House price growth has been dampened for some time now owing to broader economic factors. Once the interest rate cutting cycle begins, it is possible that we might experience a quick turnaround within the local housing market.
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“Being prepared for this swing can help both buyers and sellers snatch up the opportunities before it's too late,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
For those who are not sure how to prepare for the possibility of changing market conditions, RE/MAX of Southern Africa shares some advice for both buyers and sellers.
1) Get your finances together
Once interest rates come down, the market is likely to become more competitive slowly over time for buyers. It is advisable to get in early before house prices begin to climb. Save up for the upfront costs like transfer duty and bond registration fees. Get a pre-approval certificate to prove that you are a serious buyer. For sellers, once market activity begins to tick up, you want to be ready to sell. This means having enough cash saved to cover the related expenses (e.g. compliance inspections and certificates, rates clearance costs, etc.).
2) Partner with an estate agent
The best way to stay informed as and when market conditions change is to develop a working relationship with a real estate agent. Take the time before conditions change to set up appointments with a few real estate agents to find somebody with whom you connect. It’s a real estate agent’s job to know what’s happening in the real estate market, so lean into them as a valuable source of information.
3) Manage debts
When interest rates come down, try to keep your repayments the same as before to pay off your debts faster and reduce interest charges. If you can afford to pay off any debts before interest rates come down, this will also help you to qualify for a better rate on your home loan. Try and pay off the debts with the highest interest rate charges first, which will typically be things like car loans or personal loans.
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Pam Naidu, Director of Sales and Marketing at Devmco Realty, shared some key learnings, in an article published on 11 May 2023, which every first-time buyer should know when deciding to purchase their dream home.
1. Location, location, location! Also known as the Three L’s:
There are three micro locations that define the actual location of a property on a macro level. If the property you want to purchase is in an estate for example, you may want to find out what area of the estate it sits in and what that actual area provides, such as a good sea views, etc.
2. Financial stability is important:
Get your credit card payments and debts in order.
3. Budget:
Establish a realistic budget to determine your affordability. Create a budget and try to stick to it so that you can enjoy the process and not put yourself under too much pressure.
4. Find a trustworthy real estate agent:
This is the person that will assist in picking out your potential home and exploring your new neighborhood and is also responsible for scheduling tours and negotiating important contracts on your behalf. Ensure that this is someone you trust, to have your best interests at heart.
5. Get approved:
Get a pre-approval letter before you start shopping! This will help you have realistic expectations on what you can afford.
6. Be mindful of transfer and closing costs:
First time buyers usually tend not to factor these costs in, and it comes as a huge surprise at the end. Doing your homework is a very vital part of house hunting.
Becoming a first-time homeowner can be an overwhelming experience and requires careful consideration of several factors. With the expert advice from Devmco Realty, first-time home buyers can make an informed decision and successfully unlock the door to their dream home.
Read: First-time homebuyers' fears - how to overcome them
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