Interest rates no reason for selling homes

Experts have advised people who feel the pinch of high interest rates not to rush into selling their properties.

Experts have advised people who feel the pinch of high interest rates not to rush into selling their properties.

Gerhard Kotze, chief executive of the ERA South Africa property group, has warned against rushed sales. He says the selling would be great for buyers looking for a bargain, but is not good business for the sellers.

"There are pitfalls. If you sell your property in a hurry, you could actually realise less than its market value and possibly even less than the outstanding loan amount," he says.

Kotze says property still remains the best way of building wealth, and continuing paying rent indefinitely, without any investment return, is clearly not wise.

He dismisses those people who sell with the intention of biding their time until interest rates decrease, making property more affordable.

Kotze says the fallacy of this argument is that you will almost certainly not time the market correctly and when you do decide to buy again, prices are likely to have increased, offsetting any decrease in interest rates.

He says if, "in spite of considering all your options, you still believe you have to sell," consult your bank for advice or bring in an expert estate agent to get the best value for you.

Interest rates have risen by 4percent since mid-2006 and Kotze says this has tempted many people to consider selling their homes and moving to cheaper property or rental accommodation. - Isaac Moledi

X