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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
 
Please visit our website at www.prop-law.co.za for more details.
 
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
 
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

07 November 2011

Analysts challenge property pundit`s call not to buy

Analysts challenge property pundit`s call not to buy

Say it is a buyers’ market.

Interest rates are low, property is in abundance and distressed homes are going for a song, so if you are in the market, now is the time to buy. At least that is the view of realtor Engel & Völker and property specialists Lightstone.

In fact, CEO of Engel & Völker, Craig Hutchinson says with interest rates at the lowest it has been in years and with an abundance of property to choose from, now is the perfect time to buy. “It is very important to enter the property market as soon as possible as property should form part of any balanced financial plan and the sooner you own rather than rent, the sooner you start enjoying the capital appreciation which property gives,” Hutchinson said.

He maintains that property is the one asset that remains one of the best inflation beating vehicles over the long term.

In October 2011 the Rode Report for the third quarter advised first time entrants to rather rent for the next four to five years, rather than buy, adding not to expect any capital growth in the residential sector during this period.

Hutchinson says it is expected that there will be a month-to-month decline in the seasonally adjusted house price index in the near team which is good news for new entrants or those who are upgrading.

On first time buyers, the Rode Report said people buying now could expect a much higher instalment than if they were to rent. Erwin Rode maintains if you were to save the difference between what you would be paying if you rented as opposed to what you would be paying if you bought with four or five years in mind, you would actually be better off.

Engel & Völker hold a different view saying renting for less than you can buy and investing in something else only makes sense if you rent with the intention to buy. “Buying a property now would mean a buyer can negotiate a very good deal as this is very much a buyers’ market. At this stage there are also a lot of distressed properties available at below market value that means you will receive better value for your money.”

It says bond mortgages are 30% lower now than two years ago due to the current interest rates. “Even if you pay a premium for a fixed rate loan, it is highly unlikely that rates will be this low again. All these facts indicate that the time to buy is now.”

A Lightstone report has said house prices were particularly attractive in places like the KwaZulu-Natal south coast. Lightstone property analyst, Hailey Ivins, says: “If you look at annual inflation coast versus non coast, your coast is still going down, which means the value of property is going down – they are selling for values that are lower than what they were previously sold for, whereas your non-coastal is going up.

“That’s key to the economics and the pressure people are under… having to sell their holiday homes while still not getting what they want. Now is the time to buy because you’ll be getting property for really good value in terms of what you pay,” Ivins said.

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