The world today moves as fast as lightning. If a homeowner stays in the same place for 50 years, they may find themselves one day wondering: ‘who moved my house?’ The home is exactly the same; however, life around it has changed. The increasing level of transformation in the world of business has had its substantial effects on society.
Property consistently made the news headlines in the past several years. Never before was the word ‘property’ packaged in so many formats, nor had it ever competed so powerfully on the catwalk of investments.
What's more, just to make sure that property really has made its mark on today’s young generation, the National Credit Act, combined with factors such as rising interest rates and fuel prices, is about to teach South Africa’s ‘techno-generation’ a few old golden rules. The wizardry of those golden rules is remarkable if one analyses the success of developers who sold plots of land during the ‘boom’ and compare the figures with the amount of plots for sale when the market turns.
The key rule to remember is that when everyone in a development buys the plots as a short term investment, all the plots will come on the market again – and usually at the same time. This makes it difficult to make a profit.
Furthermore, it is not the type of investment which you can sell quickly if you need to use your money for something else. Property owners, who bought an empty plot during the past few years, need to listen to the experts that tell them that property is a long term investment. That is most often the case in land sales.
Of course, experts who keep saying that property is a long term investment are not correct in all instances. Factors, such as crime can have a detrimental affect on a suburb and the property values of such an area. In such cases, landowners need to recognise the signs and get out sooner rather than later.
The opposite is observed in places where property values have gone through the roof. Here it is deemed better to get in earlier rather than later. Plettenberg Bay, the V & A Waterfront and the Atlantic Seaboard are just a few ‘pockets’ where although the market is slower, property values have been sustained.
The moral of the story is to understand the ‘move’ regarding property. Either a person should move before the value of the property shifts up or down, or the value of the property will in any case be determined by factors outside the owner’s control.
The latest security lockdown question published in the media: “Do I stay or do I go” has prompted ‘the move action’ again. While many have made the decision to go, it seems that the one ‘penny’ that refuses to drop is the fact that the value of the property they want to sell is now not fitting in with the budget that was compiled in 2007.
Many will simply not move, and some might find themselves asking a year or more later: “Who moved my house?”
Linda Erasmus, CEO of Fine & Country South Africa