The potential of property

Market conditions have opened up many opportunities for young first-time buyers, however, it is still important for buyers to follow certain guidelines in order to see the best return on their property investments, says Adrian Goslett, the CEO of RE/MAX of Southern Africa.

He notes that the sooner young buyers are able to get their foot into the property ownership door the better, provided of course that it is done in the correct manner. Rushing into a decision and purchasing a property without completing the necessary research or seeking the advice of an experienced property professional could prove costly down the line.

According to Goslett, regardless of the buyer’s age or the market they find themselves in, it is always important that they find the right property that fulfils their criteria. He says that younger consumers tend to look for property that is close to amenities such as restaurants, entertainment nodes or shopping malls because they are generally far more socially active than their older counterparts. “Most young buyers will opt for sectional title apartments due to the fact that they are normally less expensive than freestanding home and require less maintenance. These kinds of properties also offer the additional benefit of security.”

He says that aspects that buyers need to consider when looking for property that suits their needs and is likely to be a good long term investment are most importantly location, security features and lastly price.

“There is no doubt that there has never been a better time to invest in property. The last time that interest rate level was this low was over 30 years ago. This, coupled with current property pricing makes it the ideal time to purchase a home.  Even if property doesn’t appreciate in value over the short to medium term, it will definitely outstrip most other investment vehicles over the long term and provide a solid foundation for wealth creation,” says Goslett.

Although many young consumers are more interested in buying expensive cars and the latest electronic gadgets, Goslett says that these items will only lose value the older they get. Property will largely retain its value and if not appreciate in the years to come, provided that buyers have done their research thoroughly. Young executives or graduates that have some money saved up for a deposit would be wise to use that money to invest in property while the market is ripe with opportunity. “The recession period may have made many hesitate to purchase property, however, the pros to owning property will always far outweigh the benefits of buying other big ticket items that are likely to depreciate in value,” he says.

According to Goslett, there are a number of reasons to take the step forward to home ownership, such as:

•       Paying off your own bond and not someone else’s
•       No need to always be moving because the lease has run out
•       Renovating, modifying or decorating to your own taste
•       Money spent on renovation or upgrades can be largely recouped on sale
•       Having a say in how the scheme is run in a sectional title complex
•       No annual rent increases

“Many young buyers might be considering waiting to buy property when they are in a different life stage or ready to settle down, but waiting it out could mean losing out on the buyer’s market we are experiencing at the moment. Some regions are already experiencing a shock shortage as demand for property increases. If buyers continue to hang back the market could turn before they invest and this dream could drift further out of reach at a later stage,” Goslett concludes.

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