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Panic-selling of property not advised experts
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EXPERTS urge homeowners to avoid panicselling following this week's cabinet reshuffle and the axing of the finance minister, events which may lead to economic instability "Panicselling is the worst thing that could happen at this stage. It would mean a flood of stock on to the market and a rapid fall off in prices, which would wipe out the equity many people have worked so hard to build up," says Berry Everitt, chief executive of the Chas Everitt International property group. "That would be counterproductive to what sellers might be trying to achieve... Just as with any other asset, the worst time to sell is when everyone is selling." Everitt's advice to homeowners is to "stay calm" and, if they are determined to sell, to plan their sale carefully. Samuel Seeff, chairman of the Seeff Property Group, agrees that "caution has to be the order of the day Since Monday, we have seen renewed instability creep into the economy, with the rand under pressure on the back of the recalling of Pravin Gordhan from the overseas investor roadshow. "Following Thursday night's announcement of a major cabinet reshuffle, we woke up to a rand in freefall and economists beginning to renew talk around a sovereign credit downgrade... "This will have an inevitable effect on the economy and property market. "Interest rates and costs will rise, more people will default on their home loans and fewer people will be able to buy houses, especially lower income earners. "It is a time of caution, and consumers, homeowners and buyers need to factor this into their decisions and household budgets." Lew Geffen, chairman of Lew Geffen Sotheby's International Realty, says panicselling is likely as "more skilled South Africans consider emigration". The rand's freefall is a "clear demonstration of international sentiment over (President Jacob) Zuma's decision, and corporate South Africa is likely to feel the same. "This will further stymie economic growth... There is no doubt that we are facing tough times ahead." Bruce Swain, head of Leapfrog Property Group, says the reshuffle is definitely the "most Panicselling of property not advised — experts BONNY FOURIE dramatic" since the president took office and is "worrying". "For homeowners, this might make things uncomfortable in the short term, but I urge them to remember that purchasing property is a longterm investment, and in 20 or 30 years time, their assets will still have increased in value, regardless of current political storms," Swain says. Steve CaradocDavies, principal of Harcourts Platinum, agrees, saying despite the uncertainty, many experts agree property remains one of the only stable investment vehicles. "The market has continued to show good growth through recent months of disorder. "With the rand showing its volatility and likely to take a beating, and similar repercussions on the stock markets, there are not many safe havens for investors. "Despite the economic volatility the property market has continued to show good growth, especially in the Cape Town metro... "We anticipate demand for property will continue to increase as investors identify it as the safest onshore investment vehicle, and this will ensure continued positive growth in property values," says CaradocDavies. Independent Property
Author: Lew Geffen Sotheby's International Realty