The latest 0, 5% rise in interest rates will ensure that property prices remain flat until the interest rate starts to drop. This was originally expected to be early next year; however the time frame has now been extended to the third quarter of 2009
My concern is that this latest hike is probably not the end. In retrospect it may have been better for us to have had a shorter period of sharper interest rate hikes. Although more painful it would have allowed us to adjust more quickly.
I am also concerned for first time home-buyers who are feeling that they are being locked out of the property market. Not only do new buyers need to pass muster with the National Credit Act, but banks have changed their lending criteria making it more difficult to raise home finance.
Not withstanding this, the fundamentals that make the property market turn are healthy, and now would be a good time for prospective buyers to look for a more affordable home, as long as they make sure they can afford their purchase.
Rather than remain out of the market and miss potential future opportunities purchasers should consider changing their expectations and looking for the best within a more affordable price range.
This may mean starting off with a bachelor flat, or opting for less bedrooms or changing one’s aspirations for a house and garden to a flat or duplex, and possibly reconsidering one’s area of choice.
If buyers look carefully and do some shopping around there is good value to be found in areas that will provide future growth.
If one wants to get into the Berea/Morningside/Glenwood and surrounding area it is possible to find bachelor flats from R300 000 and duplexes from R700 000.
In Redhill/Durban North we have a property at R750 000 and in Sunningdale close to La Lucia flats are priced from R620 000.
On the beachfront and Victoria Embankment flats are priced from R300 000 and the CBD from R250 000.
In Yellowwood Park houses start at R750 000; Woodlands flats from R450 000 and houses from R500 000, Woodhaven flats from R320 000 and houses from R650 000, while in Montclair flats are from R350 000 and houses from R700 000.
In Pinetown flats are priced from R400 000 and townhouses from R600 000; Queensburgh flats from R350 000 and townhouses from R550 000; Phoenix flats from R150 000 and houses from R450 000; Chatsworth houses from R550 000
South of Durban the Bluff has flats from R450 000 and houses from R700 000. In Amanzimtoti flats are priced from R450 000 and houses from R750 000. On the south coast Scottburgh and Pennington have flats priced from R500 000 and houses from R750 000; Margate flats are priced from R550 000, Ramsgate and Shelly Beach flats are from R650 000.
Inland in Pietermaritzburg flats are priced from R450 000 and in Howick from R660 000.
By Keith Wakefield
CEO of Wakefields Estate Agents