Driv­ers of the mar­ket must be kept in mind

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FI­NANCE It is im­por­tant to keep track of the crit­i­cal driv­ers of the prop­erty mar­ket, ad­vises An­dreas Wasse­naar, prin­ci­pal of Se­eff Prop­er­ties Dol­phin Coast, and keep them in mind when in­vest­ing now. “The two driv­ers are the cost of fi­nance and the avail­abil­ity of fi­nance. To be able to un­der­stand the most likely direc­tion our mar­ket is head­ing in, we need to un­der­stand these fac­tors and the un­der­ly­ing forces that af­fect them. As many cash buy­ers as we do have for res­i­den­tial prop­er­ties, the over­whelm­ing bulk of real es­tate trans­ac­tions are re­liant on mort­gage bond fi­nance. Be­cause of the im­pact the cost of money has on your abil­ity to buy and sell prop­erty, ex­pected changes in the trend and the abil­ity to fore­cast these will as­sist you in mak­ing the cor­rect de­ci­sions re­gard­ing pric­ing, if you are a seller, and the level of debt fi­nance you are com­fort­able with, if you are a buyer. The in­fla­tion ex­pec­ta­tions of fi­nan­cial an­a­lysts, as mea­sured in a sur­vey con­ducted in the first quar­ter of 2011 by the Bu­reau of Eco­nomic Re­search at Stel­len­bosch Univer­sity, are for 5,3% in 2011 and 5,7% next year. Ac­cord­ing to the Re­serve Bank this is ex­pected to av­er­age 4,7% in 2011 and 5,7% next year.”

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