Easier bonds boost southern suburbs sales

Show house activity is up and sales numbers are improving in Cape Town's southern suburbs following a bank decision to accept home loan applications not only from borrowers with cash deposits but also from those who can produce collateral security.

Denis Quayle, principal of leading Edgemead agency Harcourts Maynard Burgoyne, says there has been "a definite increase in demand" since Absa announced recently it would consider collateral such as stocks, bonds, merchandise and real estate as security for home loans.

"What this means is that relatives or friends, or borrowers themselves, can offer alternatives to cash as security for a home loan, and receive favourable consideration from the bank - provided of course that they will be able to afford the repayments in terms of the National Credit Act.

This provides prospective buyers with an alternative to accumulating large cash deposits, he says, and is motivating many people in Edgemead and other southern suburbs to look again at buying their own homes, he says.

"These are popular areas with families who want to be close to the good schools located here. Three-bedroom, two-bathroom homes are the most popular and there is also demand for flats to accommodate students attending university or technikon.

"And it seems that many parents or other older relatives are ready to provide collateral so that young buyers can achieve home ownership."

Meanwhile, Quayle says that development in the southern suburbs has largely been put on the back burner, so prices are generally holding their own, although some properties are being sold for less than current market value at foreclosure auctions.

ISSUED BY HARCOURTS AFRICA

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