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Q
I want to take advantage of the favourible first time buyers ’ market right now . Do you think the low interest rates and 100 % bond approval will last for at least another year ?
DAVID COHEN Managing Director - Signatura
MATTHEW QUINTON
New Business Development and Project Manager – Aquacor Property Developers
A
A
There are certainly better times to buy than others . We have seen in the last ten years where there was a big increase in prices between approximately 2014 and 2018 , people were buying for purposes of flipping and hand over and that is 100 % fine . So , if you get advantage and you take it , and if you market perfectly then that ’ s great . By saying first time buyers should not just jump into the market , I ’ m cautioning them , I ’ m merely saying property isn ’ t a stock that is meant to do that , it isn ’ t meant to be at its lowest for long . If you get lucky at any point just do it , dig in . But one shouldn ’ t wait for a period where interests will be low , because it is not often that interests get this low in the property market . Buying now is the best option , because it is a bit cheaper to buy now .
I have never seen interest rates this low in about a decade , it ’ s never been where it is now . And maybe someone somewhere is asking themselves when is the right time to buy property , and trust me there is no better time to buy property than today . If you want to do a flip , buy some properties and sell them . If you want to make long term money , buy property . Property will always be a good investment if you buy a good quality product and you wait long enough . So , this is not a short-term plan but a long one . If you have a really portfolio on the stock market and the market tanks , property has the best value than any other asset class . It is particularly a good time to buy now because the interest rates are seating at 7 % and if you ’ re looking at Cape Town , the city has a stable seven and a half growth per annum on a 100-year average . That means if you borrow a 100 % bond you get a 50 % win . It is that simple on a long enough riser . The interest rates are not going to fly up , but even if they do by maybe one percent quarterly , you ’ re still going to be sitting at a reasonable interest rate in a year ’ s time . However , I can ’ t imagine it going up that quickly . If you look at what is happening at the economy , it doesn ’ t indicate that interest rates are going up , so it is a very good time to be buying .
2 OCTOBER / NOVEMBER 2020 SA Real Estate Investor Magazine