Let’s face it, these are uncertain times. Who knows what will happen next week, next month, or next year. The global Coronavirus threat has sent stock markets plummeting. No one knows if and when the threat will be averted, or what the full impact will be on the global economy.
For most of us, we’ve never lived through times quite as uncertain as these. There is no rulebook that gives us the answers.
This is what we do know:
- Stock markets can lose 5-10% within a few days. Property markets are more resilient. Yes, there are ebbs and flows. But there is no question that the property markets are considerably more stable than the stock markets of the world – and that’s what history confirms.
- Property is a basic need that every human has. Everyone needs a roof to live under. Whether it’s property ownership or property rental – there will always be demand. It’s hard to make the same argument for stocks and shares.
- Despite the global economic challenges, banks are still keen to provide home loan finance. As long as you have a reasonable deposit, the banks have a strong appetite to offer finance.
- Interest rates are extremely attractive – as low as they have been for many years. That means that the cost to service debt is lower than it has been for decades.
- The transfer duty threshold has been adjusted in the latest budget speech, making it more attractive to purchase property as the acquisition costs are lower.
In isolation, the above facts may not sway you. But when you consider them together, they offer a compelling reason to invest in real estate. There is a measure of certainty that property investment offers that other investments generally can’t offer. It goes without saying that not all real estate has the same attraction. Discernment is required. Compare values. Research areas. Understand rental demand and returns. Shop by comparison. Not all real estate is created equal.
Historically, when you consider who has benefited most from property investment, it’s been those who’ve invested in property before there is a rush that drives prices upwards. It’s all about timing.
Today we have a situation where most forms of investment present considerable risk. Real estate, however, would appear to be the smart bet. Demand is high, acquisition and finance costs are as low as they’ve been for many years, and genuine sellers are prepared to listen to the market.
So, if you’re looking for an investment there is a compelling argument for an investment in real estate. A measured approach is always wise in times of uncertainty. Don’t overextend yourself and always allow for a potential increase in interest rates. When you budget properly and allow room for safety, you place yourself in a great position to capitalize on the opportunity and minimize your risk.
In challenging times the calm mind sees the opportunities and makes the smart decisions. Stay healthy and keep safe.
– Morne Prinsloo | 079 047 5172
Call me for an obligation free valuation of your property in the following areas: All of Krugersdorp including Pinehaven, Featherbrooke, Strekfontein, Honingklip, and Oaktree.
Roodepoort areas include Radiokop, Allen’s Nek, Strubensvalley, Little Falls, Honeydew Ridge, Honeydew Manor, Wilgeheuwel, Ruimsig, Willowbrook, Amarosa, Poortview, Tres Jolie, Helderkruin, Roodekrans, Wilropark and Surrounding Areas.