Leading agents say first-time property purchasers should act now to take advantage of a buyers’ market
While some property experts have expressed disappointment over the Monetary Policy Committee’s decision to not reduce the repo rate, they are still optimistic about a turnaround in the property market.
They also acknowledge that keeping the rate stable at 6.75% and, therefore, leaving the mortgage rate at 10.25%, is still good news for buyers and sellers.
There are encouraging signs that the market is starting to show promise, and this augurs well for an uptick in activity, says Andrew Golding, chief executive of the Pam Golding Property group.
The group’s April property index shows the slowdown in national house prices appears to be bottoming out, with national house-price inflation steady at 3.7% in both March and April.
“We believe the stabilisation and potential for a turnaround in the national market is being driven by a combination of a gradual strengthening in Gauteng and a tentative rebound in the Western Cape, which had experienced a price correction,”
Golding says. “Despite this, the Western Cape remains the top performing major region overall, with the strongest regional price growth (6.75%) across all price bands.”
Given that these statistics are for the pre-election period, he says this is a “positive indicator” which makes the case for a turnaround even stronger. The decision to keep the repo rate unchanged will likely allow market activity to pick up post elections, agrees regional director and chief executive of Re/Max of Southern Africa, Adrian Goslett.
“We remain optimistic for longterm house-price growth. On the other hand, the slowed rate of rental inflation we’ve seen over the past year has had the positive effect of subduing the overall inflation rate. Should rents inflate along with property prices, interest rate hikes will also become more probable.”
Goslett encourages existing tenants and first-time buyers to enter the property market now, before prices rise. Echoing this, Mike Greeff, chief executive of Greeff Christies International Real Estate, says buyers will not face increased difficulty in obtaining home loans.
“This is great news for the property sector as there are more potential buyers looking at the available stock and, in short, the odds of selling your property quickly have improved.”
Although believing the MPC should have been “more aggressive” and cut the interest rate, Seeff Property Group chairman Samuel Seeff says the continued weak economic climate and low demand has led to a considerable rise in stock levels, and because price growth has flattened to around 4% at best, it is an “excellent time” to find a good deal.
Additionally, increased competition among the banks for the limited pool of mortgage loan applications means there is a more favourable lending climate, he says.
Those who are buying are looking for an irresistible price and sellers should be ready to capitalise on that demand. “The reality of an over-stocked market means that although there is an expectation of improvement, indications are the market will continue to trade relatively flat for the rest of the year with price growth forecast to remain in the range to 4% at best.
“It is a great time to buy and buyers should now take advantage of the opportunities in the market,” Seeff says.