While each home buyer will have their own criteria as to what their home must have based on their life stage and personal preference, there are a few key elements that home buyer’s in the current market seem to agree on, RE/MAX of Southern Africa.

The right price

According to RE/MAX the first thing that the majority home buyers must have is an affordable price tag, especially first-time home buyers because they often don’t have the equity from selling a property to roll into the next purchase. Although aspects such as space and the aesthetic appeal of the home are important, for most part the financial elements and affordability are top priorities.

“It is important for buyers to have a budget and make sure they stick with what they can afford. Buyers shouldn’t overextend themselves in the current market as it is highly likely that if they do, they will experience financial pressure in the foreseeable future. With house prices decreasing over the past few years, as well as the current low interest rates, properties that were previously unaffordable to many home buyers are now within reach. This has significantly opened up the market to buyers who now have more options available to them while still managing to stay within their budget limitations,” says RE/MAX.

A home that meets future needs

RE/MAX says that although it is impossible to know what the next ten years may hold, the reality is that many home buyers will be in their home for longer than they think. It will pay off to purchase a home that doesn’t just meet the criteria now, but also in the next five to ten years.

“Property is a long term investment. A must-have now may not be one in a few years, so home buyers should look at property and ask if they can see themselves staying there for a while and what the future looks like. Is marriage on the cards or perhaps children?  If so, then an extra bedroom would probably be of higher importance than granite counter tops.

A prime location

It might be an old cliché but there is certainly a lot of truth to the location, location, location adage. This mantra rings true for home buyers in any market; location will always be high on the must-have list. Whether it is a question of lifestyle or good return on investment, buying a property in the right location will be one of the most important decisions a buyer can make.

RE/MAX notes that vital aspects to consider when deciding on a location would be:

Proximity to your place of work.

• A location convenient to local amenities such as medical facilities and shopping centers.
• A neighborhood / estate or complex that is well-maintained and is aesthetically pleasing.
• Buyers with children or plans for a family should look at the quality of schools in the area.

“Try to find an area that is established and has a history of solid returns that have been stable over the long term. Look for areas that have kerb appeal that are well maintained and where there are more owners than tenants, as owners will predominately want to protect their investment by keeping the area well looked after.

A house that has been properly maintained

Buying a house that has been properly maintained by the previous owner can help alleviate a large number of costs in the future. He says, “With the introduction of the Consumer Protection Act many buyers are insisting on the list of defects that the act prescribes, even though legally it may not be applicable. It is important for them to know that they are purchasing a property that is in good repair.”

While a quick run through and spot check of the home can help buyers sift through their options and narrow down the property they would most like to purchase, it is best to have a professional inspector undertake a thorough check and advise accordingly.

Contemporary updates in key areas

Although the property may not be completely renovated, there are certain areas of a home that buyers place a higher priority on, says Goslett. This is because there are some rooms in a home where renovations will add more value in terms of resale at a later stage.

For example, kitchens and bathrooms are known to get sellers the best boost in value, with many sellers recouping as much as 80% of their renovation costs on a kitchen and between 65% and 75% of the costs of remodeling a full bathroom. “These two areas of a home are the most important to buyers when looking at prospective houses. If they have been renovated or simply updated by the previous owner, it will have a big impact on the overall appeal of the home.

Goslett concludes by saying that given the fast options available to buyers in the current market, sellers should take these must-haves into consideration when wanting to successfully sell their property in the shortest possible time.

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

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The Monetary Policy Committee’s decision on Thursday to keep the repo rate at 5.5% and prime lending at 9% comes as no real surprise and offers a continued respite to debt burdened homeowners.

This was widely anticipated and is welcome, said Dr Andrew Golding, CE of the Pam Golding Property group, particularly against a backdrop of rising oil and food prices coupled with increasing electricity tariffs.

“Consumer spend generally remains cautious as a result of ongoing concerns regarding household debt.

“And amid market speculation regarding an end to the current cycle of lower interest rates, it is hoped that interest rates will remain stable at least for the remainder of this year in order to stimulate further economic growth, bearing in mind that job creation remains a key focus,” said Golding.

He said that from a residential property perspective Pam Golding Properties continues to see a gradual, albeit modest improvement in sales volumes and in house prices. “It should be borne in mind that we are still seeing the effects of the latter part of last year’s reduction in interest rates permeate through the marketplace, helping sustain residential sales across most price sectors.

“However, although relaxed to some extent, strict bank lending criteria continue to keep a rein on any significant recovery in the housing market,” added Golding.

He said that while it’s true that interest rates are at a historical low, first-time buyers entering the market still face affordability issues. This is “due to the higher municipal rates and increased electricity costs, among other costs inherent in the purchase and upkeep of a home, and this is exacerbated by restricted access to finance.”

“On a positive note, what we are noticing is that those sellers who are receptive to pricing their homes at realistic, market-related prices are reaping the benefits and achieving sales,” said Golding.

He said that for investors who have access to finance or with high liquidity, there are still good buys to be had, as property prices in the main have remained relatively constant over the past year or so. “Having said that, there are many areas or locations where properties continue to achieve sound growth in value, and will continue to do so, making the case for investment in property as valid as ever”.

While most remain cautiously optimistic about continued economic recovery, said Adrian Goslett, CEO RE/MAX of Southern Africa, there are definite signs of improvement. “Aside from the interest rate remaining stable, The South African Chamber of Commerce and Industry’s Business Confidence Index for January 2011, which is at 87.4, indicates a vast improvement from January 2009 (82.4) and 2010 (81.2).”

It is anticipated that 2011 will be a fairly flat year for the property market, said Goslett, as debt-to-income ratios are still at a relatively high level and as distressed homeowners continue to make use of the various bank programmes to assist them in selling property they can no longer afford.

“As there is still limited access to finance, rental markets are expected to peak while qualified buyers will be able to make the most of the property investment opportunities that are currently there for the taking, a situation which certainly won’t last forever as interest rate hikes are expected later in the year,” said Goslett.

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