With the interest rate down by 50 basis points, and the economy set for improvement in the new year despite the set-back this quarter, it is a great time to buy property, says Samuel Seeff, chairman of the Seeff Property Group.
He said the property market outlook for 2025 is positive, and an anticipation of more interest rate cuts in the early part of the year if inflation remains below the Reserve Bank’s target range. The industry expects sales volumes to pick up, and prices to start rising.
According to the property expert, we have now had two years of flat trading and rising stock levels in many inland areas, especially those outside of the Western Cape.
These areas sit with fairly high stock levels, and have experienced low to no price growth over the last few years.
Prices in many instances are similar to what they were two years ago which means buyers can potentially get a good deal in the market. The lower interest rate has made home loans more affordable, and property more attainable, making it a good time to buy, said Seeff.
Buyers who wait until further interest rate cuts may risk having to buy at higher prices as Seeff expects the property market to rerate in 2025 which could see house prices rise faster.
He expects two scenarios to unfold.
The first would be those areas which have experienced subdued to almost no growth due to sluggish sales volumes, and are sitting with high stock levels, starting to see an increase in sales volumes.
Once properties start selling faster and there are fewer homes on the market, prices will finally start rising in those areas as buyers compete to get their hands on the property. In such a scenario, buyers who hesitate now and wait may end up having to pay higher prices.
Areas where there has still been reasonably good sales volumes and price growth such as the Western Cape in particular, will likely see even higher price growth of anything up to 15% to 20% next year.
In this scenario too, Seeff said, it makes sense to buy before the market tempo picks up further.
Ultimately, the precursor to doing well in property is to buy low. Nobody rings a bell and announces that the market is now favourable, but Seeff said we now have a rare opportunity to be able to call the market and spot a good time to buy.
We can now see that the market has bottomed out and is set to take the next upswing, the property expert said. Current market conditions enable buyers to purchase property at a low value given the flat price growth, especially in the inland areas, but also the Eastern Cape and parts of KZN.
The ability to buy at the bottom of the property cycle means you start on a good footing and can potentially benefit from long-term financial gains once the market recovers, and property values rise again, Seeff said.
There is good value to be had across most price bands, although Seeff said given that the sub-R1.5 million price bands tend to pick up first, entre level property buyers should get into the market while prices are still flat.
