Real Estate Investor Magazine South Africa November 2018 | Page 39

The Tsunami Phase Big cities are booming, followed by the outlying areas, and spreading across the market. Construction projects are numerous and investors who got in early are enjoying price growth. At this stage there might also be a mid-cycle dip, where the market experiences some negativity – making it a great time to buy before the boom sends prices skyrocketing. The Boom This phase is marked with huge media hype and buyers are snapping up properties without discernment for fear of missing out. Vendors push up their property prices and houses are selling for more than their asking price. This is usually when you see huge construction projects, such as the Biggest Skyscraper in Africa, underway – banks are confidently supplying funding for these projects because of the double-digit pay-offs investors are enjoying. According to analysts, the last two years of this prosperous final period of the cycle is the absolute worst time to buy – the so- called winner’s curse – because properties purchased during this time then fall beneath the purchase price. During this phase, it’s best to do nothing unless you can find a real yield property. The Crash create great opportunities for individuals with a good eye. This is usually the best time to buy – even if your broker says not to! The Upturn New buyers are entering the market because of rock bottom prices. Prices slowly start growing again, but without real media attention. Optimism starts to set in and property goes back on the market. Government stimulus, low interest rates and positive returns are all sure signs that the upturn is underway. However, this is a good time to be selective with your buying, aiming for properties with a great rental income rather than capital growth. It’s an equal phase, neither a buyer or a seller’s market. SOU TH AFR ICA N co.za www.reimag. .za ag.co reim www. SOU TH AFR ICA N SO A F R IC U T H AN www.reimag. co.za www. © reim ag.co .za © h s Touc e Mida RISK VS RETURN FOLIO with th Property WOR Gifted YOUR Hotsp LD ots PORT s Abound tunitie pe To ining Ca PROPERTY TECH MIK W E ARREN rties g SA’s Township Prope Showcasin Y OR: OLOG Rights SRUPT HAIN TECH tle N s and Property LOCK Ac C cess to La JUNE nd Ti 2017 R80.00 (Incl. VAT) NER AWARDS WIN 0 6 0 SM 9 1 NALI A JOUR SAPO r Greate l. VAT) .00 (Inc 17 MAY 20 1995 9 77 R80 0 0 9 5 655001 9 77199 05 01 6550 Property Year ion of the Publicat & 2015 2013 YOUR FI FREE NANCIAL Getting DOM GUID prop a foothold E erty la dd on th e COMMERCIAL TREN er DS Multiple Oppor Cape Town CBD Spike REAL ESTATE TECHNOLO M SMART PRO GY ake more PERTY mon MARK sform Game Game ETERS Your Wealth Master PRO the Investment OFFSHO ey in 2017 Tran PERTY PRACTIT UK & RE Invest Major Changes Afoot IONER’S US BILL or New Disruptors in the ROBE H R E T WEALT H PRO 7 Habi TECTION ts of Hi FL B A UF X FETT KIYOS M A A K S I R HA M B A A N WINNER SAPOA JOURNALISM JULY 2017 AUGUST R80.00 (Incl. VAT) 2017 Property 9 771995 655001 Friend ly Mar kets WINNER SAPOA JOURNALISM AWARDS 06091 AWARDS Property Publication of the Year 2013 & 2015 SOURCE Gumtree Property © © R VESTO REAT in IN YOUTH IN PROPERTY to W US ing their Space T Claim TA S F JUN er K ty? SA’S ECONOMY GROWING ACTICE or Prop A Tale T of PR Two Cities AL BES shore INNOVATION NATION wn’s Fore The bubble bursts as property prices escalate to unaffordable levels and the market crashes. Banks are nervous about lending, finance becomes tough and depressed properties are going for a song. Remember that unless you’ve purchased property during the winner’s curse, the value of your property will always go up, so make sure that you have enough rental income to hang on to it when there’s a recession. Conventional wisdom will tell you that the best time to buy is always “right now” but it’s important to have a strategy in place. Build your portfolio during the good times and reassess before the crash to weed out under-performers, selling to buy during the opportunity phase. You don’t have to mark your calendar – but keep your eyes peeled. Publication of the Year 9 77 1995 2013 & 2015 6550 01 R80.00 08 (Incl. VAT 09 ) 3 SAPO WIN A JOUR NER NALI SM AWA RDS Property ion of 2013 & the Year 2015 Publicat Effectiv e Trus ghly tees Fixing up Joz i Take your business or development to the next level Advertise in a leading property magazine. Contact Neale at: [email protected] [phone]