Time to consider purchasing property in South Africa

I know at a time like this it sounds crazy purchasing property in South Africa? At a time when prices are falling rapidly, the economy is struggling and many economists are quietly softening their previous estimates of recovery. Ladies and gentlemen it may be a shocker but yes it is time to consider purchasing property in South Africa.
So why would you consider purchasing property? The truth is that that we are finally seeing realistic prices returning to the property market. Now one doesn’t have to pay a presidents random to buy a home in a good location here in South Africa.
Think about it the rates of decline reported are understating the extent at which prices are falling, while ignoring how a strong buyer can negotiate a discount onto a seller. Consider that since 70% of home loan applications are being rejected by banks currently therefore fewer buyers in the market and that per Economics means decline in market demand causes market prices to fall.

Buyers

Individual Buyers are now thinking differently & entering the market with a different approach which is just wonderful especially for them. Gone are the days of talking about how much capital appreciation yesterday’s buyers were looking forward to getting for their property in however many years, how they repeated that property can only go up, how you’d better get in now or you’ll miss out and be cursed forever. Instead the logic for individuals now buying is, people want to buy a place to enjoy living in it. If people are going to buy a property as an investment they’re after those increasingly juicy rental yields, which is far stronger justification for investing rather than living on the prayer of impossible rates of capital gain, thoughts & prayers like that certainly belong in the dark ages.
True, the property prices declines of 10% a year still seem bland when compared against the huge 40% increases in previous years and many still feel shut out.
It’s admittedly hard to judge just when the market will bottom out, let alone return to positive growth: especially seeing how the economists who were closest to calling the market correctly were actually those who didn’t try calling it at all. So declines and below-inflation growth may be the norm for years to come, but despite that individuals are committed to buying and the justification goes back to the reason why as individuals one would buy a property in the first place – namely to live in it keeping in mind that the strength buyers enjoy now will also not last forever.

In Conclusion

Yes, property itself remains a good investment in the long term for individuals provided it’s in the right location, they’re not buying at the peak of a bubble and they’re not leveraging themselves to the limit on a property they can’t afford without any support against potential financial shocks. Many did just that and there are some still hoping for the prices to quickly return to what they paid at the peak of the bubble. That may take a while longer than they’d like unless there is the addition of some considerably unpleasant inflation into the economy, which would ultimately be unpleasant for everyone.