The question of a "bubble" or "boom" is still bandied about regularly, despite strong indicators from reliable industry sources that the property market is definitely not a bubble about to pop.
In terms of whether the market is a boom or a bubble, Ian Slot, national and regional committee chair of Seeff Properties, has the following advice on how to survive - and be able to sleep at night - when engaged in the property market. "My first response to people who ask me whether the market is a boom or a bubble is, 'Why do you want to know?'.
In other words, it all depends on which angle you are looking at the market from. If your property is your primary home and it is going up in price, that's great. If it goes down, you will have to sell for less - but then you can also buy for less," said Slot. "If you are concerned about getting into the market for the first time, or you are an investor and you are concerned that the market might be a bubble and might be slowing - my sense is that it still has a way to go, and those doing empirical research, such as Absa, all say the same thing.
"The bottom line is to buy within your means. Then you will be a strong property holder and able to afford it in good times and bad," said Slot. "Say the market is a bubble, and you buy for R1 million and the property is now worth only R500 000. If you are a strong holder it won't matter - in fact, you should buy another property at R500 000! It all comes down to the question of whether you can hold on in the long-term - this will ensure that you can sleep at night, and long-term the market will make an astute investor out of you." In terms of the market today Slot said: "The volume of units being sold might come down, but the prices are certainly holding. "Prices are still strong because people can afford to wait to get their asking prices and the demand is still there."
This article was originally published on page 7 of The Cape Argus on July 10, 2004
Publisher: The Argus
Source: The Argus
The question of a "bubble" or "boom" is still bandied about regularly
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