Property buyers back in market
AUCTIONEERS say investor sentiment has improved significantly over the past two weeks following the Reserve Banks decision not to hike interest rates, with buyers pouring into residential and commercial property auctions.
Rael Levitt, CEO of The Alliance Group, says trading on the groups auction floors this month throughout the country has seen the strongest investor appetite in more than a year.
And our success rates and bidding activity has literally changed overnight.
He believes the decision not to raise rates has made many investors and property owners breathe a sigh of relief, realising that the country is most likely at the top of the interest rate cycle.
As far as commercial property is concerned, Levitt says they are seeing a definite increase in prices and bidding activity with more registered bidders.
At a multiple auction held by The Alliance Group in Sandton last week, a record 350 people were in attendance.
There is no doubt that trading on our auction floors has been surging, particularly since the neutral stance by the Reserve Bank governor on interest rates.
Jonathan Smiedt, CEO of auction group Claremart, says there has been a marked increase in buying power in commercial and residential property auctions over the past two weeks.
But Smiedt says he predicted this would happen.
We knew as soon as the governor stayed the increase in interest rates, this would show a semblance of governance and would pull the buyers back into the market again.
He also says the group has received more than 100 calls from interested buyers on one property it is selling in Cape Town. That is a clear indication that buyers have come back into the market, says Smiedt.
Property economist Francois Viruly, of Viruly Consulting, says there must be a lot of properties coming on to the market at the moment.
I still think that investors in the residential buy-to-let market are finding it very difficult to make respectable returns in this environment. I am not that quick to say the storm has passed us yet. I think there are still uncertainties, says Viruly.
But he says the decision not to increase interest rates does bode well for the sector.
Viruly says that one of the reasons why there could be more transactions taking place is that sellers are starting to adjust their prices and that buyers and sellers are meeting at these adjusted prices.
Article by: www.businessday.co.za