When is a Good Time to Buy?

Making the decision to purchase a property is not something to be taken lightly.  After all, your property is usually one of your most significant assets.

For many buyers, the question that arises is “Do I make the decision to purchase now, or wait and see what happens to the market?”  There is a fair bit of uncertainty in the South African marketplace at the moment.  An expected but still disappointing mid-term budget speech, the threat of further ratings downgrades, and a volatile political landscape has caused noticeable uncertainty.

The market can only do 1 of 3 things:  Stay the same, strengthen, or weaken.  So do we wait and see what happens, or do you make the decision to move on?  The answer will depend on your circumstances.

Why are you purchasing?  If that need is real and unlikely to change, then there is a good argument for you to make the decision now and move ahead with your purchase.  For one thing, whilst there are some market nerves, you should be able to qualify for a home loan at the moment.  Banks are cautious – but home loans are available to qualifying buyers.  In a falling market, this may change.

If you are waiting to see if the market will improve, then sadly this will mean you will need to pay more for the property later.  This may not be a problem if you are selling a more expensive home to buy something less expensive, but it will work against you if you are purchasing something more expensive.  In this case, you’re better off buying now.

If you are waiting to see if prices will fall, then this may be an option for you, but only if you are purchasing cash, or need very little finance.  Firstly, it’s unlikely there will be a significant correction in the local market.  Most of this correction has already taken place this year, with prices flattening out in most markets.

In the unlikely event of a market crash, finance will be difficult to obtain – so cash will be king.  However, if you are purchasing for a lifestyle change then waiting doesn’t make sense.  One thing we aren’t getting more of is time.  So don’t waste it waiting for the possibility of a drop in property values.

The reality is that most of us purchase property because we have a valid need to do so, now.  It’s unlikely that our need will change.  This year has seen property values settle down, with sellers becoming more realistic with their pricing.  For most buyers, that means you can secure your property at fair market prices.

If you need to purchase a specific kind of property so that you can enjoy a certain lifestyle – then there is no better time than now.  If you’re a bargain hunter, then even in the current market there are some exceptional properties that offer great value.  Speak to the right agent and make the decision!

Steve Caradoc-Davies

Director, Harcourts Platinum

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