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
Characters remaining

    Latest Property News
    • 23 Mar 2018
      Durban’s rightful place on the ‘global map’ has been reaffirmed with the recent launch of the new Durban Monopoly board game. The second city in South Africa to be featured after Cape Town, the Durban edition features well-known landmarks such as Moses Mabhida Stadium, uShaka Marine World and The Pavilion Shopping Centre, among others.
    • 23 Mar 2018
      On Show Days, it's essential that you stand out from the crowd. Highlighting your home's finest features could help turn a browser into a buyer. We take a look at some tips to help you achieve the best possible result.
    • 23 Mar 2018
      After a distinctly lacklustre year during which a flood of new homes entered the market to vie for the diminishing attention of increasingly nervous investors, the housing market in Bedfordview kicked off 2018 with encouraging signs of recovery.
    • 22 Mar 2018
      Sustainability is currently a hot topic in the home and construction sector. In light of the progressing climate change and shrinking resources worldwide, it’s one of the most important issues to consider. Sustainable living is the practice of reducing your demand on natural resources by making sure that you replace what you use to the best of your ability.
    • 22 Mar 2018
      The 1% VAT increase which is set to take effect as of 1 April 2018 has set the country alight with many burning questions, most of which cannot be comprehensively answered by our knowledgeable friend Google.
    • 22 Mar 2018
      The picturesque and oft-misty town of Dullstroom in Mpumalanga belies its name. Judging by the rapidly increasing influx of weekend visitors, many of whom then look to acquire property here, it’s anything but dull, quips Anton Greeff, Pam Golding Properties area principal.
    • 20 Mar 2018
      Located close to the fast growing Fourways precinct, Dainfern continues to attract local and international interest from buyers seeking a secure lifestyle with affordable entry price of approximately R3 million.
    • 20 Mar 2018
      Property owners in the Durban CBD are addressing the affordability challenge that faces many prospective tenants in their area – and reconfiguring the inner city rental market in the process.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us