Lanice Steward sees 1st signs of optimism returning to residential property market
Another high profile figure in the Cape residential property market, Lanice Steward, MD of Anne Porter Properties, says that there are now clear signs of renewed optimism in this market.
This, said Steward, appears to be based on a slight easing up in the economic situation as a result of the lowering of food and petrol prices and a belief that interest rates will come down throughout 2009. It is also, she said, based on a better understanding of, and a new readiness to accept, the limitations imposed by the National Credit Act.
From November onwards last year, said Steward, we saw a firming up of prices. Two homes that we sold in 2007 have recently been resold for almost exactly the same prices - indicating that values have now bottomed out. This trend, I think, will continue throughout 2009.
Another good sign for property marketers, said Steward, is that certain people who in recent years have favoured the stock market rather than property are once again making property a significant part of their portfolios - and this includes residential property.
It is, of course, accepted that rentals are seldom sufficient to cover bond repayments, at least in the first three to five years, but many of our clients now believe that capital growth, including that on the higher priced properties, will compensate adequately for any shortfall on the bond payments.
It is always debatable, said Steward, whether investors should buy three or four lower price bracket units or one expensive home: the rents on the lower priced units will be proportionately higher in relation to the initial cost but the capital gain on more expensive units is likely to be more impressive than that of the lower priced units.
Steward said that those planning to invest in property should team up with an estate agent who really knows the business.
Until quite recently, she said, we found that the advice of financial consultants was accepted, even by experienced professionals and leading businessmen, whereas advice from an estate agent would be queried and doubted. Anyone looking at the track record of Anne Porter Knight Frank and certain other agencies will see that our advice has been consistently good which is more than one can say for some of the advice given by expert financial advisors. Let us hope that this year our advice is taken more seriously and that the I know better attitude of some property sellers, which has all too often led to unrealistically high prices, delays in selling and long drawn-out stalemate situations, is now less prevalent.
Steward added that it is always essential to check the track record of any agent employed and to question the data on which he or she bases the valuation. However, she added, with regular training now provided by almost all the big brand agencies, those agencies still in the industry usually understand the market exceptionally well and are particularly good at setting realistic selling prices.
For further information contact Lanice Steward on 021 671 9120 or 083 648 6655.
Article by: www.anneporter.co.za