Cape survey shows its time to buy
Almost 50% of homebuyers and sellers in the Western Cape believe property values will fall by at least 3% this year, and one in 15 is so gloomy that they think the decline will be greater than 12%.
These are some of the findings of a poll conducted among more than 1000 clients of the Chas Everitt International franchises in the Western Cape during December and January.
The informal survey also revealed that about 28% of consumers believe property values will stay about the same this year and that just under 25% believe prices will show an increase of 3% or more.
In other words, says Chas Everitt International MD Berry Everitt, three-quarters of those polled believe that prices are either going to stagnate or fall by some measure this year, so it certainly looks as though this is going to be the year to buy property in the Western Cape.
The findings are in line with the most recent bank statistics, with the latest housing reports from Absa, FNB and Standard all showing that property prices have been in a decline in real (after inflation) terms since the third quarter of last year.
And while the mood of the market is likely to lift following the interest rate decreases that are expected in the next few months, we do not foresee prices starting to move upwards until the second half of the year at the earliest, as there is still a substantial oversupply of properties for sale that needs to be absorbed, Everitt says.
The credit crunch that is making it more difficult for potential buyers to obtain finance will also keep a firm lid on prices, with the message to sellers being not to raise their expectations just because interest rates fall. It is going to take between six and nine months for these concessions and the drop in inflation to work their way through to the housing market.
On the other hand, he says, buyers should do their utmost to acquire property now at what is surely the bottom of a cycle. They should not delay in the hope that prices generally to will fall much further, as there has already been a noticeable increase in sales activity.
In property, one has to think medium- to long-term and we are confident that those who buy now will show the greatest returns in three to five years time.
Article from: www.chaseveritt.com