What should you do when the property market is flat? It’s a question many people are asking and, as is often the case, there is not a single – or simple – answer. If you own a property, should you hang on to what you have? Or should you take the opportunity to scale up or down, depending on your finances and future plans? Alternatively, if you’re renting, should you take the plunge and purchase a property, or rather adopt a ‘wait and see’ approach?
The short answer is, it depends. Everyone’s financial situation, life goals and general aspirations are different, and it’s not possible to give a one-size-fits-all answer. In this instance, it’s probably wise to decide what your aims are – generally, financially and specifically in terms of property – and bring out the old pros and cons list. You want to get a good idea of where you are now and where you’d like to be, so you have something to base your decisions on.
Factors to consider
The property market is cyclical, so while it’s true that current rental yields and selling prices are not as robust as they used to be, this could be a good time to buy. Always take affordability into consideration, however, so that you don’t overcommit and find yourself in a tough spot financially. It’s generally safe to assume that expenses like living costs will continue to rise, so ensure that you have always have money in reserve instead of going all-in.
Also, remember that property is best viewed as a long-term investment. Yes, there are people who speculate – and are able to buy and sell on a whim – but they make up a small minority. Conventional wisdom is that property is best viewed in two ways: 1) It’s not about short-term gains, it’s about staying in it for the long haul. 2) It remains a solid investment vehicle and a good addition to any personal financial portfolio.
At One on Whiteley, we’re seeing better returns on furnished apartments, so it’s worth considering furnishing or semi-furnishing your property in order to drive better yields.
If you’re thinking of buying, proceed with care and caution – choosing a good location, buying from a reputable seller or developer, and making sure you can afford not only the purchase price but also the additional costs. It’s vital that you take into account the running costs of owning a property, as this is often where homeowners come unstuck financially. These expenses are not insignificant and include transfer duty, VAT, rates and taxes, levies, regular maintenance and repairs, property insurance, home contents insurance, life insurance to cover your bond, and more.
Purchasing property at One on Whiteley offers all the benefits of modern living, as well as the extended benefits of living in Melrose Arch – South Africa’s safest open precinct – and all the amenities that it offers.