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Getting smart at home
THE prime lending rate could increase between 0.75% and 1% this year. PICTURE: STEVE BUISSINNE/PIXABAY
INTEREST RATES ARE SET TO GO ON RISING CURRENT and prospective home buyers must budget for further interest rate increases, advises Rhys Dyer, chief executive of the ooba Group. This comes after last week’s rate increase set the tone for what is to be expected from the South African Reserve Bank this year. The prime lending rate could potentially increase between 0.75% and 1% this
year, Dyer says. However, he adds that a prime lending rate of 7.75% is “still relatively low” in comparison to the pre-pandemic level of 10%. “It’s important to remember the competition between banks remains fierce and, despite the hike late last year, the average interest rate achieved for our customers (in quarter 4 of 2021) was still prime less 0.21%.” Looking at a
sliding scale of where most home loan activity takes place, Dyer notes monthly repayments on a R1 million bond (calculated over a repayment period of 20 years) will increase by just R152 a month, while those on a R1.5m bond will increase by just R228. “A R2m bond will increase by R304 a month, while repayments on a R3m home will increase by R457.”
SMART home automation is gaining in popularity. PICTURE: CHAUHAN MONIZ/UNSPLASH
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MARTER homes are one of the key trends expected in the residential property market this year, says Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty. This is because flexibility and the new multifunction mindset have begun filtering from workspaces through to the rest of the home. “Key elements include adaptable furniture that has more than one use and progressive robotics and tech which vacuum for you and remind you when
your milk is finished. “Energy efficiency will get even smarter, thanks to near-autonomous homes that recognise you, your movement patterns and your daily habits, and foldable, rollable televisions will become commonplace.” Geffen says Amazon recently introduced Alexaenabled Astro that can find its way around, detect unrecognised people and capture video wherever you send it in the house
Now’s the time to buy
HOMEOWNERS must be sure to not to spend to much when renovating. PICTURE: IMMO RENOVATION/UNSPLASH ASPIRING homeowners should buy a property as soon as possible, even if it is smaller and cheaper than they had initially planned. PICTURE: MICHAL JARMOLUK/PIXABAY
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OUSE PRICES are up all over the country, and with inflation and interest rates also on the rise, aspiring newcomers to the property market need to buy now. This might mean their first home will be smaller and cheaper than they originally planned it to be, says Gerhard Kotzé, managing director of the RealNet estate agency group. Fortunately, many people are able to work from home most of the time now, so they
can consider a property that is further from the centre of town, where properties are generally less expensive. He says those who still need – or prefer – to be close to a city centre will find developers are back in the market with small apartments that are relatively affordable. “But whatever your preference is – and this actually goes for repeat buyers too – it is time to buy before rising costs make it difficult, if not impossible, for you to finance your home purchase.”
DON’T OVERCAPITALISE WHEN DOING UP YOUR HOME EVER since the pandemic hit, the trend for home renovation projects has increased. But Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, advises homeowners always to consider the resale value of their properties before spending a lot of money. “Even if the homeowners have no intention of selling in the near to far future, it is always advisable to consider how the renovations could impact on the resale value of the property. “Shoddy workmanship
could have a negative impact on the home’s value. Similarly, homeowners might never make their money back if they have overcapitalised on renovations.” To avoid overcapitalising, Goslett recommends having a real estate practitioner professionally evaluate the property and suggest guidelines on a potential price cap in the given suburb. Once the project has been decided on, there are several ways in which a homeowner can fund a home renovation. The first is simply to save up until they
can afford to tackle the project. Alternatively, those who have an access bond could access the funds through their home loan. Goslett says this would be one of the most affordable ways to access credit. “But, unless you’re near the end of your loan term, I would caution homeowners to repay the loan as soon as possible. Interest accumulated over a 20-year home loan period will work out to be far more expensive than a personal loan taken out over two or three years.” Those without an access bond facility could take out a personal loan to fund the project but this will be at a much higher interest rate, he says.
