BUYING OR SELLING? Current economic and market trends you should consider.

The South African Reserve Bank has delivered ten back-to-back rate hikes since 2021, a total of 475 basis points, and economists expect another hike to be announced this month. Despite the good news that our economy actually grew by 0,4% in the first quarter of the year, the consumer and homeowners continue to feel the brunt of high living expenses.

According to FNB, 17% of sales volumes over the past 6 months were financial-pressure-induced sales, and the prevalence of downscaling is 18%. It seems therefore that homeowners sell their homes to keep afloat.

Sellers that are faced with this challenge should first analyse their situation very carefully and consider alternative methods of either increasing their income or seeking advice from their financial institution regarding alternatives.

Sellers must also take into consideration the cost of selling their home, like compliance certificates, advance payment of rates, taxes, and levies, as well as the agent's professional fees. If the house was bought in the past 2-3 years, it is unlikely that a profit will be yielded. The House Price Growth is expected to slow to roughly 2% this year.

It is therefore important for a seller to take the advice from his property professional and carefully consider a market-related price based on a properly researched and compiled comparative market analysis showing those houses his house will be competing with to catch the buyer's attention.

Buyers, on the other hand, must not be tempted to accept 100% or even higher mortgage rates currently being offered. Although the expectation is that the interest rate is close to having reached its peak, there is no guarantee. Rather pay a deposit, and also calculate the bond repayment at a higher rate and see if that will still be affordable.

Buyers with a good credit record and sound financial acumen should make use of the current favourable mortgage lending conditions, secure a better interest rate, and get their foot in the property market as growth will return soon.

Buyers can now benefit greatly because there are more properties on the market to choose from and sellers are open to negotiation as it takes longer to sell.

Whether you are selling or buying a new home, consider the pros and cons carefully before taking the leap.