The Year Ahead: What to Expect

The information in this article is courtesy of Realestateweb (Fasten your seatbelts: it’s another rough property ride – 22 December 2009)

After a difficult year, the property market is set for another bumpy ride according to experts. Sure with the interest rate finally dropping a bit we might feel pessimistic but will this really make a difference in the year ahead.

There are some things we can take into consideration including that banks have tightened up on lending criteria to the point where home loan providers are rejecting about one in two buyers. At the moment there is no sign that this is going to change soon.

The amount of buyers has drastically falling due to harsher economic conditions. With less and less people considering buying or selling houses, estate agency will have a hard time keeping their heads above water.

Property prices have fallen and some are saying that it might not be the bottom yet, and while buyers are sitting on the sideline waiting for property prices to reach the bottom, agency are having a hard time surviving. These buyers are also waiting for expected interest rate drops, meaning that they might get a bigger home loan in 6 months’ time.

The unstable political scene will also have its effect on the property market in 2009. The 2009 elections in South Africa might bring some necessary relieve, but will also mean that buyers will sit on the sideline and wait before they enter the market. With our government yet to resolve the problems in Zimbabwe, we might also see more sellers that buyers. This is bad news because the property market has an excess stock as it is – particularly in the R2 million plus range.

If you are, however feeling optimistic about South Africa’s future there is not better time than now to invest. You are likely to pick up excellent bargains with great potential should things start looking up again.

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