Key Factors Influencing Buying Essay

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It has been said many times before that purchasing a house is likely to be one of the biggest fiscal investings anyone can do in their life-time.

It makes sense so that the belongings which people own makes up a big part of their wealth.

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“This is particularly true for many householders in the USA. ” says Adrian Goslett. CEO of RE/MAX of Southern Africa. He says that the mean American has about tierce of their net worth tied up in existent estate. “While non all South Africans ain belongings. they want to. South Africa has been described as a state which values belongings ownership above all other investings and sees it as an of import portion of their life style. ”

In visible radiation of this. Goslett says that understanding consumer behavior and other factors that drive belongings investing is cardinal to any belongings dealing for both the purchaser and marketer.

He explains that purchasing behavior is influenced mostly by internal factors such as the motive or demand to get a belongings. the buyer’s cognition of belongings. personality and lifestyle demands. all of which influence the determination procedure.

He refers to an extract from Principles of Marketing by Philip Kotler and Gary Amstrong that indicates the purchaser determination procedure passes through five phases: demand acknowledgment ; information hunt ; rating of options ; purchase determination and station purchase behavior.

“The procedure starts with the purchaser recognizing a demand to have a belongings and so seeking for lodging information from several beginnings. The book references four groups of information beginnings: personal. commercial. public and experiential beginnings. The estate agent would organize the commercial and public beginning of information. for illustration. while personal beginnings would be made up of household and friends. It stands to ground that information received from friends and household could be more convincing than the formal information received from the estate agent. ” says Goslett.

But. he says. even though investors may be more positive by information received from personal beginnings that they trust. working with a reputable and professional estate agent who provides believable market-specific information is besides a critical portion of the information assemblage procedure. “In current trading conditions. purchasers need to to the full understand the belongings market and the factors that influence it when doing their purchase determination in order to procure the best trade. ” Goslett says that some of the key factors which influence the market are demographics. involvement rates ; general economic public presentation and authorities statute law.


The composing of a population in a certain country based on age. gender and income are statistics that are frequently overlooked but demographics are considered to be a important factor in finding how existent estate in a certain country is priced and what types of belongingss are in demand.

Goslett says that any major displacements in the demographics of an country can hold a immense impact on existent estate tendencies and demand for belongings. “Investors. ” he says. “need to inquire themselves who they think will be populating in the suburb in the following five old ages and how these alterations in purchaser profile could potentially impact the demand for the type of belongings they are looking at puting in. “Knowing that you are puting in a belongings that will appeal to investors or renters for old ages to come will assist you to contract down the type and location of potentially desirable existent estate investings. ” says Goslett.

Interest rate

South Africa presently has the lowest involvement rate it’s had in 38 old ages. Siting at 9 % . the current rate has made puting in belongings an attractive option for many who have been able to afford it over the last twelvemonth or so. But involvement rates are expected to increase in the following twelvemonth or two. and may perchance make the 12 % grade once more in the months in front. Changes like this will greatly act upon the ability of consumers to buy belongings. as it affects the monthly refund figure and hence the affordability ratios.

General economic public presentation

The overall wellness of the economic system and general economic public presentation as measured by economic indexs is another cardinal factor that can hold an consequence on the value of existent estate. Goslett says that by and large a sulky economic system can be linked to a sulky existent estate market. nevertheless investors should be cognizant what rhythm the economic system is in and mindful of the existent estate industry’s sensitiveness to the current economic rhythm.

South Africa’s Business Confidence Index ( BCI ) for June. as released by SACCI improved to 86. 8 in June. one index point up on May. The BCI averaged 86. 9 in the first half of 2011 compared to 82. 8 in the first half of 2010. While strong. SACCI says that this betterment must be viewed in the context of weak public presentation in the first half of 2010.

Until the planetary economic crisis hit South Africa in late 2008. economic growing had been steady and unprecedented. Harmonizing to Statistics South Africa. GDP rose continually from 2001. intending that from the first one-fourth of 1993 to the 2nd one-fourth of 2008. the state enjoyed an unprecedented 62 quarters of uninterrupted economic growing. South Africa’s GDP has recovered from the dip it took during the recession. and is now demoing a 4. 8 % growing. quarter-on-quarter. for the first one-fourth of 2011. Unemployment was at 24 % in the last one-fourth of 2010

homebuy1Government statute law

Legislation is besides another factor that can hold a significant impact on belongings demand and monetary values. Taxs such as Capital Gains Tax and reassign responsibilities all influence the affordability of the purchasing and merchandising of belongings. Transfer responsibilities have come down well over the last twosome of old ages. as has Capital Gains Taxation degrees.

There are many factors to see when purchasing or selling belongings. but Goslett says being good versed and understanding the market kineticss are indispensable for successful investing ventures. “There can be no uncertainty that understanding the cardinal factors that drive the existent estate market is indispensable to executing a comprehensive rating of a possible investing and thereby guaranting you are puting sagely. ”

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