19 Feb 2013
So says Pam Golding Properties CE Dr Andrew Golding, who notes that general market sentiment at the start of 2013 has improved, and that there is an air of increased confidence in the residential property market ? which in turn is generating increasing enquiries from mainly serious buyers.
?While consumers remain faced with cost pressures, the sustained low interest rates are certainly a factor assisting both buyers and sellers adjust to the ?new normal? trading conditions in the property marketplace. As a result we are seeing a regularising in the marketplace, with more and more sellers being those who are doing so for reasons other than financial constraints ? in other words normal movement or activity. In regard to buyers, those with cash or high equity are seeking and still in a favourable position to take up good buying opportunities which are available in a variety of locations and offer sound investment potential over the medium to longer term. ?Encouragingly we are also seeing more and more first-time buyers enter the marketplace, while developers continue to demonstrate growing confidence in launching new developments to cater for a pent-up demand for new units in good locations and at market-related prices. There also appear to be indications of increased interest from buy-to-let investors, and looking further afield we are also seeing rising interest from buyers from Africa and other international markets.? Seeff chairman Samuel Seeff also says the rates decision is welcome news for home owners and prospective buyers. ?While the slower economic growth and upward inflationary pressure of the second half of 2012 will no doubt impact demand, indications are that sentiment within the market remains positive and that there is a greater willingness to buy than three years ago. ?Trading volumes are still somewhat short of what we would consider normal but with house prices set to remain flat this year, the low interest rate means that we are amidst the best buyers? market in more than three decades. Certainly, those who are able to buy right now should do so. Even a 1% to 2% interest rate hike would still make mortgages more affordable than five years ago, but this will not remain the case for too much longer.? ?Homeowners do however need to be mindful of utility price hikes, with electricity prices likely to rise well above inflation over the next two years. Transport costs are also likely to continue climbing this year while basic food prices will also see upward pressure. Prospective buyers are therefore urged to take a conservative outlook and focus on bringing down their debt levels and preferably buy below their means.
?Having said that, however, there are plenty of good buys in the market and buyers are certainly able to find good value. And despite the tight home loan lending criteria, the banks are willing to lend when makes financial sense, the buyer has a good credit record and is able to invest a deposit.?
Adrian Goslett, CEO of RE/MAX of Southern Africa, says the rates announcement will be met with relief by consumers who are likely to be recovering from their festive season spending, and that it is likely that mortgage interest rates will remain within the current range of 8,5% ? 9,5% for the next 12 months. ?The real estate market continued to show improvement throughout last year in terms of both sales volumes and property prices and while lending criteria remained stringent, 2012 was a solid year for real estate across the country. Although some of the same issues that were experienced during 2012 such as high debt-to-income ratios, rising cost of living and a poor savings culture will continue during 2013, pushing demand in the rental market, aspects such as the steady interest rate will bring about opportunity in the housing sector.
?House prices will continue to see a measured increase during 2013, especially in the high demand areas and price brackets. Even so, potential buyers who are creditworthy and have access to finance will be able to find property investment options that meet both their criteria and their pocket.?