select
|

It’s party time for first-time buyers

For those consumers keen to buy their first home, there couldn't be a better time to take the plunge.

So says Rudi Botha, CEO of BetterBond, which as SA’s biggest mortgage originator assists thousands of buyers a month to obtain home loans. He notes that the residential property market has reached a stage that occurs only very rarely, in which several major factors are all aligned in favour of first-time buyers.

And, he says, this is clearly evident in BetterBond’s latest statistics, which represent 25% of all residential mortgage bonds being registered in the Deeds Office and include applications to, and bond grants from, all the major lending banks in SA.

“For a start, despite the fact that the average home purchase price among first-time buyers has climbed steadily in the past four months from R582 000 to R621 000, and is currently also 5% higher than at this time last year – home ownership has actually become more affordable, thanks to the easing of credit restrictions and of course, an interest rate cut.”

At the moment, about four out of every 10 home loans approved are 100% loans and most of these are going to first-time buyers, including those in the affordable sector.

“In addition,” says Botha, “the average percentage deposit required by first-time buyers who don’t manage to secure a 100% loan has declined from 11,5% of the purchase price to 9%. So effectively, the average deposit amount for such buyers has fallen to around R56 000, compared to R71 000 earlier this year – even though home prices are higher.”

And this relief is now combined with lower home loan interest rates since the Reserve Bank cut the repo rate by 0,5 percentage points in July, further increasing affordability levels for first-time buyers.

“For example, at the current ‘standard’ home loan interest rate of 8,5%, the minimum monthly repayment on a bond of R621 000 (assuming a 100% loan) is R5389, compared to R5587 at an interest rate of 9%. And lower rates do of course make it easier for prospective buyers to qualify for loans in the first place.”

As it is, he says, these developments are already gaining the attention of prospective buyers eager to enter the property market. “First-time buyers accounted for 42% of all bond applications in July, compared to 37% four months ago, and the percentage of loans being granted to first-time buyers has at the same time risen from 35% to 39%.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK