SLOW DOWN IN PROPERTY PRICES AND SALES DUE TO INTEREST RATE HIKES…
Property Markets in South Africa are expected to slow down due to interest rate hikes of between 1.5% and 3% expected for 2016.
Interest rate hikes are going to have a negative impact on the affordability of purchasers, further impact will be felt through the deteriorating economy which will reduce salary increases and job opportunities, this impact will spill over into the market and slow activity of Buying and Selling.
Reduced affordability by first-time buyers and higher interest rates reducing the affordability of existing Home-owners are likely to translate into more activity in the lower end of the market as downscaling becomes evident. More affordable markets in the property buying pyramid are likely to continue to perform at reasonable levels while a slow-down in the higher end results. However the falling rand value will make the South African market attractive to foreign buyers in the high end market if investment confidence levels of these purchasers can be maintained.
Adequate supply of property has been a prevailing problem in 2015 and the market generally favoured the seller, during the later part of this year this could see a reverse as financial constraints affect existing home-owners decision to sell. As supply increases above the level of demand the market would shift in favour of the Purchasers. In a Buyers market existing home-owners will need to prepare their homes to optimal levels and become more realistic as to the market value of their home in order to get it sold in a reasonable time period. With affordability driving decisions purchasers are definitely going to become more price conscious which relates to them buying with the head and not the heart. Overpriced homes struggle to sell in these markets and it will be imperative for sellers to get the price they are asking correct from the start.
Fps Properties offer a wide range of services to Buyers and Sellers. Our technologically advanced, market related valuations are free of charge and provide sellers an opportunity to make informed decisions when considering the sale of their property. If you are considering Selling your home contact one of our agents to receive a service tailored to your specific needs.