While interest in the property market has been stimulated through interest rate cuts, affordability remains a key concern for buyers and sellers alike.<\/p>\n
\u201cIn a recent meeting with our digital advertising partners, it was pointed out to us that the interest rate cuts have stimulated interest among buyers, as revealed by an increase in \u2018buy a home\u2019 search terms during this period.<\/p>
\u201cHowever, it is unlikely that this peak in interest will result in too many sales as few South Africans will be able to afford to make such a large investment at this time.<\/p>\n
\u201cSadly, the earning potential of many has been either directly or indirectly impacted as a result of Covid-19.<\/p>\n
\u201cThe cuts in interest rates are, therefore, only likely to help consumers keep up with their debt repayments rather than allow them to take on new debt,\u201d explained Adrian Goslett, regional director and CEO of RE\/MAX of Southern Africa.<\/p>\n
However, even though it is unlikely that we will see too great of an increase in qualified buyers as a result of these and any further interest rate cuts, Goslett explained that the housing market does still stand to benefit.<\/p>\n
According to him, dropping interest rates allows struggling homeowners the opportunity to keep up with the instalments on their home loans.<\/p>\n
This means that fewer homes will be forced onto the market which lowers the possibility for a housing market crash where supply far outweighs demand and property values plummet.<\/p>\n
If we do reach a point where too many homes enter the market as a result of the shrinking economy and an inability to afford home loan repayments, the market will fall into a lull before correcting itself.<\/p>\n
<\/p>\n
ALSO READ:<\/span><\/p>\n Be alert and aware when entering or leaving your property<\/a><\/p>\n Ways sellers can follow the colour trends for 2020<\/a><\/p>\n <\/p>\n \u201cA flood of homes to the market will lead to downward pressure on asking prices.<\/p>\n \u201cEventually prices will drop to a point where buyers are incentivised to purchase again, which could lead to the market rectifying itself through a possible housing boom later down the line,\u201d Goslett said.<\/p>\n \u201cMy prediction is that activity within the housing market is going to be slow at best once the lockdown ends and the Deeds Office and all subsidiary services re-open.<\/p>\n \u201cIt will take some time to process the transactions that were already in line and any new transactions will take longer to be processed and finalised as they await the re-opening of subsidiary services.<\/p>\n \u201cThis will also have an impact on the property market as a whole.\u201d<\/p>\n In closing, Goslett advised sellers is to be patient and realistic about their asking price if they want to close a sale after the lockdown period.<\/p>\n \u201cMy advice to buyers is to enter the market as soon as they can if they can afford to do so, as interest rates are at a record low and house price growth is stagnant.<\/p>\n \u201cFor existing homeowners, I would recommend keeping the repayments on their home loan the same as they were before the interest rate cuts if they can afford to do so, as this will allow them to save greatly on interest costs and shorten their lending term.<\/p>\n \u201cIf they are still unable to afford their repayments even after the cuts, I advise that they speak to their lenders to explore their options,\u201d Goslett said.<\/p>\n For more advice around homeownership visit www.remax.co.za.<\/p>\n <\/p>\n * Notice: Coronavirus reporting at Caxton Local Media aims to combat fake news<\/strong><\/em><\/p>\n Dear reader,<\/em><\/p>\n As your local news provider, we have the duty of keeping you factually informed on Covid-19 developments. As you may have noticed, mis- and disinformation (also known as \u201cfake news\u201d) is circulating online. Caxton Local Media is determined to filter through the masses of information doing the rounds and to separate truth from untruth in order to keep you adequately informed. Local newsrooms follow a strict pre-publication fact-checking protocol. A national task team has been established to assist in bringing you credible news reports on Covid-19.<\/em><\/p>\n Readers with any comments or queries may contact National Group Editor Irma Green (irma@caxton.co.za<\/a>) or Legal Adviser Helene Eloff (helene@caxton.co.za<\/a>).<\/em><\/p>\n <\/p>\n Hav<\/strong>e a story?<\/strong><\/p>\n Contact the newsroom by emailing: Melissa Hart (Editor)\u00a0<\/span>germistoncitynews@caxton.co.za,<\/a>\u00a0<\/strong>Leigh Hodgson (News Editor)\u00a0<\/span>leighh@caxton.co.za\u00a0<\/a><\/strong>or Busi Vilakazi (Journalist)\u00a0busiv@caxton.co.za.<\/strong><\/a><\/p>\n Also follow us on:<\/p>\n
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