Top tips from Cape Town’s leading property expert, Lance Cohen
Lance Cohen is a multi-award-winning real-estate agent, with 35 years experience in the property market, having sold some of South Africa’s most sought after properties to celebrities, political leaders, as well as local and international buyers.
What advice do you have for first-time buyers?
“Spend sufficient time looking at the opportunities that are available as the market is currently a buyer’s market, which means there’s a lot of inventory out there, so if you spend sufficient time looking, you will find the needy seller that is selling their property below market value. I also recommended that in this market, to make cheeky offers, as one doesn’t quite know how desperately the seller needs to sell.”
When is the best time to invest in property?
“I don’t think that there’s ever a time to say don’t invest in property, but when the banks don’t want to lend money on property, that can be seen as a bad time to invest. No one can ever pick the top or bottom of the market, as the property market generally moves in 5 year cycles, and we are currently going into the third year of a downward cycle. So if one sees exceptional value now, it could be a good time to invest. That being said, one has always to remember that property needs to be viewed as a long-term investment, so while the market may still go down further, it ultimately always has and will recover.”
When can buyers expect to see growth in their property investment?
“Historically, property prices double every 5 years when there is 15% growth, and every 3 years when there is 20% growth, so while we are currently experiencing negative growth, we certainly have achieved those numbers, in the past. Again, I advise one to take the view of holding your property investment for a minimum period of 10 years, which you can then certainly see the real value of your property.”
What is your advice for local buyers?
“The trend at the moment is for people to be scaling down, and looking at halving their investment, then looking at taking the other half off-shore, to hedge one’s bets rather than having all one’s eggs in one basket. So there is a big move at the moment, for the more affluent South Africans to be looking at investments abroad and scaling down their local investments.”
What is your advice to those who want to triple their property investment?
“There is a lot of existing inventory for sale, and quite a lot coming on-stream that was commissioned to be built before the downward turn of the market. Once the property market has bottomed, the market will probably trade flat for a further two years, for all the inventory to be absorbed, and then hopefully we can see a decent upturn.”
Finally, what advice do you have for all property buyers?
“Don’t sit on the fence, instead use this time as a buying opportunity, rather than kicking oneself and saying, I should have, and why didn’t I? Make silly offers because there is a market, as the market consists of willing buyer, and a willing seller, and of course a willing agent. While we are currently between 25-30% from our highs, people are still buying homes, and people are still selling homes, and people of course still need places to live.”