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Covid-19 gave to South Africa was the lowest interest rate in the past 56 years. This has clearly revealed the pent-up demand from our less fortunate citizens to acquire adequate, affordable housing and relief from overcrowded living. It would be tragic to allow this rare window of opportunity to slip away.” He says high property prices prevent the previously disadvantaged from entering
might have taken out a large loan to purchase the home, you are essentially putting that money back into the property and will probably sell it for more than you bought it for. It is important to realise, though, your first home might not be your dream home. Start small and work your way up to the house you’ve always wanted. Property ownership helps develop sound financial management:
Investing in property makes good long-term sense for a number of reasons. PICTURE: PIXASQUARE PROPERTIES
Handy checklist for buying a home FIRST-TIME buyers should follow the following tips when looking for a home, says Grant Smee, managing director of Only Realty. Location: Choose an easily accessible area that’s either established or upcoming. Security: Be mindful of safety and security when making your purchase – this can have a significant impact on the resale value and the experience of living in the home. Exterior: Spend extra to get a valuer to check your potential purchase. Make sure the plumbing and electrics are working perfectly (internally and externally). They also need to make sure the roof, exterior walls and foundations are intact. Repairs could become very costly. Interior: Check for sun exposure, suitably sized bedrooms and easily accessible and functional kitchen and bathroom areas. Parking: Make sure that there is ample parking for guests and covered parking for yourself. Renewable energy and signal: Solar heating and
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investment in an asset: While you
the property market, which adds to their hardship. “It also leads to the growth of squatter camps, land invasions, crime and all the ills that accompany poverty.” High prices had retarded the growth of a huge secondary economic development preventing the majority from becoming proud stakeholders and productive citizens, Kolnik says.
Many first-time buyers now qualify for home loans, thanks to low interest rates. PICTURE: COTTONBRO/PEXELS
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LOW INTEREST RATES A GIFT FOR BUYERS DURING the Covid-19 pandemic, homeowners have been selling properties at around 30% below their market value. Harold Kolnik, principal of Jawitz Properties South Peninsula, says this, coupled with low interest rates of about 7.5%, opened up a whole new market for sellers to sell to the many first-time buyers who could now afford to buy property. “The greatest gift that
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THE UNPRECEDENTED low cost of borrowing, coupled with the major banks’ appetite to take on low or no-deposit loans, has created an ideal home-buying environment, particularly for first-time buyers.
And home ownership, says Shaun Rademeyer, chief executive of MultiNET Home Loans, makes “good long-term sense”. This is why: Owning a property is an
The strength of many wealthy people is their ability to budget and save their money. Owning a house means you are forced to make monthly payments. When it comes to drawing up your budget, make sure that the home loan repayment is one of the top priorities Eventually the good will outweigh the bad: Initially, the capital
outlay for a house may seem excessive, however, as the years go by, the loan will decrease and the appreciation in value will increase.
IT’S NOT JUST THE PRICE YOU HAVE TO WORRY ABOUT
Check for sun exposure when buying your first home. PICTURE: LADY EMILLIA / PEXELS
generators are key purchasing factors for some home buyers. Be sure to check for signal strength and fibre connections, where possible. Storage: Make sure there is enough storage space or at least enough space for you to buy a few more drawers and cupboards, if needed. Kitchen: Check that the appliances work, there’s enough space for your appliances, sufficient storage space and that everything is accessible.
New homeowners need to be aware of a few things that will directly and indirectly affect their finances. RODNAE PRODUCTIONS / PEXELS THE PROCESS of purchasing one’s first home provides a steep learning curve but there are other concerns for first-time buyers, says Adrian Goslett, chief executive of Re/Max of Southern Africa. These include the deliberations of the national Monetary Policy Committee, which meets every two months to decide on the prevailing repo rate, on which banks base their home loan interest rates. “Historically, the committee usually adjusts interest rates by around 25 basis points, which means that homeowners’ bond repayments could fluctuate
slightly over time.” Another aspect of homeownership of which first-time buyers are probably unaware, says Goslett, is the General Valuation (GV) Roll which is used to calculate a household’s municipal rates. The roll is valid for a period of four years and is presented to the public for inspection before any new rates are implemented. “Homeowners will need to check if they agree with their property’s valuation in the roll, as this will have a direct impact on how much their municipal rates will be.” First-time buyers should also
be aware of the finance minister’s annual budget speech and listen for any announcements that could affect their income. “Announcements that would have a direct impact on homeowners include any changes to the transfer duty threshold and capital gains tax, as this will affect the costs of buying and selling property in general. “Other indirect impacts include changes to the income tax brackets, VAT and other taxes, as this will impact a household’s income which might affect one’s ability to afford the bond instalments,” he says.
