According to Samuel Seeff, the chairperson of the Seeff Property Group, the property market is turning, with a shift towards favouring buyers in many areas. The stagnant economy and higher interest rates have led to fewer buyers and longer transaction times, resulting in an increase in stock on the market, particularly in Gauteng and the inland regions. While there is no distress in the market yet, many people are selling for financial reasons, while others are selling to emigrate to areas with better services and amenities. Two key elements that benefit buyers characterise the market: favourable mortgage lending conditions and flat price growth.
Seeff highlights the continued favourable mortgage lending conditions, which are at their best since implementing the National Credit Act in 2007/2008. Despite a higher interest rate of 11.75%, it is still below the average of previous years. Buyers can still secure higher loan-to-value mortgages, with first-time buyers even obtaining 100% bonds. This competitive environment among banks for home loans is reminiscent of the pre-2007/2008 period.
Another factor that favours buyers is the flat price growth in the market. House price growth has consistently declined over the past 18 months, averaging 2.7% in April, compared to 4% last year. The market has seen muted price growth outside of greater Cape Town for over a decade, reflecting weaker economic trends. This muted growth presents an opportunity for buyers to find properties at lower prices than if there had been stronger price growth.
Seeff advises buyers to take advantage of the current market conditions, as weak markets often offer better value and the potential for negotiating favourable deals. However, sellers must be aware that there are fewer buyers and increased stock on the market. They must ensure their properties are in excellent condition and offer good value to attract potential buyers.
Follow us on Google News.