Getting into the Property Market - 06-16-09

June 16 - Although financial experts show that South Africa is nearing the end of its recessionary period, it may take a while for the South African property market to catch up with this news.

As a result, this may be the perfect time for bargain hunters to enter the property market, before prices start to rise again.

Companies such as Absa predict that real prices will continue to decline this year; however those who enter the market now will remember that the industry is cyclical and is already showing signs of improving - meaning that prices will start to rise again in the near future.

Industry analysts point out that bargain hunters should take into account that the days when quick monetary gains were made in the property industry in the past have gone. Instead, they say that those who invest in the market now will see a growth in profits over a longer period of time. Those expecting to turn a quick buck, then, will be disappointed, they point out.

Naturally, before buying a home, financial ability is the main concern. Potential homeowners will need to determine exactly how much they can afford to repay each month, and should not rely too much on further rate cuts, since the Reserve Bank does not have much scope to cut much further.

Homeowners will need to have a substantial amount of money to put down as a deposit as banks are still reluctant to finance home purchases right now. For that, homeowners will need to enter a "savings mentality" in order to raise the capital and qualify for a home loan sooner than later.

Spending time getting to know the property market and determining exactly how much they can afford will give potential buyers the upper hand when a bargain comes around, allowing them to act quickly and snap up a home without dithering about facts that could have been learned beforehand.