Many bargain buys still "out there" for the shrewd investor

The South African residential property market can certainly still offer investment buyers bargains at anything from 20 to 50% below their former market value. This was said recently by Bill Rawson, Chairman of the Rawson Property Group, who is still investing steadily in this field. Rawson warned, however, that hunting down the right properties takes more time and effort today.

"In the old days," said Rawson, "to keep tabs on the market, all one had to do was to read the newspaper advertisements diligently. Today finding a bargain calls for being open to other channels."

Many estate agents today, said Rawson, advertise relatively seldom in the printed media and rely largely on internet exposure – and some hardly advertise at all.

"Many of the top level performers in the estate agency world are, first and foremost, one-on-one relationship operators. They work, primarily and highly effectively, through personal contact with a comprehensive list of clients that they have got to know throughout the years and with whom they have built a mutual understanding."

Any investor looking for an inside track to good buys, said Rawson, should make it his business to keep in touch with the top performing agents serving the territories in which he (the investor) is interested. This may mean having to view a number of unsuitable properties but the "nuggets" will be there.

Property investors should also search relevant property websites and possibly take a preliminary look at any property which appears to offer good value.

In addition, they should try to build up relationships with banks and liquidators: the number of repossessed and distressed properties on the market, although not as high as it has been recently, is still significant and these properties can often still be bought at prices that may well seem almost ludicrous two years from now.

This type of innovative, independent action, added Rawson, has become all the more essential today because estate agents are now putting fewer homes up for open house show days.

Repeating what he has said on several occasions over the past year, Rawson stressed the importance of identifying flourishing micro-markets.

"I accept that the FNB economist, John Loos, has a predicted a mere 2,5% growth rate for the property market in 2013. That, however, refers to the national market as a whole – but certain micro-markets in which demand is now high will definitely see value appreciations of up to 10% this year. The 600 or more investors who have bought into Rawson Developers’ Claremont and Rondebosch developments are an example of this.

Traditionally, said Rawson, bargain seekers have focused on the lower end of the market but the selected micro-markets serving the upper middle and upper markets will also be capable of producing very satisfactory growth.

"Those of us who have always favoured property investments ahead of other asset classes are often accused of saying that any time is the right time to buy. I would like to go out on a limb and affirm that, for the investor who does his homework, this advice has never been more valid than it is right now. The bargains are there to be found: go out and look for them."

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