Current Cape residential property market is playing into the hands of the bargain hunters, says StartProp Chairman
If you have spare cash or are one of those relatively few people who still has access to bond finance, the Cape rent-to-buy market is now offering bargains that, it can confidently be predicted, will not be repeated for years to come.
This was said recently by Ivan Neethling, CEO of Startprop, the independent estate agency that focuses on homes in the lower middle and lower bracket areas.
A sale which illustrates Neethlings statement took place recently in Hazendal, Athlone.
The owner of the property had secured a bond over the property for R950 000. Since the crash in the economy, the owner had been forced to sell but had been unable to get offers anywhere near the original price paid.
Eventually, realising that the clients predicament was becoming worse, Startprop recommended that he accept an offer of R650 000 and, to their surprise, the bank, anxious to avoid a repossession, accepted this offer as the property would probably have secured only far lower offers on a forced sale.
Obviously, said Neethling, this is not a happy story but it does illustrate what absolute bargains todays buyers can get in this case a drop of R300 000.
At the rates currently being paid for second hand property in Southfield and Athlone, said Neethling, it is quite possible for buyers now to get a substantial return from day one and at the Athlone home the bank has almost certainly come out of the deal better than if they had repossessed the home and sold it on auction.
Neethling said that recently several prospective sellers have come to Startprop in desperate straits and prepared to accept massive drops in their homes value. In many cases, sellers are prepared to entertain offers which merely cover their outstanding bond amounts or even less. Startprop agents are, said Neethling, in contact with buyers who have already prequalified for a bond of the required amount.
We should, however, said Neethling, warn prospective buyers going for the big kill that these favourable bargaining conditions will not last forever. As I have said elsewhere, the turnaround in the housing market will, we believe, be evident by the year end so if you are bargain hunting you have only limited time.
Article by: www.startprop.co.za