Preparations for when market conditions change
House price growth has been dampened for some time due to broader economic factors. Once the interest rate-cutting cycle begins, we might experience a quick turnaround within the local housing market.“Being prepared for this swing can help buyers and sellers snatch up the opportunities before it's too late,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
For those unsure how to prepare for the possibility of changing market conditions, RE/MAX of Southern Africa shares some advice for buyers and sellers.
1) Get your finances together
Once interest rates come down, the market is likely to become more competitive slowly over time for buyers. It is advisable to get in early before house prices begin to climb. Save up for the upfront costs like transfer duty and bond registration fees. Get a pre-approval certificate to prove that you are a serious buyer. For sellers, once market activity begins to tick up, you want to be ready to sell. This means having enough cash saved to cover the related expenses (e.g. compliance inspections and certificates, rates clearance costs, etc.).
2) Partner with an estate agent
The best way to stay informed as and when market conditions change is to develop a working relationship with a real estate agent. Take the time before conditions change to set up appointments with a few real estate agents to find somebody with whom you connect. It’s a real estate agent’s job to know what’s happening in the real estate market, so lean into them as a valuable source of information.
When interest rates come down, try to keep your repayments the same as before to pay off your debts faster and reduce interest charges. If you can afford to pay off any debts before interest rates come down, this will also help you to qualify for a better rate on your home loan. Try and pay off the debts with the highest interest rate charges first, which will typically be things like car loans or personal loans.
While the property market remains hopeful that conditions will soon become more favourable overall, Goslett mentions that even in the current conditions, the property market is by no means inactive, especially for those who work with a reputable brand like RE/MAX.