select
|

News on gap subsidy positive for property

From a real estate point of view, the most exciting aspect of President’s Jacob Zuma’s State of the Nation speech this week (subs: 14 February) was the news that the long-awaited “gap” housing subsidy scheme is now under way and gathering steam.

So says Berry Everitt, MD of the Chas Everitt International property group, who notes that this scheme (more properly called the Finance-Linked Housing Subsidy Programme) promises to open up housing opportunities to hundreds of thousands of people who have previously shut out of the property market because they earned too much to qualify for a State housing subsidy and too little to qualify for an ordinary home loan.

“Currently,”he says, “this ‘gap market’ is reckoned to consist of people earning between R3500 and R15 000 and is estimated to contain more than 20% of SA’s workforce, including many teachers, nurses and police officers, who will now have a real chance to become homeowners and start building a financial foundation for their families.

“And that is a very positive indicator for the future of SA’s residential property sectoras a whole,firstly because it will increase social stability and secondly because it will broaden the market base and, in time, have a ripple effect on demand and prices as the new entrants start to upgrade.”

There was some doubt, Everitt says, that the subsidy scheme, announced by the President in last year’s State of the Nation address,would actually get off the ground, “but now the money for it, as the President noted this week, is flowing from the provincial housing budgets as planned, and it is up and running.

“More than R126bn has been committed to date, with more than R70bn already having been allocated to buyers in 12 approved gap housing projects such as Walmer Link in Port 0Elizabeth, Lady Selbourne and Nelmapius in Pretoria and Cosmo City in Johannesburg, where the maximum home purchase price is around R300 000.”

The subsidy – which is being administered by the National Housing Finance Corporation - is available on a sliding scale to prospective homebuyers in the gap market who have clean credit records. Households earning R3501 a month are understood to qualify for the maximum of around R84 000 while those earning R15 000 a month can access about R10 000.

“Even better, whatever subsidy a household obtains is immediately applied to the purchase price of their new home so that the size of the home loan they need is reduced. This makes it easier for them to qualify for a loan in terms of the banks’ current strict lending criteria, and easier to afford the monthly home loan repayments and enjoy the pleasures of home ownership.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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