In response to Ian Fife's alarmist "Property crunch" (Cover Story August 11), let's disaggregate the property marketplace and see where the pressure is being felt.

Mr & Mrs Homeowner: Even though they are paying higher interest rates, are still enjoying the financial miracle of building equity by paying an amortising mortgage and gaining an appreciating asset. The household budget will be stretched with higher rates, but no blood in the streets here.

Developers Inc: With 70%-80% of most developments being sold "off-plan", most of the pricing risk has already been passed from the developer over to the off-plan buyer. The developer will still sell the last 20% of available units, albeit a little slower, as natural demand for urban accommodation continues to grow in line with general economic growth despite the recent interest rate rises. Verdict: the demand is still strong where they develop for the real market of owner-occupiers buying a home to live. The demand for property priced below R800 000 in the cities seems insatiable.

Uninformed buy-to-let investors: Well, now it is not as easy as doing a Saturday morning course and then becoming a property tzar, is it? The notion of buying five off-plan properties on one income is just as unsustainable as the debt-laden black economic empowerment deals founded on the myth of perpetually increasing share prices. Flipping (buying with a view to selling quickly without some value addition) isn't investing, it's speculating and worse still, speculating with other people's money. Verdict: for this group, the party is so over.

For the rest, the careful investor who has a long-term view and invests in cash flow-producing properties in popular areas, understands that wealth through property is a discipline best practised over time. The property fundamentals driving demand for reasonably priced property below R1m and within 30 minutes from major commerce nodes are strong enough to ameliorate a further 50-100 basis point interest rate hike.

Buying property and holding on for capital gain gives one the magic of building equity and an undisputed, positive, long-term trend of capital appreciation. This approach will ensure that the 80% majority of the residential mortgage clients, those who buy to live, waltz on into a healthy financial future.
 

Kura Chihota, Benmore.