Buyers should take care not to wait too long before taking advantage of market opportunities and should especially not wait for further interest rate cuts. Bear in mind that the current rate is at a multi-year low, providing strong motivation for buyers to enter the market now.
One risk of waiting too long is that we could potentially see a rate hike as the Middle East conflict continues to put pressure on oil prices, which creates a considerable inflation risk. While we continue advocating for the Reserve Bank to hold rates steady rather than hike them, the reality is that anticipated rate cuts are now likely delayed. Waiting for these could therefore mean that buyers lose out on a favourable window of opportunity.
The best time to buy is always now, especially since the interest rate remains on a multi-year low. One of the most compelling reasons to act now is the favourable mortgage lending conditions. The banks continue showing a strong appetite for lending with low deposit requirements and potential rate concessions for qualifying buyers that were quite unheard of a few years ago.
At the same time, muted price growth in many areas means you can find property well below what these may have sold for otherwise. The market remains favourable for buyers across most other areas outside of the Cape. Gauteng, in particular is offering outstanding value for buyers to get in while prices are flat and take advantage of increased bargaining power.
Waiting for further interest rate cuts also risks facing more competition as a rate cut usually drives higher buyer demand. Property values could also climb, erasing any potential savings. Provided you buy within your means and can absorb any interest rate fluctuations, it is generally better to buy now and secure a good price, as you will in any event benefit from any future rate cuts when your monthly home loan repayments eventually come down.
Samuel Seeff
Chairman of the Seeff Property Group
