Johan Jacobs: Navigating the current market
Category Expert Insight
Let's face it, the current financial climate is placing strain on the property market. The FNB House Price Index growth slowed to 1.1% in July, down from 1.6% in June (revised from 1.7%) . Buying activity has slowed down. Lending standards have tightened, and borrowing costs have increased.
This is the bad news. The good news is that with the guidance of a reputable and experienced estate agency you will be able to navigate the market even though affordability is constrained.
Market is still active
The fact is, good agencies such as Seeff Plattekloof are still experiencing a fairly active market. In fact, two of our property practitioners closed three property sales each in one month.
Our secret is that our property practitioners have the experience and insight to value and price property in line with the current financial reality where buyers - already strapped for cash and facing higher interest rates - will not be reeled in with over-inflated prices.
What buyers need to know
Yet buyers are experiencing a Catch 22 situation - yes, it is a buyer's market but mortgage payments are higher due to the increased interest rate. Therefore it is important that you are informed by an experienced agent on the total costs and mortgage you will be expected to pay.
Hope for homeowners
If you are a homeowner, it could be that the increased mortgage payments are putting you under pressure to sell your property. In this case it is of utter importance that you deal with an experienced agent who knows the area and will valuate and price it correctly so that it sells without delay.
Remember, an experience agent will consult CMA Info and Lightstone reports that provides information on recent property transactions, and sold properties in a specific area. The agent will then make a valuation based on their expertise regarding the area, recent sales, the condition of the property and the price range of other competitive properties currently on the market.
Pricing and affordability are key
My advice therefore is twofold: If you want to sell, get a respectable, experienced property practitioner to price it correctly. If you are a buyer, be aware of the interest rate and affordability before you put in an offer. A glance at the current economic climate shows the interest rates will not return to the lower 2021 levels soon, so swim with the current and you will reach the shores safely - even with a fish on the line!
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