SA Property Market – Nail biting sellers and good buyer opportunity
DURBAN (October 27) – If you intend purchasing a home with the surety of owning it for more than three years, if you believe that interest rates have neared their peak and if you can scramble sufficient capital to commit, then now’s a near perfect time to land yourself into a profitable property ownership, according to home loan expert Brad Sparks.
Addressing a RE/MAX awards seminar in Durban this week, Sparks, who heads up BetterBond’s KZN division, pointed out that with current property values dipping some 20 percent nationally, stock levels at a seven year high and truckloads of nail-biting sellers the market is ripe with good buyer opportunity.
Also favouring the current timing, and this comes from a general consensus of the four major banks, is their expectations of house prices thumping upwards by between 60 to 70 percent by 2011.
The single biggest factor currently dominating purchasing, according to Sparks, was uncertainty on future interest rate patterns. Some oil had been poured on troubled water by the MPC leaving interest rates floating at their last two meetings and slithering oil prices from $140 to around $80 a barrel. Further stability on rates was being punted by informed economic views of their softening early next year. But, while of some comfort, he warned both were fragile assumptions that should be treated with caution.
Unless buyers were absolutely confident of their new home ownership spanning more than three years and their financial ability to cope with possible further upward rate adjustments he advised aspirant home owners to be conservative in their commitment or, “better still, take the traditional approach to purchasing.”
That time-honoured approach involved saving a deposit based on a frugal, often deprived lifestyle and even living with family before committing to tiny properties. A preparedness to enter the market on the lowest rung of the property ladder was essential with progress to that eventual dream home financed by patience in accruing equity toward that home.
Progress to the ultimate home had been tirelessly trammelled by earlier generations and achieved only after many years of sweat and self-denial in building deposits and transfer costs.
Sparks also believed especially first time buyers should seek financial support from parents in terms of generating deposits or guarantees. Sourcing deposits from “old money” had been a popular gateway in the past and had more recently increased in fashion. However, it was important for borrowers to bear in mind that these were business relationships carried strong social responsibility and should impose no risk on the borrower.
Continuing the theme, Jeanne van Jaarsveldt, assistant regional director of RE/MAX, said the group were concentrating on home ownership of first time buyers, many of whom looked at ownership through rose tinted glasses, totally unaware that it could be an extremely bumpy ride and only sustainable by personal sacrifices. Personal concessions were even more poignant in the wake of the National Credit Act that carried serious long-term credit consequences for those who failed.
But while ownership was undoubtedly scary for first-timers it also offered the most promising form of long-term financial reward and security, but it should also be made clear this was commensurate with length of ownership.
Courtesy: BetterBond KZN
Writer: Rodney Hayter (Property Reporter)
For further information, please contact:
Bradley Sparks, BetterBond KZN,
Tel: + 27 (31) 209 8585 (W) / +27 73 666 3842
Email: [email protected]