At Louise Reyneke Properties we strive to provide our clients with our best possible advice and information to make buying property a joyful experience.
A question on many property owners minds recently have now been raised in the latest Entrepreneur Magazine (www.entrepreneurmag.co.za) where the question was asked:
(Is property the best way to invest?)
And the following Answer / Solution was given:
“It has been long proven that the foundation of wealth invariably starts with the ownership of property. If you can afford it, then it is preferable to purchase residential property as this has proven to be a sound medium to long-term investment.
Because of the challenges presented by the National Credit Act, and a CPIX inflation that hovers above the 6% mark, The South African property market is presently a buyer's market. Due to the prevailing economic factors, the supply of property is greater than the demand. This means that you are likely to find yourself in a position to drive really good bargains”
Two recent bank reports confirm this statement.
1. The latest ABSA Home Loans report of 3 May 2011 states:
Despite the lowest current domestic interest rates in more than 35 years, the housing market is going through relatively tough conditions.
This is mainly driven by the following factors that impact negatively on many consumers whose ability to afford housing and qualify for mortgage finance is impaired:
2. The current FNB Property Barometer of 2 May 2011 provides insight into the residential property market in South Africa via their quarterly survey of Estate Agents and shows that
While the current talk is about
a year – on – year house price shift in real terms (therefore when adjusted to consumer price inflation) continues to decline to the tune of -2.8%.
All these factors impact negatively on the average buyer’s ability to secure a substantial bond.
However, qualified buyers are in the pound seats as this is an opportunity for those who are able to, to secure excellent properties.
A word of caution, timing is the key. No one knows when the market will start to bottom out. Do not wait until house prices start to rise again as this can happen overnight.