To sell or not to sell? That is the question:
Category Blog
Home owners who are not under pressure to sell should sit tight. If you don't need to sell, don't put your house on the market. That's my best advice to homeowners in current home market conditions.
Prices are the lowest I've seen in my 35 year career, taking into consideration the prices of other lifestyle items people spend money on. We've endured a long period of very slow property price appreciation. In real terms property has had negative growth since the 2008 Financial Crisis
Of course for every negative there is a positive! An excellent reason to sell would be to upgrade to a better, more expensive property. Upmarket properties have decreased in percentage terms more substantially than those in the lower sections of the market. Property is probably the best medium to long term investment that can be made in South Africa at the moment as it's coming off such a low base. The pendulum will swing and the more expensive properties will grow faster, in percentage terms, faster than those properties lower down the price spectrum..
On the other hand again, to sell with a view of achieving an optimistic, even reasonable, 'perceived' market price, in a 40% over supplied market, is foolhardy. A characteristic of the current property market is that almost every sale is concluded at a price of 'discomfort' to the seller. To sell now your home will be competing with properties that have been discounted and are offered at low prices because sellers have vital reasons to drop their asking prices, and get on with their plans.
For instance, they are either 'semigrating/emigrating, and have a narrow time frame, or they are under financial pressure because of South Africa's economic woes.
A positive indication
As the national annual price appreciation is come down to it's lowest in 15 years (.6% FNB Property Price Barometer) there is an increasing feeling that interest rates will stabilize and prices could start edging upwards in anticipation of changes in government (possible coalition at election time) and removal of our ' grey status'.
Another reason for selling that makes sense is that the capital that is invested in you property will grow faster in an investment portfolio as interest rates are high. You will be sidestepping the high monthly bond repayment you are currently paying... a further saving!
Author: Ronald Ennik
