Despite interest from new home buyers, the property sales deals being concluded remain low even with interest rates still at their lowest levels.
Steady interest rates will bring about opportunities for home buyers in 2013 while house prices will continue to see a measured increase.
Although the repo rate remained unchanged at 5 percent following the MPC announcement last week, property deals being concluded remain relatively low due to banks' strict lending criteria and the cost of credit.
This is according to Craig Hutchinson, chief executive officer of Engel & Völkers Southern Africa.
He explains that this is due to, after the global economic recession, more people having become aware of the importance of limiting their credit, as pressure still remains on different working sectors.
However, he says this does open opportunities for buyers with access to credit or cash as there is still an oversupply of distressed properties on the market.
“This allows would-be buyers to potentially buy properties lower than the prices seen five years ago.
“These buyers purchase properties at a very low cost in a market that is steadily inclining, which could result in a very profitable long-term investment,” he says.
Asked what the impact of the repo rate remaining unchanged at 5 percent and the lending rate at 8.5 percent is on the property market, he says, this bodes well for both residential and commercial property sectors as property always performs consistently under a stable interest rate environment.
“It enables the investor or home buyer to predict, with a degree of certainty, on a leveraged property, what the cost of debt is going to be in the foreseeable future.”
Meanwhile, Adrian Goslett, chief executive officer of RE/MAX of Southern Africa is of the opinion that consumers still recovering from the festive season spend will have a good time to get their finances in order.
“I believe it is likely that the interest rates will remain within the current range of 8.5 and 9.5 percent for the next 12 months,” says Goslett.
He says the market continued to show improvement in 2012 in terms of both sales volumes and property prices and while lending criteria remained tight, 2012 was a solid year for the property market in South Africa.
Steady interest rates will bring about opportunities for home buyers in 2013 while house prices will continue to see a measured increase, he points out.
He adds that would-be buyers who are creditworthy and have access to finance will be able to find property investment options that meet both their criteria and their pocket.- Denise Mhlanga