The National Credit Act (NCA) and rising interest rates have conspired to transform a sellers' market into a buyers' one - but don't take too long if you are hoping to build or buy at a good price.

A window of opportunity has opened up for those looking for a bricks-and-mortar "bargain", but it's not going to stay open for long.

That's the message from John Loos, strategist for FNB Commercial Property Finance, who notes that residential and commercial building cost inflation is taking a bit of a breather - but in the longer term the strong rise is far from over.

Residential property prices have also not been moving up as quickly as in the past.

The longer-term trend is up, according to Loos and other property economists.

The downturn in building cost inflation is expected to be "short-lived", he said this month when releasing statistics.

Year-on-year, residential building cost inflation was 26% for the first quarter. This is "significantly down" from the 39,2% peak in the final quarter of 2006 "and ends a strong cost surge that began at the beginning of last year", he said.

"It is possible that contractor pricing power is beginning to suffer a little at the hands of rising interest rates and some consequent weakening in demand growth, resulting in some cost control measures," said Loos.

As people can generally afford less, there is expected to be more activity around the lower "less frills" end of the market.

Although there is some relative weakness in demand in the formal residential housing market, the sector "is experiencing significant competition for inputs from other sectors, which could be a driver of strong building cost inflation over the rest of the decade", he said.

It may also be a good time to build for those with an eye for a commercial property investment.

Loos said there has been a slowing in overall building cost inflation, but low vacancy rates across commercial property imply strong returns in future "as well as the need for stronger rates of building activity".

"As a result, I expect the lull in commercial property building cost inflation to be of short duration," said the property strategist.

The FNB Commercial Property Finance Commercial Property Building Cost Index suggested a peak of 37% year-on-year in the third quarter of 2005 to 16% by the first quarter of this year.

If you can't afford to buy now but have some cash for land, now would also be a good time to stock up. Land isn't expected to get any cheaper, particularly in urban areas close to business activity.

The implementation of the NCA from June is expected to slow residential property sales this year.

Prices, however, aren't expected to take a big knock, say economists.

According to Dr Elna Moolman of Standard Bank, South Africans can expect their properties to be worth 10% more in December than they were in January 2007.

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