Hope on the Horizon
Category Market News
While 2020 may have been a stormy year on all fronts and the economic forecast ahead is gloomy, there is glimmer of hope on the horizon in the property market. Specifically, for those looking to invest in a second property.
Recessions overall reduce property buying power and along with that property prices also tend to correct downwards. What this means is that while this is not the time for those who have over-invested to sell, it is a great time for those buyers looking to invest in residential property or purchase second homes.
This month, we're taking a look at what the numbers tell us around second property purchases - the types of properties being bought, where people are buying and who these buyers are.
Sunny forecast ahead for second property buyers
Buying a second property as a potential investment is being driven by record-low interest rates and the increased negotiating power buyers have in the current market. For buyers in the age group 25 - 40, who account for the largest proportion of buyers purchasing a second property, the forecast looks to be sunny and clear skies ahead.
So, what type of second properties are the most popular?
While freehold second property purchases have remained constant over the past few years, sales among second property buyers in estates have grown from 17% in 2010 to 21% in 2019. On the flip side sectional title sales have dropped sharply from a high of 27% in 2013 and 2014 to 21% in 2019. The growth in sales in estates can be attributed to the benefits estates offer in comparison to sectional title properties - greater security along with the benefits that come with freehold ownership.
By far second property buyers purchase homes in the same province as their primary residence. This is most likely because they know the province and if they're buying-to-rent than managing a property in the same province as where they live is that much easier.
article courtesy LIGHTSTONE
Author: Lightstone
