Advice from a property expert:  get into the market now even if you have to make substantial sacrifices

Another high profile figure in the Cape residential property sector – Lanice Steward, MD of Anne Porter Knight Frank – has urged Capetonians, particularly those who are young and, as yet, undecided about property ownership, to knuckle down, make the necessary sacrifices and get onto the property owning ladder now.

 “In our business,” said Steward, “we come across young, upwardly mobile people who tell us that they prefer to rent at discount rates in a good area rather than compromise with a less attractive home in a not-so-fashionable suburb. 

 “This philosophy, in my view, is short-sighted.  It is adopted, in most cases, by yuppies who earn good salaries, drive expensive cars and believe they have what it takes to “make it” in today’s commercial world – but the day will come when they rue their decision.  They will find themselves without a home of their own and condemned to annual rent increases in perpetuity.”

 Those who skimp and save to get together a deposit, buy a home and then work on it will find that every five to seven years they can upgrade at very little extra cost, said Steward.

 “We have clients living in Rondebosch or Constantia who ten years ago bought their first flat in Mowbray or Wynberg – and who are still paying roughly the same amount on their bonds because the profit on their sales enabled them to upgrade without greatly increased expenditure.”

 Asked if this would apply even in today’s market, Steward said that prices are now “wonderfully low” – but will increase within the next two to four years.

 “The current downswing will end – probably within a year.  Those who bought now will be grateful they did so.  It has to be remembered that, unlike most other forms of investment, a homeowner is making his profit on the bank’s money.  This means that the potential for increasing his asset is often greater than in a conventional investment where the full sum has to be paid upfront and the risk is often higher.”

 For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.