Why now is a good time to sell your Western Cape home
Category Seller Advice
There are so many reasons why now is a good time to sell your house in the Western Cape and most are related to the unique conditions created by the Covid-19 pandemic.
But these conditions might soon not be quite as favourable as they are now, so the thought of selling your property is worth serious consideration. There are lots of opportunities for homeowners who are ready to sell and take the next step in their property journey.
Watch here on why now is a good time to sell your house in the Western Cape:
We've rounded up recent statistics to show you just how many reasons there are to sell your Western Cape house right now:
Why now is the ideal time to sell your home
1. Buyers are flocking to the Western Cape
If you've been living in the Western Cape for a while, you may have noticed an influx of people moving here from other provinces of South Africa. This trend of semigrating from one province to another isn't showing signs of slowing down anytime soon.
Hayley Ivins-Downes from Lightstone Property reported on this semigration trend in November 2021. She said that most people are moving to the Western Cape, up to 35% in 2021 from 31% in 2020." She also added that more people are arriving than leaving the province.
And it's not only Cape Town that's drawing buyers. According to Ivins-Downes, homeowners are targeting cities and towns: "The trend towards moving from metropolitan areas to smaller and larger towns or Cape Town - South Africa's second largest metro - can mostly be attributed to a move away from crime-and-grime and towards a slower, safer, quality lifestyle in the small to large towns."
She noted that semigrants are also attracted to the fact that municipalities are typically better run in the Western Cape than in other parts of the country.
2. More people can now afford to buy homes
Now is a good time to sell your property because in the last two years, it has become cheaper to get a home loan.
Home loan interest rates are determined by the prime lending rate, which is set by the South African Reserve Bank. At the end of 2019, the prime lending rate was 10%. It dropped to a low of 7% in 2020, and although it has increased by 0.5% in January 2022, the lower rate still makes it easier to get a loan.
People applying for home loans or mortgages are also getting approved more often than they did before the pandemic. Data from FNB shows that mortgage approvals in the first nine months of 2021 were about 34% higher compared to the same period in 2019.
FNB also says that deposits were smaller at the end of the pandemic than they used to be two years before. "Buyers now need to fork out slightly bigger upfront deposits relative to the 2020 average, but still smaller compared to 2019." This might mean that it's easier for first-time buyers, who typically don't have large deposits saved up, to buy homes.
If you're looking to sell a smaller, more affordable house, this might be good news for you. First-time buyers will be looking for properties they can afford, so this is your chance to draw their attention.
3. Many homeowners are looking to upgrade to higher-value houses
There's also good news for homeowners who are thinking of selling upmarket houses. Lightstone's Hayley Ivins-Downes says that "46% of buyers moving to the Western Cape are more likely to move to a new property of greater value".
Not only that, but they are moving to smaller homes, so if you have a compact but high-value house, you might stand just as good a chance of selling your property as other sellers in the province.
To ensure you attract the right buyers and help speed up the sales process, start doing essential maintenance on your property now. Poorly maintained areas are often more visible in smaller homes, and buyers will be less likely to spend on a high-priced house if they have to fork out to fix up the place.
4. You might have a tough time renting out your property
Owning more than one property is an excellent investment, but the COVID-19 pandemic affected the rental market.
If you're thinking of moving, you might be tempted to rent out your home instead of selling, but the rental market is unfortunately not as favourable for landlords as it used to be.
There are two reasons why you might want to consider selling your house instead of renting it out now.
1.Tenants
The first issue is a lack of tenants to rent your home. In 2020 and 2021, landlords in the Western Cape faced challenges getting renters. The province had the one of the lowest demands for rentals towards the end of 2020, according to the credit bureau TPN's Market Strength Index. There simply weren't enough tenants for all the rental properties available.
The credit bureau reported that things were looking up for landlords towards the end of 2021, with more demand for rental homes than supply of properties. But the TPN team cautioned that international travel restrictions may have affected this demand. Read more in this Vacancy Survey.
2.Rental increases
The bigger challenge when it comes to renting out your house right now is that landlords aren't getting as much rent from tenants as they used to. Homeowners renting out their properties in the Western Cape couldn't increase their rent for the most part of 2020, according to the PayProp Rental Index.
The good news is that rental growth improved in 2021 but PayProp writes that "rent increases are likely to remain subdued over the short- and medium-term". Renters are essentially struggling to afford yearly increases because so many people are unemployed and the South African economy is recovering slowly after the effects that Covid-19 had on it.
That doesn't mean that you shouldn't invest in a second property, but merely that it might be a little more challenging than usual. If you already own a second home that you're renting out, it's also important that you make sure it's still showing the return that you expect.
Not sure your rental property is still worth it? Read our article on Three signs you need to sell your rental property now.
Should I sell my house now?
If you're not sure whether you should hold on to your property or sell it now, consider the following:
Sell your property, if:
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your home is located in an area where there is demand for properties. Right now, several parts of the Western Cape are drawing lots of buyers from all over the country.
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home loans are still affordable or accessible to buyers interested in your house. At this moment, the prime lending rate makes bonds and mortgages cheaper than they were in 2019, and potential buyers of your home stand a larger chance of affording your property.
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you have a property that offers convenience to potential buyers. Remember that almost 50% of people moving to the Western Cape are investing in homes of greater value than the properties they moved out of - even if their new house is smaller. Convenient, high-value homes are in!
Don't sell your property, if:
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you're getting offered less for your home than it's worth. Demand for property in the Western Cape has been growing for years now. If there's not enough interest in your home now, it could be a good idea to hold on to it for just a little longer.
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you can afford to rent it out at a lower monthly cost. Tenants can't afford to spend as much on rent as they used to a few years ago, but things might change. If you can afford to rent your property out without increasing the rent this year, it might still be a good investment.
There are so many opportunities for Western Cape homeowners interested in selling their property right now. If you're interested, start by getting a professional valuation of your house.
It's also clear that the property market is evolving and changing at a rapid rate so reach out to experienced estate agencies for advice. Our team is ready to guide you and available to answer your questions about selling your home in the Western Cape. Contact us on 021 987 0220 or send us a message on 079 437 6240 for honest advice.
If you're ready to sell, reach out to us to get introduced to your NS Property Solutions area agent in the Northern Suburbs, Worcester, Rawsonville, the Whale Coast or Jeffreys Bay.
Do you want to know how to sell your home quickly and easily? Choosing several estate agents to sell your property might not be in your best interest. Find out more in our article How a sole mandate can make your house sell faster.
Author: NS Property Solutions