While many consumers might still remain jittery in the current economic climate, now is actually a very good time to invest in residential property.
First of all the property market is very slow, and sellers are aware of this. This makes it a buyers’ market – buyers will have much more bargaining power when they consider buying a specific property as the seller doesn’t know when an offer to purchase would land on the table again. Adding to this, house price growth is still very slow, following a brief period in 2008 when house prices were actually decreasing. The result is that you should be able to find a real bargain out there.
Banks are only just starting to relax their credit loan requirements, and with the South African interest rate currently at its lowest point in over 30 years, getting a bond approved will most likely be much easier now than about a year ago.
More good news for potential buyers of residential property, as well as for those still paying of a bond, is that the governor of the reserve bank indicated in October that she is still concerned about the slow growth in the South African economy. Inflation remains in the lower end of government’s inflation targets, and seems to continue creeping downwards. This could well indicate a possible reserve bank decision to follow with another rate cut later this year, or early in 2011.
In other words, not only will buyers have all the bargaining chips on their side when presenting an offer to purchase on a specific residential property, but they will also most likely be able to find affordable financing through one of the banks. And with the possibility of further interest rate cuts, this sure looks like a good time to start house hunting.