So just what will happen in the property market in 2013? No one really knows, but all indications are that the trend for 2012 will continue.
This year we experienced consistent demand for property. This consistent demand and the steady resultant sales have resulted in a drop in the number of properties available for purchase.
This is healthy for a property market. Like all markets, the property market works on supply and demand. When there is an over-supply of property and no increase in demand, then property priced drop. Where the demand is good and stock levels drop, property prices increase.
What we’ve seen in 2012 is an increase in property values, in general, in the region of 5 -7%. While not exceptional, it is still considerably better than the fall in values experienced in 2009 and early 2010.
So, if the current trend continues, we can expect to see similar growth in property values in 2013. Does this mean it’s best to sell later? Not really, as inflation is in the order of 6%. This means that your Rands purchase you 6% less goods next year, and this virtually cancels out any growth in property values.
So, if you are wanting to sell your property, then list when you are ready, and settle for fair market value.
On the positive, what this does mean for property buyers is that your asset will keep pace with inflation. Property has always been a long-term investment – and that’s the view we should always take. The days of buying and selling and making a quick fortune are over, for now.
One of the trends we can expect to see is that the banks will reduce the amount of 100% finance they do. Sadly, this will mean that most buyers will have to put down a deposit of at least 10%, and also have the transfer fees available.
In addition to this, the banks seem to be offering very poor interest rates. The higher the “loan-to-value” the worse the interest rate. So be prepared for this, and factor it into your affordability calculations.
It’s been a pretty rocky financial year globally. We wait with bated breath to see what will happen in Europe and the USA with their critical debt issues. And yet, despite all these issues, we have still seen steady movement in the local market.
In fact, Harcourts Platinum has experienced an 80% increase in sales this year – which just goes to show that, if a property is correctly priced and well marketed, it will sell.
The fact remains that we live in a spectacular part of the world, and we enjoy a really good lifestyle. Enjoy your holidays and travel safely. Let’s all do our part to make 2013 a year with great memories for our families and loved ones.