Mixed market the ‘chance of a lifetime’ for young buyers

So says Clarry Lesch, owner of the local Lew Geffen Sotheby’s International Realty franchise, who notes: “The Port Elizabeth market is a tale of mixed fortunes at the moment and this is creating many exceptional opportunities for homebuyers.

“For example, many existing homeowners here are very keen to downscale their lifestyles in order to curb expenditure or reduce debt, and they are increasingly inclined to negotiate their asking price and even to accept less than they paid for their property (especially if they bought in 2007 or 2008) just to be rid of it and free to get their own finances on track.

“Consequently, this is a very good time for first-time buyers to be looking for ‘bargains’. Indeed, if they can put down a good deposit now, they may well find that their monthly bond repayment would be the same or even less than what they are currently paying in rent.”

In addition, she says, there are still many distressed properties coming on to the market as their owners deal with the ‘second wave’ of financial problems following the recession, “and we expect this to continue for the next 18 to 24 months, which we believe will be an exceptional window of opportunity for prospective buyers to accumulate deposits and acquire homes of their own”.

After that, Lesch says, the surplus supply of homes on the market will pretty much have been absorbed and prices will be under upward pressure once more. “Interest rates will likely also be higher by then and it will be more difficult for young people to qualify for loans, even if they do have deposits.

“In short, it is likely to be a very long time before young prospective buyers will again experience the extremely favourable combination of buying conditions that currently prevail, and they should do their utmost to take advantage of them.”

Meanwhile she says, the rental market in Port Elizabeth is enjoying unprecedented strength, with high demand and a shortage of stock that does not seem set to be relieved any time soon because there are virtually no new rental units being developed.

“Vacancy levels are thus extremely low and with interest rates at their current lows, rentals now quite often cover and even exceed the landlord’s monthly bond repayments on rental properties. This is obviously good news for property investors – and for existing homeowners who are able to convert part of their home or build on a flat or two that they can let out to help cover their own expenses.”

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