The tight conditions in the property market at the moment represent some good opportunities for investors with a medium- to long-term outlook.
That’s according to Jan Davel, managing director, RealNet estate agency group, who says all indications are that there will be a resumption of stronger value growth in the market within the next two to three years.
“In the meantime, buyers and investors who are intent on increasing their property portfolios will have a definite advantage if they make the most of the current lull.” He says higher interest rates are already making it more difficult for many prospective buyers to secure a bond, and that this added to slower economic growth spelling a drop in sales that favours investors.
There will also be more owners who find it difficult to keep up their mortgage payments and wish to sell quickly to relieve the financial pressure on their households, or in order to avoid foreclosure.
But those who are investing now should not be looking for short-term gains, Davel says. “Current investors should have the patience and resources to wait at least until the next upturn and, more importantly, to carry most of their bond and property operating costs themselves if necessary.
“The reason is that although rental properties are currently in high demand, actual rentals are unlikely to rise much over the next two to three years. Landlords who have found quality tenants will not want to risk losing them by raising rents too much when they know they are also struggling with higher food, transport and utility costs.”