The anticipation was palpable. Across South Africa, homeowners, potential buyers and property professionals, alike, all held their breath waiting for the news of an interest rate cut. Yet, the announcement came and went and the rate remained unchanged, leaving many feeling hopeless and deflated.
According to Roger Lotz, franchisee of the Rawson Properties Helderberg Group, however, all is far from lost.
“Realistically, interest rates are coming down. It’s just a matter of when,” he says. “The latest predictions suggest that we’ll see a cut in September and possibly November as well. In the meantime, there are still plenty of opportunities on the property market for those willing to put in the effort, stay focussed, remain positive, and work the strategic angle.”
The Current Landscape
It’s no secret that the market is feeling the strain. Lotz says, “We’re seeing a significant increase in properties listed in the higher price ranges and a surge in rental demand as many struggle to keep up with their bond payments.”
This trend is echoed in the prolonged average listing times, with homes now spending an average of 92 days on the market – a stark increase from 69 days in 2015.
First-time buyers, in particular, are feeling the pinch, with affordability dropping on what feels like a daily basis.
“Affordability issues have affected demand across the board, and we’ve also seen a notable rise in distressed properties as existing homeowners fall behind on bond repayments,” says Lotz
Strategic moves for buyers and investors
The current market conditions might seem discouraging, but Lotz says there are a number of strategic moves that buyers and investors can make to position themselves advantageously for the future.
- Stay informed and ready
“Don’t wait for the perfect opportunity to come to you,” he says. “Stay informed and get prequalified so that you’re ready to act quickly when the right property comes along.” - Consider joint bonds
For those struggling to meet bond requirements alone, Lotz says joint bonds are an increasingly popular option.
“Co-owning property with friends, family, or partners can maximize your buying potential and share the responsibilities of maintenance, laying a solid foundation for a future property portfolio,” he says. “Just make sure you have rock-solid contracts in place to protect your interests in the event of future disagreements. No matter how much you trust your coowners, always get the nitty gritty locked down in black and white.” - Focus on rentals
While property sales may be sluggish in some areas, Lotz says the rental market continues to show promise, with tenant payment behaviour remarkably strong given the financial pressure on most South African households. “The rental market often benefits when high interest rates make it difficult for tenants to transition to first time buyers,” he says. “This trend may shift as interest rates start to decline, but we don’t expect a drastic effect on rental demand – particularly in popular areas like here in the Helderberg. In general, the rental outlook is very positive, and we expect to see good growth in the near future.” In the meantime, Lotz advises landlords to minimise risk and focus on improving long-term
growth potential. “Prioritise the placement and retention of quality tenants, and set time and budget aside to
stay on top of maintenance and improvements that will protect your rental asset’s value in
the long run,” he says.
Looking ahead
“There’s no denying that market conditions have been tough, but they won’t last forever,” says Lotz. “Those who make smart, informed decisions now will be well-placed to take full advantage of the upswing when it arrives.”
Lotz says his agents are putting all of their expertise, creativity and strategic skill behind their clients to ensure they are well-prepared for the future.
“We didn’t get the interest rate cut we were hoping for, but we know it’s on the way, and we have our clients backs to ensure they emerge from these challenging times stronger than ever and ready to flourish.”
