While the downgrades are very serious and will have inevitable knock-on effects across the economy and property market, it is important to remember that any economy and property market goes through cycles.
The key therefore, says Steve van Wyk, managing director of Seeff Centurion, is to remember that property is not a short-term, but rather a long-term investment. For most buyers, it is about securing a roof over their heads and rather than be scared of the economic fall-out, speak to a credible estate agent in the area who has been in the industry for a long time and has experienced the cycles and fluctuations.
When the economy takes a downturn, demand tends to dip and sellers then need to be more conservative with their prices, but, he adds, this is often an excellent time to buy. With interest rate hikes looming, you can also still benefit from an interest rate saving and secure a bigger bond.
“In some areas, the market is flooded with properties and buyers have more of bargaining power and can pick up a good property much cheaper. Regardless of the economy, there are opportunities in every market”, he says.
Gerhard van der Linde, MD for Seeff Pretoria East agrees that it is still a good time to get into the market in the Pretoria East area. It is almost always a good time to invest in property, but the ability to yield good capital gain will take time, he says. Over the past 40 years, property values have shown great positive nominal increases with statistics showing only three periods of decline over this entire period.
“Price growth has flattened over the last eighteen months, so you are able to find good value and Pretoria East is currently an investment hot spot. Do your homework though and build in some fat into your budget to ensure you can withstand cost increases”, he concludes.