Now is very definitely the right time to buy
Now is very definitely the right time to buy South African residential property, SAYS RAWSON MD.
This no holds barred, totally straightforward message was put out this week by Tony Clarke, MD of Rawson Properties.
"I have," Clarke said, "become tired of the gloom and doom merchants whose advice is now to hold back and wait and see. To me it is crystal clear that if their advice is followed it will result in many missing the boat."
What he finds especially frustrating, said Clarke, is that the purveyors of negative messages regarding property prospects are so often from the financial services world who are now trying, once again, to flog shares and financial packages, this time on the grounds that these are now greatly discounted.
"How can we ever again have faith in their perceptions of the market when we recall how few of them foresaw or warned their clients about the impending crisis which has now overtaken the First World's economies?" asked Clarke.
Always, said Clarke, the tendency among property buyers is to wait until the market is performing well before climbing in - but that delay time and again has resulted in their losing the best deals (and paying 20% to 40% more than they could have done) by buying when the cycle is already moving up.
Remember the age old adage "Buy low, sell high.
"As on the stock market," said Clarke, "the right time to buy, in my view, is when others are selling fast, because that is when you will catch the economic cycle at its lowest point. Warren Buffet has taught us to buy when everyone else is running scared, and to be scared when everyone else is buying. That advice applies just as much to property as to stocks.
This, he said, is very well understood by the shrewder property investors, who are right now contacting Rawson Properties to buy and are doing so steadily.
Virtually all the property professionals with whom we do business agree that the property market is now either already on an upswing or is close to bottoming out. No-one expects further serious falls in home values, said Clarke.
"Let us admit at this point that none of us really know when a cycle is turning, nor when the bottom has been reached - but let's also have a good look at the signs and evidence available.
"Right now sales in our group are increasing month-by-month.
Furthermore, Rawson Finance, which helps buyers to access mortgage bonds, was 22% up on its monthly turnover in September and is already showing a very respectable profit after only six months in operation."
Asked which price categories in his view will offer the best buying prospects, Clarke said that the biggest discounts had been experienced in the R1,8 million plus category and therefore in time this is where buyers can expect the biggest recoveries. However, he added, for quick action it would probably be wisest to look to the R900,000 to R1,7 million bracket, where, it would appear, housing is set to perform exceptionally well over the next year.
Repeating his call for confidence, Clarke said that the time has come to show a little more respect for the opinions of those who have made a comfortable living in investing in property, like his own chairman, Bill Rawson, who is taking a very optimistic view of the future.
The people I listen to most closely are the property gurus who invest in properties for a living, he said. These investors made unbelievable purchases in 1998/99 when the doomsayers were regurgitating the same message they are now.
Those putting out an optimistic view are doing so, not in an attempt to talk up the market, but simply because that is the situation as they see it and I, for one, would feel far more inclined to follow their advice than to be deterred by the negative views of some 'experts' and economists, many of whom are not at the coalface of the residential property industry.
Article by: www.rawson.co.za