07 Jan 2013
With residential property in many South African locations at last showing signs of slow but not insignificant price rises, it is now a good time to buy a second or third property.
According to Bill Rawson, chairman of the Rawson Property Group, the philosophy of buying at least one home per annum to build up a property portfolio remains valid – for those who can get bonds. With interest rates at their current levels and prices still low, he says, it makes no sense to be ignoring the property market.
In addition, Rawson says, now is a good time to apply for a fixed interest rate to run for two, three or even four years.
“Even if the bank insists that it can only agree to such a bond if the rate is one percent or 1.5 percent higher than the current rate, I would still advise people to go for it.”
If it means stretching their finances, potential investors should now be considering the advantages of owning a few properties, he points out.
He says there are always good investment opportunities, even when, like now, the market is improving but it can take effort to find them, saying from their experience, many investors do not take enough trouble and skimp on their research.
Would he recommend using an estate agent to help in the search?
Definitely, but it would be a mistake to only use one agent, rather consult two or more agents so that you can select the best from what they have available, he says.
Does Rawson’s recommendation of a fixed interest rate indicate that he sees rates increasing substantially by 2014/2015?
Not necessarily, he says, but the peace of mind that such an arrangement can give and the ability to budget for the foreseeable future would, in my view, make this a good move right now, especially as the South African economy, with a 2.5 percent growth rate and reasonably contained inflation, is performing better than at least one-third of those elsewhere in the world and this, coupled with the difficulty many people have in getting mortgage bonds, will inevitably boost house prices.
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