Timing is the key to property market killing

Auction house boss says strike now for the housing bargain of a lifetime, writes David Pincus

A question doing the rounds, particularly among those who have finance or can raise it, is: does one buy residential property now that prices have fallen so much? They have been declining since the middle of 2008 and dropped 4.2% year-on-year in March, according to mortgage originator ooba, formerly MortgageSA.

It is not an easy decision. Many believe the price of residential property will continue to drop for quite a while, and many others believe the market is close to bottoming.

Rael Levitt of the Alliance Group, which will auction more than 600 properties in April and May, believes the time to buy is now.

He said: “In the last downturn banks couldn’t give away distressed properties. They had to keep them on their books as properties in possession. But unprecedented volumes of houses are now hitting auction floors, and many buyers who have access to financing see the current period as a window of opportunity and are picking up properties at low prices.

“They’re getting high rentals at the moment, which means that while they wait for the market to rise their purchases are turning into great investments.”

But when will the market rise? Levitt believes it may start to bottom late in 2009, “which means there is no better time than now to pick up real estate at lows that haven’t been experienced in South Africa in decades”.

Your trusty calculator may help to provide the answer: if the market turns up in, say, September, it means those who delay purchasing until then will buy for less, but will lose four or five months’ rental.

Levitt will not find estate agents clamouring to join his fan club when he says buying on auction is the way to go.

“You have to look at international trends to see that, in sharp contrast to the snail’s pace of private transactions, property going under the gavel is increasing at an exponential rate,” he says.

But, Levitt concedes, “buying on auction is often misunderstood, and can be daunting”.

From houses to horses: if you are into horse breeding and have been toying with the idea of setting yourself up in the Cape, the ClareMart Auction Group’s sale of the more than 300ha Oaklands Farm near Wellington at midday on Friday should be of interest to you.

It has everything, such as stabling, foaling barns, paddocks, stud facilities, two manager’s houses, as well as river and borehole water.

Phone Andrew Koch on 082-494-9631 to find out how to get to the sale.

Inland dwellers toying with relocating to Jeffreys Bay, or having a holiday home there, could consider the three-bedroom home in Hoepoe Street, Aston Bay, “with lovely views and a self-contained flat with a separate entrance” being auctioned by Colliers International Auctions tomorrow at midday.

It is labelled a bank auction, which may mean it’s a repossessed home, so it may go for a reasonable price.

On Tuesday at 10.30am Park Village Auctions will start disposing of plant and equipment from the liquidated Masingita Mining and Minerals of SA at Jan van der Merwe’s farm, 121km from Last Stop on Brits along the R511.

The equipment includes a dump truck, a front-end loader, a bulldozer, two shovel excavators and a special purpose flammable liquid trailer.

The new car market is taking strain but as prices achieved at auctions show, the used-car market is faring better.

It is bolstered by moneyed folk who buy what they want for less than if they were to buy it new — but not at give-away prices.

Last week Park Village Auctions knocked down a 2007 Lamborghini Gallardo for R2.375-million. That’s more than twice the R1.06-million it got for a four-bedroom (all en-suite) house with four carports, and a face-brick building with nine bedrooms, all en suite, on the same property.

And, as Aucor showed at its used truck sale in Bapsfontein last Tuesday, buyers are prepared to pay for late-model trucks built by reputable manufacturers that havebeen well maintained.

A 2008 Freightliner Argosy CAT C15-515 6x4 Horse went for R770000 and a 2007 model of the same vehicle went for R610000.

Article from: www.thetimes.co.za