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Is now a good time to sell and buy?

The short answer to the question is: YES! And the chances are that if you’re asking this question, your circumstances have changed or are about to change. Perhaps these are changing with an imminent new arrival, or the imminent departure of the now “not-so-new” arrivals, and you’re looking at making long-term decisions regarding your future home,” says Justin Marshall, Principal of Leapfrog in Woodstock.

There is a definite benefit to those thinking of selling in a slowing market, particularly for those looking to buy up in price. “This is because higher priced properties tend to give up more in price terms than those that are priced closer to, or lower than the median house price, which ABSA currently puts at approximately R900, 000. In addition, one only has to take a glance at the property press to realise that there is still very strong demand below the median house price figure which results in properties in the R700 000 – R900 000 bracket holding their value. This in effect closes the gap between the selling price of the original property, and the purchase price of the new property. Put simply, you may get more for your money than you might have had the market been more buoyant,” explains Justin.

“Slowing price growth is providing an additional benefit to those looking to sell and buy up. When price growth is rampant, as has been the case in the last few years with annual growth in excess of 30%, the six month period between selling your home and finding your new home, has meant the buying power of money in your pocket has been eroded by as much as 15%. With annual price growth now in the region of 8-12%, buyers can afford to take their time without fear of being left unable to afford their ideal home six months down the line,” he adds.

The window of opportunity however is relatively small, if recent comments by FNB economist John Loos are to be believed. “His forecast is that the current down-swing will last into the second half of 2008, at which point the housing market is forecast to return to more robust growth. This is good news for those that take advantage of this opportunity, as having bought at depressed upper prices; they are in-line to experience above average capital growth as the market swings back. Once again it’s back to the basics, provided you sell and buy in the same market, you can’t go far wrong,” concludes Justin