GAZING INTO THE PROPERTY CRYSTAL BALL FOR 1012

Crocodile Harris’ song: Give me the good news, is very apt in our time. We are being bombarded with bad news – isn’t there some good news somewhere out there? We need to hear the good news too!

The guru’s, trying to make sense for 2012 by gazing into the property crystal ball, remind us that there is some bad news going around in the market place. But there is also a lot of good news! The bad news:

Ø          The interest rate will most probably not be reduced any further. The Reserve Bank seems to have a very cautious approach in this regard, and there is no reason to expect that they will act differently in 2012.

Ø          There was a notable decline in residential demand in 2011, and it is expected to continue.

Ø          The value of properties increased on average by 3.1% during 2011. Should you throw inflation into the equation, there was actually a decline of 1.9%. It is expected that average growth before inflation, might only be 2% this year.

Ø          Banks are still very strict when it comes to bond approval. Deposits of between 10% and 40% are still required. This makes it very difficult for 80% or more of all purchasers, to get bond finance.

Ø          Many sellers accepted lower offers for their properties during 2011. This will continue in the year to come.

Ø          There can be no positive growth in the property industry before the economy recovers.

But there is not just doom and gloom – there is also some good news:

Ø          With the prime interest rate at 9%, it is still the lowest in many years. If it is at all possible to buy now – do it!

Ø          Because of the high fuel price, people tend to buy properties as close as possible to their work place. Properties within easy reach of key business nodes will be in higher demand than elsewhere.

Ø          During the second half of 2011, more and more purchasers managed to get a 100% bond. The key factors are still a good credit record and the client’s affordability of the bond repayments. Those with a good financial track record and discipline will reap the benefits.

Ø          Purchasers with a deposit are always in a good position to negotiate a better bond rate below prime interest rate.

Ø          Banks have assisted sales initiatives to assist a seller to get a distressed property sold. Usually purchasers can buy such properties below market value.

Ø          Consider joint ownership of properties. Three or four friends or family members can pool their cash and be in a position to pay a deposit and get a bond approved. In time they can sell it and buy two properties etc.

Ø          It is important that sellers put their property on the market at the right price.  A well priced property will sell.

Ø          The same applies for a well maintained property. Groom your property before you put it on the market.

Was 2011 a bad year for property sellers and purchasers? Yes and no. The KZN North Coast is increasingly becoming more popular amongst purchasers, for various and obvious reasons. In our area, 2011 wasn’t the best, but it certainly was not the worst year in the industry. Many successful sales took place. We are currently working with more able purchasers than ever! Call us, whether you want to buy or sell.

May 2012 be an exceptional year for you in every aspect of life!

Gert Vorster

Engel & Völkers

Office: 032 946 7777

Mobile: 083 259 9422