select
|

Marked increase in mortgage-dependent buyers

The past few months have seen a noticeable return of mortgage-dependent buyers to the Cape’s residential property market. 

So says Laurie Wener, Pam Golding Properties’ (PGP’s) MD for the Western Cape region, which includes the greater Cape Town metropolitan area. She says after a long period in which PGP has seen concluded transactions mainly dominated by cash buyers, in late 2013 and early 2014 there has been a resurgence of buyers entering the market with bond finance required to secure their purchase. However, this has not diminished the number of cash buyers still active in some areas.
 
“These mortgage-dependent buyers are mainly purchasing in the R3 million to R8 million price range,” says Wener, “with a typical loan to value ratio of around 50 to 60 percent. They include a number of family buyers, both existing Capetonians and those relocating from up-country provinces, who are looking to purchase homes in areas close to high-quality schools and well-established infrastructure. These include the Southern Suburbs and Atlantic Seaboard, as well as the Western Seaboard, where the beachfront lifestyle and value for money are seen as key appealing factors.”
 
Wener says the surge in mortgage-dependent buyers is a sign of confidence in the recovery of the residential property market, as well as indicating a slight easing of financial institutions’ lending criteria. Figures from mortgage originators ooba seem to bear this out, with their “oobarometer” for March 2014 pointing to an effective bond approval ratio of 68.2 percent – an increase of just under two percent year on year. Meanwhile ooba’s average purchase price has also show strong year-on-year growth of 8.3 percent, bringing this figure to R978 637 in March 2014.
 
“The improved access to mortgage finance and heightened activity from mortgage-dependent buyers only further entrenches our sense that the market has entered a positive growth phase,” says Wener. “Banks appears to be gaining confidence in lending, which is good news for all categories of buyers, and most especially for first-time buyers wishing to gain a foothold in the property market. The fact that this growth trend is being noted despite the recent interest rate hike, makes it all the more encouraging.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Mar 2017
      Many 25 to 35-year-old millennials would love to buy their own homes – but don’t have the earnings, steady jobs or credit records needed to qualify for home loans and so have no choice but to keep renting.
    • 23 Mar 2017
      A home is the biggest financial asset most South Africans will ever possess, but what happens to that home when the owner passes away?
    • 22 Mar 2017
      There has been a mild improvement in the buying of secondary homes, such as holiday homes, homes for use by a relative and buy-to-let homes, in line with signs of an improved economic environment.
    • 22 Mar 2017
      If you’re renting a property, as either a tenant or a landlord, you should be quite familiar with the concept of incoming and outgoing inspections – they are, after all, required by law under the Rental Housing Act.
    • 20 Mar 2017
      The valuation of a property is one of the key factors in determining how long it remains on the market and for a seller it’s crucial that an accurate, market-related price be ascribed to a home, which means that the highest appraisal is not necessarily the best appraisal
    • 20 Mar 2017
      When putting one’s house on the market the primary objectives are usually selling your home quickly and efficiently and, hopefully, at a price that ensures you make a profit.
    • 18 Mar 2017
      The level of homes being resold at values below their previous purchase price has risen mildly in recent months, but still remains moderate by historic standards.
    • 17 Mar 2017
      Buying your first home is one of the most exciting times of your life, but there’s no denying the stress factor of such a huge financial commitment. With those monthly payments looming, having any extra cash in the bank might seem like a distant dream, but with a little work and a lot of creativity, it could be easier than you think!
        
    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