Ideal time for buyers to invest
PREVAILING market conditions, including the low interest rates and the range of well-priced properties on offer, make it an ideal time for buyers to invest.
This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa.
“There has been a marked increase in demand for property during the first quarter of the year and with consumer confidence on the increase, it’s an ideal time for the informed investor to strike while the iron is hot. There is no shortage of residential stock and buyers are spoilt for choice when it comes to the variety of deals that are available. But as with any investment, the key element to buying in a recovering market is to do your homework and never invest in something that you don’t fully understand.”
Goslett advises that in order to ensure that you get the most out of a property investment, you should look at all aspects such as location, additional costs that you could potentially incur if you want to renovate the property as well as what the levies and maintenance costs of the property will be. He says that essentially, to make the best investment in current market conditions, knowledge is power and buyers need to know and understand the true value of the property. He says that a good way to assess the value of a property is by comparing the rate per square metre with similar properties. However, he says, you need to make sure you compare properties of the same standard in the same area to help you pinpoint the best value.
“Knowing the average price of property in a certain area with certain criteria will help you to identify whether the property has been overpriced. Buying a property at an unrealistic, inflated price will eat into the investment returns in the long run. If buyers are looking for value for money deals, distressed properties are great investments as they often sell for between 15% and 25% below their market value. This saving will create an excellent opportunity to see real returns in the future,” says Goslett.
There is no doubt that investors looking for good deals will find them in the current property market.
“It is important to remember that property must be viewed as a long-term investment and property buyers should only expect to start seeing a solid return on their investment within three to five years of purchasing the property. Property investments are cyclical and will go through peaks and troughs but over the longer term property will appreciate in value and therefore it remains a sought-after asset class,” Goslett says.