Sellers are finding it more difficult to sell their houses in the current economic climate and it might not get any better for the first half of 2009. According to ABSA price growth will be negative the first half of the year, even if the interest rate comes down, because markets recover gradually.
There does seem to be a more positive outlook for some areas and price bands. According to Pam Golding Properties real estate below R 800 000 in Johannesburg east, Soweto, Pretoria and Midrand is expected to do well. The reason I think these properties will do better than others is because of the market they are aimed at. Even though prices are dropping and interest rates are high, there has to be first-time-buyers out there that can now afford to get their hands on real estate, maybe I am wrong. The other scenario could be that now that people are not buying property they need to rent. If you have investment properties in these areas you probably are making good rental income, this scenario is probably more likely than the first, what do you think?
The biggest problem for sellers in the current market is that they will not get their price, in fact, they will probably lose money. If you are thinking of selling your property maybe you should wait until the economic conditions improve, I know this isn’t always as easy as it sounds, but I still say try everything you can before selling.
Now if you are a buyer than take your time and do your research. If you buy right in the current market you will make a killing when the market turns. Don’t go on a spending spree and try to buy every property you can find but check what the historical trends are of the area you want to buy in. A little work now can save you lots of money later.
ABSA expects inflation and the interest rate to fall in 2009, this will definitely have a positive effect on the property market in 2010. So, if you can get into the market now do it.
Well let’s wait and see what happens this year, I like to think positive, what do you think?
I am very positive about 2009, because things can only get better from here for the property market.
But they say the property market is like a big ship. It takes time to turn. I will not wait for the property market to turn. You need to get in this market before the herd.
And if you get a property for 20% below market value (and there are many out there), you don’t have to worry if the market goes down another 5%-10%. By the time the market recovers you will not see many 20% discounts.