PROPERTY NEWS - The longer you wait to buy your own home, the more it will cost, and the harder it will be to buy, says Samuel Seeff, chairperson of the Seeff Property Group. If you have been on the fence about entering the property market, then the time to act is now, he says.
With the significant interest rate cuts over the last year, and the housing market now showing strong signs of recovery, including rising prices, waiting any longer could mean you miss out on a prime opportunity.
Prospective buyers should take advantage of the lower interest rate, he says.
The past year has brought welcome relief and notable savings to homeowners and buyers. Since September last year, the South African Reserve Bank (SARB) has delivered five interest rate cuts, bringing the bank repo rate down from 8.25% to 7.0% and reducing the prime lending rate to 10.5%.
This has put more money back into consumer and homeowners’ pockets, and he says has made home loans more affordable than it has been in years.
For a homeowner with an average home loan this translates to savings of around R900 per month. And if you purchase below the transfer duty exemption level of R1.21m, there is further savings for buyers.
The improved affordability is already having a tangible effect on the market. Data from FNB’s House Price Index show that the average growth in selling prices has accelerated to 4.5% year-on-year as at August. This is a significant improvement from the 1.2% growth reported in January, he says. This also means a property that you could have purchased for R1m in January, might now cost you about R45,000 more.
Home loan applications are on the increase with mortgage originators such as ooba Home Loans for example reporting application volumes increasing by as much as 12% and 14% compared to last year. This growth is a clear sign of renewed buyer confidence and pent-up demand being released into the market, and Seeff says those who can buy, should not wait.
The general mortgage lending conditions remain extremely favourable for property buyers with deposit requirements slightly easing over the last few months, while approval rates remain high.
Stiff competition in the home loans market also means that buyers could secure rate concessions which further helps with affordability.
Seeff warns that this window of opportunity may not remain open indefinitely given that property prices are climbing again. While there is hope for more interest rate cuts, Seeff says there is no guarantee, and prospective buyers should therefore not wait as property is not getting cheaper. If you hesitate, you may lose out on a crucial window of opportunity.
The sooner you get onto the property ladder, the more you stand to benefit in the long-term, even if it means starting small if that is all you can afford. He says investing in your own home is not just an asset, but a forced form of saving.
Every monthly bond payment contributes to building equity and provides a solid foundation for your financial future. In a market where rents are also rising, owning a home can provide a much-needed hedge against inflation.
“My advice to anyone who is financially in a position to buy is to do so now. The market is ripe with opportunity, and you do not want to look back in a year’s time and regret that you did not take the leap.”
Issued by Gina Meintjes
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