Property has always been a stable investment, but Is it a good time to invest or buy a home considering our current economic climate? Interest rates are the lowest they have been in decades and are expected to fall further before the end of the year. Rates have fallen by 2,25% since January, no transfer duty on pre-owned homes priced at less than R1 million and prices are expected to be extremely negotiable. This is because of the expected increase in stock in the market from distressed sellers.
Other factors that contribute to the affordability to invest in property are:
- Property prices become highly negotiable as owners and investors who cannot afford to keep their existing properties release them on the market with aim to sell them quickly.
- Interest rates declining making it easier to obtain a home lone and afford monthly payments.
- Demand in rental homes rise for individuals who do not have means to buy.
- Decline of the Rand reaction to Moody’s downgrade in March means that SA property is now that much more affordable and attractive to overseas investors.
Lower income individuals are more able than ever to enter into the formal property market. Essential workers would be even more eligible to obtain financing since they receive a stable income even during nationwide lockdown limitations. These limitations have sped up the inevitable digitalization of the real estate market. More agencies are gearing up to be able to offer prospective clients virtual tours of their listing through the use of Matterport cameras. Not only would one stand to make substantial gain on their investment, the economy will also be stimulated, aiding in the recovery after the devastating economic effects of national lockdown.
“The reason is not only that you will stand to make substantial gains if you do buy, but that you will also be helping to build up our economy and create employment. Rising demand for housing will eventually mean more construction, which is a major employer, but in the meantime every property bought will help to generate more jobs in sectors like transport, the manufacture of furniture and other household goods and the supply of various household services. Building up SA’s property sector as fast as possible will be one of the best ways of creating jobs and making sure that individuals get back into employment,” says Berry Everitt, CEO of the Chas Everitt International property group.