I found interesting information regarding the South African property buyer’s profile. Apparently for the last years young, wealthy executives, most from the financial sector – investment bankers, hedge fund and unit trust CEOs and financial counsellors were the ones buying up all the real estate and causing the prices to escalate.
Now that we are in a global economic crisis it seems that these buyers are disappearing. This is causing the real estate market to normalise to a more stable environment, which is good. A market that has stable growth will be much safer to invest in.
There is how-ever a catch. Even though we are seeing really affordable prices for real estate we will probably never see these prices again. I have noticed already that in this “Dooms Day World” we are living in at the moment where every second person shouts: “The end is here!!!” some areas property values are still going up.
If you are ever going to get in to the real estate market start planning now, get rid of unnecessary debt, make sure you can pay the bond and get in to real estate.
We love to hear your opinion so please comment and give us your view.
Still lots of pressure to come on the SA property sector methinks. Vacancies in the commercial sector on the up and still think we have another 6 months of pain in terms of residential pricing pressure
Thx for the comment Property Strategist. In the current economic environment the next 6 months will definitely be interesting.
The ‘investment bankers, hedge fund and unit trust CEOs and financial counsellors’ bought because they were making access cash on the JSE. The where still buying from 2004 -2007. The real great property investors (like Hannes Dreyer) stopped buying in 2004 when prices were going ballistic and the herd effect took over.
The property investors are back and buying, but not at market price. They are buying at 20-50% below market value. Because they are buying below market value this will delay the recovery, but they will not complaining. It will only mean more bargains for them.