THE OUTLOOK FOR SA RESIDENTIAL PROPERTY PROVIDED INTEREST RATES DO NOT RISE on 2008-09-26"EN-GB" xml:lang="EN-GB">THE OUTLOOK FOR SA RESIDENTIAL PROPERTY PROVIDED INTEREST RATES DO NOT RISE on 2008-09-26" />
THE OUTLOOK FOR SA RESIDENTIAL PROPERTY PROVIDED INTEREST RATES DO NOT RISE
A recovery could occur by December, says Steward.
Lanice Steward, MD of the Claremont based agency, Anne Porter Knight Frank, has already said in a public release that there is surprising resilience in the SA residential property market, that sellers are showing a greater sense of realism and are coming round to accepting the 15 to 20% price falls of the last year.
Asked recently when, if ever, an upturn in home sales could become evident, Steward said that, despite the economic fallout worldwide (“the worst since 1929”) and Mboweni’s warning that a credit crunch now seems inevitable, property marketers are still hopeful that there will be no further interest rate rises.
“If that is the case,” she said, “the market could turn upwards before the end of this year. Although the freefall in the world’s stock markets is serious, SA is to an extent protected from it because our credit restrictions, although imposed late, have been effective and, due to the foreign exchange controls (so often seen as a handicap), our banks were not involved by and large in sub-prime lending. Furthermore, our state finance portfolio was farseeing enough to build up reserves in the boom years, making it possible now to tackle 15 years worth of infrastructural development in five.
The impact of the 2010 soccer event, although overplayed in some quarters, will focus interest on SA and will channel a small percentage of (some say 2%) of international property investment in our direction.
“The estimated 350 000 plus visitors at this time is just what we need,” said Steward. “We have already experienced several new enquiries from the USA, a country in which we have had traditionally few clients.”
Advice from a property expert: get into the market now even if you have to make substantial sacrifices
Another high profile figure in the Cape residential property sector – Lanice Steward, MD of Anne Porter Knight Frank – has urged Capetonians, particularly those who are young and, as yet, undecided about property ownership, to knuckle down, make the necessary sacrifices and get onto the property owning ladder now.
“In our business,” said Steward, “we come across young, upwardly mobile people who tell us that they prefer to rent at discount rates in a good area rather than compromise with a less attractive home in a not-so-fashionable suburb.
“This philosophy, in my view, is short-sighted. It is adopted, in most cases, by yuppies who earn good salaries, drive expensive cars and believe they have what it takes to “make it” in today’s commercial world – but the day will come when they rue their decision. They will find themselves without a home of their own and condemned to annual rent increases in perpetuity.”
Those who skimp and save to get together a deposit, buy a home and then work on it will find that every five to seven years they can upgrade at very little extra cost, said Steward.
“We have clients living in Rondebosch or Constantia who ten years ago bought their first flat in Mowbray or Wynberg – and who are still paying roughly the same amount on their bonds because the profit on their sales enabled them to upgrade without greatly increased expenditure.”
Asked if this would apply even in today’s market, Steward said that prices are now “wonderfully low” – but will increase within the next two to four years.
“The current downswing will end – probably within a year. Those who bought now will be grateful they did so. It has to be remembered that, unlike most other forms of investment, a homeowner is making his profit on the bank’s money. This means that the potential for increasing his asset is often greater than in a conventional investment where the full sum has to be paid upfront and the risk is often higher.”
For further information contact Lanice Steward on 021 671 9120 or email firstname.lastname@example.org
Article from: www.anneporter.co.za