Load shedding, fluctuating fuel prices and protests might leave South Africans feeling a tad bit pessimistic about the future of the economy and of course, the property market.
However, is there really a reason to be worried about the property market? Are things really as bad, as many might imagine?
According to ooba home loans, South Africa’s largest home loan comparison service, not everything is doom and gloom. This follows ooba home loans seeing banks increasingly granting loans of 100% and more of the purchase price to all homebuyers, not just first-time buyers.
In facts, statistics from ooba home loans show a 9.2% reduction in the average deposit required by homebuyers, and 7.1% reduction in the average deposit for first-time homebuyers from Q4 2019, compared to Q4 2018.
With the market ideal for buying a home, the Newcastillian speaks to real estate agents from Allied Real Estate to determine what to look out for when buying or selling a home during 2020.
Susan de Klerk expresses that she feels 2020 is a buyers’ market, with several homes being put on the market to be sold. “I don’t know whether it is due to financial constraints that people are selling, but people must put a lot of thought into their decision of selling. You do not want to sell your home and rent, as rental costs are more expensive than your bond,” she says.
However, if one needs to relocate, Japie Myburgh explains that you have to look at the market. “You will be selling and buying into a low market, which means, there are times you will have to bite the dust and take a good offer when it comes.”
Jackie Smith adds, “You also can’t afford to sell your home and buy into a higher market. Furthermore, when selling, it is important to buy another home as soon as possible, as property prices can change at any time.”
When looking at buying a home, there are certain steps which are important to follow.
Susan and Japie explain that people often forget about transfer and registration costs. These costs do require a substantial amount of money, leaving many first time home buyers losing the home of their dreams because they did not allocate funds to these costs.
Engela Grobler adds home buyers must also look at latent and patent defects before purchasing a home. These include leaking roofs, poor foundation and so forth. Engela says it is important that people selling their homes make defects known to estate agents, so they can notify the potential buyer.
If homeowners remain silent, Japie and Engela emphasis the seller is liable to fork out money for repairs; if it is found they knew about the defects.
In order to protect the homeowner from covering costs of defects, Engela says estate agents have lists which the seller can fill out and state what is wrong.
When it comes to selling, Japie explains that it is important to continue paying your rates and taxes, as well as your bond.
“A lot of people actually stop paying when they want to sell, but you need to pay until the last.”
Furthermore, he says it is also important to keep one’s property maintained and tidy.
“This is because 90% of all buyers buy with their eyes and their hearts,” says Engela. According to Engela and Japie, investors tend to purchase property more logically, looking out for their potential returns in the future.
Susan, Jackie and Engela also emphasise it is important to avoid selling your home through a sole mandate.
They explain this process blocks other agencies from the market, which could help sell your home quicker. “While we all use similar platforms when selling a home, we all have different customers. By not going sole mandate, you have a bigger market to work with,” she says.
However, if one does choose to attempt selling their home through a sole mandate, Japie says one can cancel the contract if they feel their estate agent is not performing.
The four estate agents also claim it is important to sell your house at the correct price, as pushing the price up beyond the house’s value can slow down the selling process.
“It is also important to see at what cost the municipality valued your home, and if it does not correspond with the market value, you will need to address the matter with the municipality,” says Engela.
While the process of buying or selling a home can be rewarding, more and more people seem to be choosing to rather rent a home.
According to Momentum Corporate, only 40% of millennials are interested in homeownership.
However, Jackie says it is important to pre-qualify tenants before they move in. “We are all facing difficult times and by pre-qualifying people, you can ensure they are able to afford the rental.”
As Allied has a client base who rents out property, Japie says it is also important to work with agencies as it does make the process smoother.
Whether you intend to buy, sell or rent, ensure you select a trusted estate agency to ensure your future house becomes a home.
