Knowledge Factory has moved its Property Clock back by one minute to 23 minutes to the hour. The Clock measures high-level national trends in the residential real-estate market. It retreated by 5 minutes in 2011 and by 2 minutes in 2012.
Insight* Analyst, Dieter Deppisch, comments: "The decision to move our Property Clock back by another minute shortly after the retreat in November 2012 should not be viewed in a negative light. Rather it is a frank appraisal of where we are in the cycle. Residential real-estate has undergone monumental changes in the past five years due to socio-political and more importantly, economic factors. Just a few years ago, knee-deep in the global recession, doomsday prophets predicted the complete collapse of our property market. The fact that it has continued steadfast, albeit at a slower pace, is testament to the resilience of the South African economy and prudent monitoring by the South African Reserve Bank.
Realistically however, the sluggish pace of house price growth, poor savings culture and challenging trading conditions cannot be ignored. The extent of changes required still paint a picture which favours buyers and we believe this trend will set the tone for 2013 as well. Last year some improvement was evident from lending institutions assisting first-time buyers and increasing LTV ratios (Loan to Value). These steps, along with a rate-cut may not have injected the feverish buying sprees some estate agents may have anticipated, but they have helped the property sector maintain its role as a key driver in the economy.
CREDIT RECORDS: Buyers, both for primary residence and those on the look for investment properties have never had it so good from a pricing perspective although getting finance is the key. Individual credit records have become as important ID books. ID books identify who you are and who you are married to. Credit records identify what you do, how you manage your money and what risk you potentially pose to those from whom you wish to borrow. Many individuals and married couples have been horrified to find that their impaired credit records have effectively "robbed" them of the opportunity to purchase their dream home. Some tenants are unaware that landlords have registered them on the Tenant Profile Network (TPN) where delinquent renters can be blacklisted. Even years later poor financial management can come back to bite you.
Our 2013 Top Tip for first-time home buyers: Save, Save, Save. If you believe that you can afford paying off a mortgage bond of e.g. R7, 500/month, do the following: Let's say your rental is currently R4, 500 per month. Put the extra R3, 000 per month in a savings account. After just 3 years you'll have R120, 000 (with 10% yearly increases) for a deposit. This will count in your favour when applying for a home loan.
Our 2013 Top Tips for primary home buyers: Before signing an Offer to Purchase ensure that you have 1) Correctly priced your current home at a market-related price and 2) Calculated the full cost of moving to the new house.
Our 2013 Top Tip for investor buyers: Do a "dry-run" at some property auctions before actually bidding. Research property data to check what other properties in the area are selling for to check whether what's on offer are peaches and not lemons.
Prime real-estate is available countrywide – do your homework and exploit the current Buyers' market."
Tough decisions require unadulterated information. Knowledge Factory is committed to supplying sophisticated data to help buyers, sellers and property professionals make informed decisions.
ALWAYS consult a local property professional to determine the market's attributes of the specific suburb you are interested in. Get a complete Property Report of any property you are interested in. Advertise your property or rental and get the maximum amount of eyeballs directed at your property.
Article by: Dieter Deppisch - www.knowledgefactory.co.za
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