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
    • 17 Oct 2017
      It is relatively straightforward to make a good property investment when the economy and housing market are booming. As the old saying goes - a rising tide lifts all boats. However, says Sandra Gordon, Pam Golding Properties senior research analyst, when the economy is struggling with low growth – as South Africa’s currently is, there are still opportunities for investments
    • 17 Oct 2017
      In recent years, residential property investment has been highlighted for its value as an income stream when the property is bond-free, especially for those owners in their retirement years.
    • 17 Oct 2017
      As technology improves, so does the level of property scams that do the rounds, and while every precaution seems to be taken, there will be yet another thing that fraudsters find to dupe people out of large sums of money, warns Johnny Henkes of law firm Henkes Nolte-Joubert.
    • 16 Oct 2017
      With Accelerate Property Fund owning a large portion of business right land and partnering with the Fourways Precinct, residents in this (and surrounding) areas can almost be assured that the plans for the improvement and development of the area will increase residential property values exponentially in the coming year
    • 16 Oct 2017
      You have done your homework thoroughly, researching the market and current trends in the area and gaining a clear understanding of the renovation process you have in mind. You are not discouraged by the time and dedication required nor the plethora of possible minefields, and you decide to take the plunge. What next?
    • 16 Oct 2017
      In the past, if a sectional title scheme appointed a managing agent, the trustees would still have to be actively involved in the decision making and management of the scheme. The Sectional Title Schemes Management Act (STSMA), however, makes allowance for a new type of managing agent – the executive managing agent - which could almost be seen as putting the scheme under voluntary administration.
    • 13 Oct 2017
      The violent storms that have swept South Africa over the past week have left many people with one question on their minds: “I wonder if my insurance will cover the damage?”
    • 13 Oct 2017
      For some Friday the 13th is one of the unluckiest days of the year and to honour this spooky day we take a look at 13 superstitions from around the world.
        
    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