I’ve lost count of how many times I’ve been asked this question in my 29 years of real estate. It’s the first thing that real estate agents are asked when meeting both new and old acquaintances. And it’s a question I just love answering.
The obvious answer that most agents would give would be either “good” or “bad”, or somewhere in between. But in reality, the answer is that there are great opportunities for buyers and sellers alike.
For example, if you were in the market to purchase property at the moment, the market would be absolutely fantastic! Motivated sellers are very realistic and are listening to the market. The result is that there are some exceptional buys at the moment. Even developers appreciate the market we’re in and, in many cases, are incentivizing buyers.
Not only are properties well priced, but the banks are also really hungry to do home loan business. If you have a deposit and are a low-risk client, you will get a very competitive rate.
The same applies to tenants. For a number of years now rental values have increased at record rates. But today there is a strong supply of rental property and lower demand. The result? Landlords are listening to the market and pricing accordingly.
So what if you’re a seller? Well, it’s true that the market isn’t a buoyant as it was a couple of years ago. In order to sell, you will need to listen to the market. Despite this, sellers are able to achieve strong prices when correctly priced and well marketed.
Property investment is a medium to long-term project. In most markets, it shouldn’t be possible to purchase a property and flip it within a year or 2 at a profit. When this happens it’s the exception, not the norm. If you purchased a property 10 years ago, even in the current market, you should generally be making a good return on investment.
It’s also true that when you sell in a tougher market you also buy in a tough market. So what your perceived “loss” is when selling can be recovered when purchasing. The only time you lose on a property investment is when you’re forced to sell at a loss. This can be avoided by not overextending yourself so that you can ride out a quieter market and avoid being forced to sell.
The magic word is “opportunity”! There is opportunity in every market – especially a market like this. Discerning investors will be turning to property now in the knowledge that, when history repeats itself again, their asset will generate great returns in the next 5 – 10 years. When you consider the volatile Rand, the high risk in investing on the stock market, and the fact that inflation negates the interest you earn in the bank – where else can you turn to?
Property. It offers great returns for minimal risk. Opportunity is knocking…. Speak to a knowledgeable estate agent to take advantage of this market.
Principal, Harcourts Platinum