It’s a buyers’ market | Home Loan Advice

You’re in the market for a new home. And according to property experts everywhere, you’re in luck. Indeed, talk to any agent anywhere in SA and you’ll be told – with absolute justification – that this is a classic buyer’s market. In other words, now is a really good time to buy a home and/or invest in property.

The reasons are simple:

The market is somewhat depressed, sales are slow (especially in the upper price range) and genuine sellers are keen to dispose of their properties and move on. Which means that buyers now have serious bargaining power.

The average first-time buyer’s purchase price has seen consistent growth over the past six months, due mostly to sustained lower interest rates combined with the ongoing easing in lending conditions. Rising housing costs and increased municipal and utilities tariffs, along with the changing economic and racial demographics among home buyers, are now influencing demand at the lower to middle end of the housing market.

The banks coming back to the party

A significant factor in the present market is the fact that South Africa’s banks are playing a little less hardball over financing home loans. There was consistent improvement in banks’ lending criteria in 2012, which has obviously had a positive impact on the effective approval rate. The reduction in interest rates of 650 basis points since 2008 has improved affordability and markedly reduced the cost of servicing a bond. These record low interest rates, coupled with subdued property price increases, a more relaxed attitude by the banks and lower deposit requirements will continue to prove beneficial to potential homeowners.

Is this really a good time to invest in property?

This might be a case of stating the obvious, but property should be an investment that will continue to grow in value in the years to come. Potential homebuyers and/or investors in South Africa should always research an area thoroughly and consider the following when purchasing property:

• Always look at the surrounding areas – what sort of infrastructure exists and what is the crime rate in the area?
• Make sure you’re going to be comfortable with the daily commute to work and the distance and time you will spend on the road each day.
• Try to purchase property that is relatively close to good schools. This advice applies even if you don’t have school-age children. When it is time to sell, strong school districts are often a top priority for home buyers, thus helping to boost property values.
• Always be on the lookout for facilities that can create unwanted noise or disturbances in the area – pubs, nightclubs, restaurants, service stations, shopping malls and so on.
• Potential buyers should start their property search online as property websites list properties for sale throughout SA. The big win here is the convenience of the entire operation – prices, areas, details of the dwelling and photographs all help guide you in your ultimate choice.
• An experienced and reputable estate agent has access to invaluable market information long before the public: he or she will know a great deal about homes that are new on the market and comparable prices. Working with a good agent will make the search process much easier.

If you would like to speak to a Professional Mortgage Specialist about your lending requirements, please phone Mortgage Plus Bond Originators on:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Buy while interest rates are low

Now is as good a time as any to buy a home thanks to the slowdown in South Africa’s residential property price growth.

According to Mortgage Plus, as the economy recovers, property prices remain reasonable and the effect of lower interest rates is felt.

Mr AM Prinsloo, provincial sales manager at Mortgage Plus says confidence will return to the bricks and mortar investments.

Would-be home buyers and property investors with cash have an opportunity to get into the property market, he says.

Although the property market got off to a slow start in 2011, estate agents are seeing an improvement in the market.

Pam Golding Properties (PGP) report that sales are being concluded with more people purchasing homes in the more affordable category priced under R2 million.

Last month, Absa Home Loans said affordability remains key in the housing market and more buyers will be looking at smaller and affordable properties.

Carol Reynolds area principal for PGP Durban North and La Lucia says affordability remains the key driver of bond acceptance and that it is imperative to factor household running costs into the equation when looking at buyer affordability.

“Buyers who have the means to put down a sizeable deposit will be better positioned to negotiate with the banks.”

She says in general, one aims for between 15 and 20 percent deposit as banks are beginning to look more favourably on 10 percent deposits.

FNB Home Loans reports a lower rate of household sector indebtedness compared to the previous quarter.

According to the FNB Household Sector and Consumer Update Q2 2011 report, although household indebtedness has come down, there has not been an improvement in the household sector’s saving rate lately.

John Loos, FNB Home Loans property strategist says the household sector does not save enough to fully cover the depreciation of fixed assets in its possessions.

For many households, this translates to lack of money to put down for a deposit towards buying a new home while in others, this impacts on their ability to repay their mortgage loans.

For buyers who have saved money and can afford to buy, now presents a good opportunity as interest rates are at their lowest, he says.

He explains that in the past few years, estate agents surveyed pointed to a greater portion of home owners not doing full home maintenance and the number of those still maintaining their homes or doing any upgrades has declined since the boom years.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za