There is really no good or bad time to buy. When you have big changes in the market like now, you may think you made a mistake but you didn’t.
Actually, the best time to buy is when properties seem like the worst investment ever, just like now.
The worst time, if you knew what was happening, is when the market reaches its peak, because prices may not increase for a year or two or even drop, though they seldom drop by much.
Between 2000 and 2003 for instance, prices went up nearly three times and fell back about 10 percent after the peak.
However, they are now double what they were in 2005.
What is far more important is to pay the right price. Getting value for money is far more important than what price you pay.
People who have bought fancy R5 million houses are battling to sell them because there is just not a market for very expensive houses – especially where they are big but plain ordinary bland homes.
The lower end of the market such as normal rental flats is still very active and we have a constant turnover in this market.
Some of these buildings have seen quite sizeable increases in price and good demand despite the COVID-19 lockdown.
Normally, when the market is active and business is going well, the up-market expensive homes will be in demand again.
So, the right time to buy is when you can buy the right property at the right price.
How do you decide where to buy?
This is an interesting question and the answer must be – it depends on a lot of things.
Some of the considerations include: are you buying to live in with your family or rent it out? How much can you afford? The distance to work and nearby schools? Are you buying for residential reasons or business reasons?
If you are buying to rent the property out, then your preferences don’t matter, you should buy where tenants are happy to live at the rentals being charged.
Offices, for example, need to be easy to find, walking distance to student accommodation seekers, have plenty of parking for clients to pop in and out but they don’t always have to be fancy.
They would be less suitable if for instance, they were on the fifth floor rather than being a single-storey building.
When buying for investment the property that you buy does not need to be in the same town and I would be very happy to own a property in the UK or Australia for instance – provided it gives me a good return.
Again when buying holiday property you need to have it on the coast near nice beaches but you could consider owning a full title house which of course demands lots of care and maintenance, sectional title unit, a time share unit or even a consortium.
Everybody has their favourite areas.
In Bloemfontein, for example, high-income business people like Woodlands and Heuwelsig but those looking for more affordable homes might consider Vista Park very attractive.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant.