In the current economic environment, you may find that the property comes within the price range of more buyers, but there are also a number of factors that one needs to consider.
Figuring out the best time to purchase a property is a subjective matter. You need to know the price that you are comfortable with committing to and to also look at your intention for buying a property. Some people are in the market to buy a family home and others are looking for investment properties. This is the first step in assessing what a fair value offer would be on the property that you are looking at.
When a property valuation is conducted, these are often guided by what other properties that are similar sold for in more recent times. The final price is obviously determined by what the buyer will be willing to pay and what the seller will accept.
When you find a property that you would like to purchase, you will need to assess what impact the Covid-19 pandemic would have on the seller as well as the property market in your area in general.
In the past 18 months, the property prices have fallen substantially. You will need to evaluate if your offer represents a value that is close to the bottom end of what the seller could reasonably expect to receive for the property. One thing to note, is if the lockdown causes further declines in the market, the seller may reach a purchase price below what they are willing to accept, or alternatively cannot afford to accept.
For people intending on purchasing a property to be their family home, there are many factors that can influence the value according to you.
The following factors can play a role in the value:
- Is the property located close to school catchment areas.
- Is the property larger than your current home, or does it have the potential to be extended?
- Is the property located in an area that you aspire to live in? (Close to sports clubs, transport hubs, shopping centres, etc.)
There are always unique selling points to the purchaser because a property can serve to enhance your lifestyle, and so much more that you cannot attach a rand value to. In saying this, a homeowner buyer is always willing to pay a slightly higher premium as opposed to a property investor.
There is a huge factor of increased competition that needs to be taken into account.
Due to the extended lockdown, the value of the property that you are looking at may fall in the near future. This means that there will be increased competition for the specific property. There will be more competition because the property will be at a lower price, which will then fall into the price range of more buyers. This could affect your chances of acquiring the property. Another factor playing a role in this is the interest rate cuts on bonds since the beginning of 2020 may also increase the affordability for many buyers who were previously excluded from that particular price range.
If you are currently renting a property and would like to see the effect of the lockdown and see if there is a possible price reduction.You may want to calculate the additional months of rent will cost you while you lookout for the effect of the lockdown on property prices. This will be the calculated risk that you would need to take into account.
Unfortunately, we do not know if the property market will continue to be depressed or if it will thrive as a result of the interest rate cuts.
These are things that you may want to look at. Right now has never been a better time to purchase your property.