SOUTH AFRICANS STILL LOVE PROPERTY

Hatched by Justin Clarke on Tuesday, December 6, 2011

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Private Property, in an ongoing effort to understand buyers and tenants needs recently completed a comprehensive survey, done in association with market research company Columinate. Some of the results were astounding.

The biggest myth that we bust was that almost all South Africans still believe strongly in property as an investment class . In fact 74% thought that buying a property even in today’s uncertain economic climate was a prudent investment but an even bigger majority of 93% said that they would prefer to buy rather than rent if they could afford to. Overall, owning property had far more positive association than renting. Generally owning was associated with investment and assets, while renting property was perceived to be unwise and irresponsible by those in the survey.

So why don’t the respondent’s buy? The broad answer is that they cannot afford to buy, or they could not afford to buy the same amenities that they could rent. We know that banks that traditionally loaned money to home buyers are lending very cautiously at the moment and this comes out clearly in the survey. Applying for a homeloan is the most stressful event in the home buying process. A remarkably low 15% of tenants suggested that they preferred to rent because they could get better returns in other investments.

Other important factors that influenced the buying decisions of potential buyers were the price (67%), the proximity to work (44%) , the proximity to good schools (42%) , and the proximity to shopping centres (35%).

But one of the most interesting points to note was security. When asked what the most important factor which influenced the choice of area for both buying and selling the answer came out very clearly in favour of god security. Nearly 44% of respondent’s suggested that the crime rate, the security presence and the cleanliness of the area was the strongest influence when deciding on an area.

To sum it all up, nothing has really changed my view on buy-to-Let property investment. I will continue to look for small 2 bedroom units in good areas, within a secure complex. The banks and the state of the economy will continue to control the volume of tenants who become owners but we now have confirmation that there is huge pent up demand for affordable good housing. If you love the idea of owning property, you are not one of the crazy ones. If you can but don’t choose to invest in property, maybe you are…