There has never been a better time to buy than now, says Also's executive sales manager
The recent 0,5% drop in the interest rates will almost certainly be followed by further drops giving a total reduction of 2,5 to 3% by the third quarter of next year, says Johannes Barnard, Executive Sales Manager for ASLO Holdings.
In these circumstances, said Barnard, all the advice which we have given in recent weeks to buy now becomes more relevant. Although a full-scale recovery is not on the cards yet, price falls set to end and property values, in my view, will begin to appreciate from April onwards. ASLOs message to the public, therefore, is, do not miss the boat.
As sellers see prices improving they will be tempted to hold back their properties until the market reaches a new peak. The astute buyers will get in now to obtain real value because, in the areas served by ASLO, prices are on average 15% down on their peak 2007 levels.
Barnard has on several occasions said that the current very negative perception of residential propertys prospects is without any logical foundation. Property, he believes, should be an integral part of any balanced portfolio because it has a proven ability to withstand fluctuations better than other asset classes and to give satisfactory returns in the medium to long term.
As more than one ASLO director has pointed out, said Barnard, SAs situation differs from that of the USA and Europe in that, although we are affected by their economic woes, we did not get ourselves mired in debt, as they did.
The sound economic policies and the continuous commitment by government to improve infrastructure and living standards puts us in a better position than other countries, he said.
This means that the SA housing market must remain a good asset class for the future.
Barnard added that those who already own property are in a strong position because the prices of new developments or, indeed, of any sort of new building, have been pushed up by sharply increased construction costs.
This, he said, that for the first time in a long while, existing housing is inexpensive in comparison to new buildings. Many developers, he added, have been forced to curtail their activities and this will soon result in a shortage of new homes to buy or to rent which, again, will push up prices.
Barnard pointed out that the recent high interest costs are nowhere near as high as the peaks reached in 200/2001 from which the market swung back with renewed optimism and life.
It has to be accepted that these rises and falls are cyclical and necessary, he said. A correction was overdue but, as I have indicated, the clever thing to do would be to buy now before interest rate falls make a full recovery inevitable.
In ASLOs portfolio, said Barnard, several projects, many launched in pre-boom days, represent good buys right now, especially The Crystal at Camps Bay (priced from R3 million to R7,5 million, Topaz at the Strand (priced from R4,1 million to R6,5 million), LAvenue at Franschhoek (priced at R8,5 million).
Article by: www.era.co.za