2009/01/26

To buy or not to buy?

Whilst this seems the most obvious question for those in the property market, the question right now is how much longer buyers should wait out their decisions to purchase.

Seeff Properties chairman Samuel Seeff says Whereas high interest rates, depressed property prices and an oversupplied market shifted the bargaining power to the purchaser over the past year, indications are that interest rates will continue dropping and certainly decrease the buyers ability to negotiate prices.

Analysts anticipate an overall decrease of 2,5 to 3 basis points over the year.

He says the effect of this is that a homeowner repaying a R1m home loan over a 20-year period, would have been committed to R13,538.80 each month during the fourth quarter of 2008 when interest rates were 15,5%.

Should the interest rate reach 12%, that homeowners monthly repayment will decrease to R11,715.80.

Seef says with more buyers in the market, sellers can more selective and will be less likely to take the first offer that comes their way.

"Buyers may not have long to take advantage of the current economic situation. Given the expected interest rate drop in February, I would advise those in the market who have found their dream home, to go ahead and commit."

Property24