Polokwane real estate expert gives property insights

POLOKWANE – The year is at its end and many readers have to relocate due to a changed working situation, studies or various other reasons.

Relocation always raises the question of whether renting or buying a property is the correct decision so the Polokwane Observer gathered insight from Floris de Kock, a local real estate specialist and principal of Baobab Properties.

“Property is always the biggest investment a single person makes in his or her lifetime and in the aftermath of Covid 19, property prices have soared due to demand and a shortage of properties for sale. Banks also have increased their appetite with lucrative interest rates and 100% plus loans offered to first-time buyers,” De Kock reckons and adds that buyers should always consider the added costs of transfer of the property into the new owner’s name, maintenance costs, levies and of course, municipal rates and taxes.

“Economists predict that interest rates will come down in the foreseeable future. Some economists say that if inflation keeps going down rates will be the same as pre-Covid which were at 9%. That means that the biggest expense you will have as owner will be the mortgage bond to be paid to the bank on a monthly basis and with interest rates coming down bond repayments will also drop,” De Kock explains.

According to De Kock, a factor that has also resulted in rising property prices, is the moratorium that was placed by the municipality on developments. However, that was lifted by the council, which means more properties will come into the market to buy. This will stabilise prices due to more supply of properties.

“With the demand for housing escalating, the demand for rental properties also escalates. For clients that don’t want to commit to buying property renting is a solution. Unfortunately, with this there are also some negative factors tenants need to look at. The positive side is that the monthly expenses a tenant has are only the rent, water and electricity costs and minimal maintenance costs as agreed to in a rental contract. Also, you are not bound to a 20-year payment plan on the property, but rather a six-month to a year contract.

The other negative factor is that if you want to buy and you wait too long you have outpriced yourself and then you cannot afford to buy the property of your desire.”

“Every two months consumers wait with bated breath on what the Reserve Bank will decide on interest rates. Lower interest rates mean lower payments on debts. Struggling consumers want the best accommodation at the best price. With current property prices versus rental prices, it is cheaper to rent than to buy. However, with interest rates coming down the picture will change and it may even become a wiser choice to invest in a property of your own,” De Kock says.

There are many pitfalls in buying or renting a property and prospective buyers and tenants are strongly advised to engage the services of a reputable real estate specialist when buying or renting. “You can save a lot of money by taking an informed decision and ensure that all legal requirements are covered,” De Kock advises.