When Is The Best Time To Buy A House?

Now the title of this article might be a bit strange. I feel like the need to say that I am not a psychic and do not have any powers. I promise you that you will only get solid common sense advice from me on this topic and no voodoo will be involved. What is even stranger than this title is the fact that a lot of Zimbabweans do not seem to be asking this question at all. That is a natural reflection of our economy. Most people just buy houses whenever they happen upon the funds to do so.

According to economists and investment experts, a good time to buy your house is when you can afford it. Nobody can predict the housing market. Investment experts can try to gauge whether house prices are going to rise or fall based on a number of indicators but experience has consistently shown that these processes are not foolproof. Real life continues to defy prediction models so while it is a good thing to always consult the financial crystal balls to determine whether property prices are going to fall or rise, you can never tell. So if you are thinking of buying a house or real estate property now is as good a time as any.

To reinforce this point let us examine how the Zimbabwean economy is an anomaly. In a lot of countries, the real estate market is often used as a barometer of how well the entire market is doing. When inflation rises, authorities tend to raise interest rates, which means more expensive mortgages which in turn leads to a fall in property prices. The fall in prices is even lower as people fail to service their mortgages and try to sell. Banks repossess houses and try to sell them. The result is a massive fall in property prices. Conversely, prices rise when economies are doing well.

Zimbabwe is not so predictable. Right now the economy is not doing well. The bulk of people are living below the poverty line but property prices are still rising. This is partly explained by the fact that most houses in Zimbabwe are bought through savings and other sources of finance in lieu of mortgages. The huge Zimbabwean diaspora is also a key player in the market and even when they are not earning well, Zimbabwean property prices are relatively lower and affordable to them given what they are earning. There is also a general housing shortage with the latest surveys showing that about half the people in urban areas are renting.

The short of it all is that it is extremely hard to time the Zimbabwean property price market. Right now the market appears to be bullish. This means that prices are rising and we expect them to continue rising. It is therefore not a good idea to wait and hope that prices will fall allowing you to be able to afford your dream home. There is also no guarantee that prices will keep rising, they might start to fall due to any number of reasons:

• The Zimbabwean national government and councils have been working on various residential stand projects and as more stands become available prices of properties might fall.

• Developed economies have been suffering too with a lot of them expected to enter a recession. This has resulted in layoffs and pay cuts in those countries. This might make those in the diaspora nervous and force them to take a cautious approach and start saving instead of splashing and sending money back to Zimbabwe

• The bulk of diasporans are in South Africa and there are permit issues that have affected their ability to earn more revenue which might depress demand.

• Continued high-interest rates in Zimbabwe might force would-be buyers to postpone buying.

I feel like I need to say this again. The best time to buy a house is when you can afford it. Do not try to time the market. However, it is wise to consider your financing options. If you can get a cheap loan the best time to buy a house is when that loan is at its cheapest. That is just rare in Zimbabwe as most houses are bought using savings.