MortgageSA, one of South Africa’s largest mortgage originators, says early indications are that February and March are, once again, going to be the months when the property market is most active.
Bond applications are normally received by the company immediately after an offer to purchase is accepted and statistically show up earlier than property-transfer numbers, which typically are delayed by three to four months before transfer through the deeds office.
MortgageSA CEO Saul Geffen says that in the eight years of its existence, MortgageSA has consistently recorded the highest intake of bond applications over the February-March period, and there is no reason to doubt 2007 would be different.
He believes there are five key reasons for the typical February-March spike:
- Prudent consumers who managed to avoid blowing their entire bonus during the year-end buying spree are now looking for long-term investment options, including property.
- People looking for a home and who have been adopting a “wait and see” approach since spring in the lead-up to the festive season are now ready to move, and start fresh in the new year.
- Many people wait for their 13th cheque before looking for new jobs. If the new job is in a different location, this affects where they live. Geffen says South Africa is enjoying a buoyant job market and a number of individuals are relocating, driving a portion of the property market.
- Foreign buyers historically tend to holiday first and then house-hunt towards the end of their trip, which coincides with the move from summer towards autumn.
- Local second-home buyers are often in the market after they have test-driven a location over the Christmas holiday. Geffen says it is no surprise that coastal property markets have been in the news recently.
“These factors combine to create a strong property market in the first quarter of the year, after which we normally see a slight retracing in April before the number of bond applications plateaus up and holds steady,” he says.
Geffen’s advice to people thinking about selling is to take advantage of the February-March demand. “There’s no doubt that Christmas comes two months later in the property game,” he says.