction. This, sadly, is a result of high inflation rates. Some consumers tend to live their lives on credit and when inflation rates increase they cannot afford the monthly paybacks. In order to make these paybacks, the consumer needs to make a lot of money in a short space of time. Selling off liquid assets (such as houses, cars and boats) can be a quick way to get cash in order to make these payments and avoid bad debt and becoming blacklisted. This is one of the reasons that there are so many residential properties for sale.
So if you are an investor interested in property developments or if you are a buyer looking for residential property, keep an eye on the real estate market and you'll soon find your next big investment.
by: Gen Wright
welcome to Insurances.net (https://www.insurances.net)
