Should you buy property when interest rates are high?
Following the recent interest rate hike, many prospective buyers might be hesitant to enter the property market. However, REMAX Southern Africa explains why affordability and long-term goals should take precedence over trying to time the market.
While buying a home is a decision that should be approached carefully and with thorough planning, it is also important not to get stuck in the research phase.
Adrian Goslett, CEO and Regional Director of REMAX Southern Africa, advises buyers not to wait for what they perceive as the “perfect time” to purchase property, such as when interest rates are at their lowest – because nobody actually knows when that is. Instead, he encourages buyers to focus on whether the purchase aligns with their financial situation and long-term goals.
“Although interest rates undoubtedly play an important role in determining affordability, they should not be the sole deciding factor when it comes to entering the property market. Buyers who postpone their purchase in the hope of securing a slightly lower interest rate may find themselves facing higher property prices or increased competition when market confidence returns,” Goslett explains.
One of the advantages of purchasing property during periods of cautious market sentiment is that there is often less competition. With fewer active buyers in the market, sellers may be more willing to negotiate on price, resulting in opportunities that may become less common once demand strengthens.
“When you buy a home, the benefits extend beyond just getting a good interest rate. Buying sooner rather than later means that you can start building equity in your property and benefit from potential growth in its value over time. It also helps you avoid paying higher rent as rental prices continue to rise,” says Goslett.
“The right time to buy property is when you are financially ready for it and have found a property that meets both your needs and your budget. As market conditions are dynamic, trying to perfectly time the interest rate cycle is a challenging task, and buyers are generally better served by focusing on affordability and choosing a property that supports their long-term goals,” Goslett concludes.
Once you have determined your budget and long-term goals, reach out to a RE/MAX agent who can help you find a property that is right for you, regardless of what the market is doing.
