There can be arguments made of whether the current property is for buyers or seller, but people need to think through their decisions considering the high interest rates. Picture Pixabay
While homeowners and potential homeowners think about the buying or selling property, interest rates have played a part in determining whether it is a buyer's or seller's market.
The South African Reserve Bank’s (Sarb) Monetary Policy Committee (MPC) is expected to make an announcement regarding the repo rate on March 27.
According to FNB Economics, it is expected that the interest rates will remain unchanged.
FNB Economics said that in January last year, rates were hiked by 25 Basis Points (bps), followed by two successive 50 bps increases in March and May.
Since then, interest rates have remained unchanged at 8.25%, as the MPC monitors the impact of higher interest rates on local demand.
According to the chairman of the Seeff Property Group, Samuel Seeff, conditions remain weighted in favour of buyers, making it still largely a buyer’s market, especially outside of the Western Cape. However, even in the Cape, it is largely a buyer’s market.
“The upside of a buyer’s market is that those who can afford to purchase now may well reap the rewards once the market turns and property values rise again,” said Seeff.
Chief executive at Pam Golding Property Group, Dr. Andrew Golding, said that due to factors such as a weak economy, rising cost of living, and high interest rates, many areas continue to experience a buyer’s market.
Sellers are competing with many other properties for sale.
However, Golding said that the market is not a one-size-fits-all situation but rather based on specific and particular supply and demand factors in almost every area and suburb in the country.
“For example, pockets of excellence in prime locations, central commercial hubs and other sought-after areas which tend to consistently experience strong demand – thereby creating a seller’s market,” Golding said.
Agreeing with Golding, Seeff said: “There are always exceptions with pockets of high performing areas and property classes such as sectional title and estates where demand might be higher and sellers are achieving higher prices.”
Advice for buyers
Seeff said that for buyers it is a good time to buy despite the higher interest rate.
“Prices have been flat for two years which means you can find the same value compared to two years’ ago. The banks are still lending and qualifying buyers can even find rate concessions.”
According to Seeff, deposit requirements are still below 10%, although first-time buyers can still find full 100% bonds and some banks will still go to 105% to include costs.
Advice for sellers
“Given that the current market is in many instances more favourable to buyers, if you are serious about selling your home, it is imperative that you list it at a realistic, market-related price,” Golding said.
According to Golding, this is where expert advice makes all the difference in achieving a successful sale at the right price and in a reasonable time frame.
It is not in the seller’s interest to use an agency that has given an inflated price assessment for a property as this is self-defeating, because the likelihood of the property selling is extremely low.
You also cannot assume that the agent with the highest assessment of your home will achieve the highest sales price.
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