Auctioneer says it is the right time to buy property
CONDITIONS for investing in property have never been this good, according to ClareMart Auction Group chief executive, Jonathan Smiedt.
A number of factors are responsible for this optimistic view, which Smiedt believes is shared by shrewd investors who are building property portfolios by taking advantage of the current economic climate.
“With the repo rate at a low 5.5 percent and the benchmark prime rate at 9 percent finance is now more affordable. This creates perfect conditions for those who are in the market to buy, coupled with the banks relaxing their lending criteria and low property prices due to more realistic and distressed sellers,” says Smiedt.
“House price growth is still slowing down after a mini-peak i n May t h i s y e a r e n a b l i n g investors to snap up properties at record low prices. Finance is sometimes being offered at below the prime rate, which makes deciding to buy even easier. Smart money is moving to the property sector, which undoubtedly will show a recovery in the near future, so now is the time to buy,” says Smiedt.
He says the experts ag ree that more rate cuts and improved economic growth is needed to turn the declining trend in the residential market around, and those with money or access to finance stand to cash in if they buy now.
“Circumstances have seldom been this favourable – this ‘basket of conditions’ allows investors to hand-pick their investment properties at bargain prices,” says Smiedt.
He predicts this situation will continue for the next six to 12 months, before increasing growth affects property prices.
He says the recent 50 base point rate cut might not have any immediate impact on property price growth, but will do much for positive sentiment.
However, he believes the days of making quick profits in property are gone.
“The post World Cup euphoria has started to wane for l ocals, but visitors who still rave about our successful hosting will certainly return to buy p r o p e r t y. I n t e r n a t i o n a l i n - vestors will return, especially with the easing of exchange controls on individuals and companies, which makes i nv e s t i n g i n S o u t h A f r i c a far more attractive for foreigners.
“In addition to this, our exchange rate still favours foreigners – even at present levels. Regardless of a stronger rand, foreign investors still benefit from the exchange rate.”
GOING, GOING, GONE: ClareMart Auction Group recently sold 201 Altmore at the V&A Marina to a local buyer for R3.5 million.