Auc­tion­eer says it is the right time to buy prop­erty

Weekend Argus (Saturday Edition) - - 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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.