Bottom-end buying now main market driver

“Our figures show that over the past year, more than half (52%) of all bonds granted have been for less than R500 000,” says Betterbond CEO Rudi Botha, “with 42% occurring in the R250 000 to R500 000 bracket. And allowing for an average 15% deposit, this means that most home purchases at the moment are being made for less than R600 000.”

A further 33% of bonds granted, he notes, were in the R500 000 to R1m range, leaving only 14% that were granted for more than R1m.

What is more, Botha says, it is not only first-time buyers that are active in the under-R600 000 market. “Indeed, first-time buyers currently account for only 16% of the bonds being granted through Betterbond, and some of these are actually for more than R500 000.

Some of the remaining bonds for less than R500 000 are of course “further advances” being made to existing homeowners who are tapping into the equity built up in homes that increased in value during the boom years, but the majority are going to second or third-time buyers and to investors, he says.

“What we are observing is a fairly large trend among those buying for the second or third time towards downscaling, or moving from bigger properties that are more costly to maintain and secure to smaller homes that are both cheaper to purchase and cheaper to run.

“This ties into growing consumer concerns about rising electricity tariffs, municipal rates, transport and food costs, and reflects the desire of many homeowners to reduce their overall debt load, not only their monthly bond repayments.”

Meanwhile, Botha says, buy-to-let investment is also on the rise once more, albeit relatively slowly, as it becomes increasingly obvious that stricter lending conditions are here to stay, and that the demand for rental properties is set to rise as a result, particularly at the lower end of the market.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 23 Jan 2018
      Many people only start thinking about home-ownership when they are ready to “settle down” or start a family, which is why first-time buyers these days are generally in their mid-30s, compared to those in the previous generation who were usually in their mid-20s.
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us