Property buyers should not bet on further rate cuts before they buy property, says Samuel Seeff, chairman of the Seeff Property Group. The potential rate cuts are not on hold, as the conflict in the Middle East has put pressure on oil prices, creating a serious inflation risk.
 
While we continue to advocate for the Reserve Bank to hold rates steady (rather than hiking them) and to stay on course for further rate cuts, the reality is that these are now likely to be delayed.
 
The best time to buy is always now, and buyers should not hesitate. A delay could mean they miss a favourable window of opportunity. He says that while the Cape property market currently favours sellers, it remains particularly favourable for buyers elsewhere due to the slow demand and flat price growth.
 
This is especially prevalent in the main metro areas where prices have grown very little over the last five years. Gauteng, in particular, is offering outstanding value for buyers to take advantage of now, while prices are flat.
 
The reality of the current market is that interest rates are at a multi-year low, and buyers should take advantage. One of the most compelling reasons to act now rather than wait is the favourable mortgage lending conditions, which are particularly favourable for buyers right now.
 
Banks are showing a strong appetite for lending, offering low deposit requirements and even rate concessions, something which was quite unheard of five years ago, says Seeff. There is brisk competition among banks for home loans, providing an ideal window of opportunity that may not last forever.
 
Given the current risks, buyers should ensure they buy within their means, especially first-time buyers on a tight budget. You need to be sure you can absorb any interest-rate fluctuations so that your home remains affordable even if the market shifts.
 
A favourable market for buyers also means they have a little more bargaining power, but this will, of course, be area and price-band-dependent. On the other hand, by waiting for a further rate cut, buyers are likely to face more competition in the market and may end up paying a higher price for the property.
 
If you can afford the home now and have a stable income, it is generally better to buy now while you can secure a good price. By the time rates drop, property prices may already have begun to climb, erasing any potential savings. You will, in any event, benefit from any future rate cuts as your monthly home loan repayment will come down, concludes Seeff.