South Africans Are Prioritsing Home Buying

South Africans Are Prioritsing Home Buying

Private Property South Africa
Press

South Africa’s real salary increases are set to rise by only 2,5% in the year ahead and credit of all kinds, not least for mortgage bonds for housing, is now harder to obtain. Nevertheless there are signs that South Africans are once again prioritizing home buying and are prepared to save to get the necessary deposits and legal fees. Furthermore, for the first time in a long while, they are more aware of all the extra costs involved in purchasing a home.

This view, which was expounded recently by Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, has recently, in many respects, been corroborated by two other South African bond origination companies.

“Like them,” said van Alphen, “we have witnessed an encouraging growth in the size of bonds – at roughly 16% year-on-year. We have also seen a high percentage of our clients being first time buyers: 45% were in this category in the last quarter of 2012.

“In addition, we have also seen an increased ability to find the 10 or 15% deposits which are more frequently called for now that 100% bonds are becoming harder to get these days. On top of all these encouraging statistics we have also seen an improvement in our bond approval rates, from 62% in the last quarter of last year to 65% in the first quarter of this year.”

The increased bond approvals, said van Alphen, can be attributed to better pre-valuing by his team and to a far greater awareness in the public’s mind of the importance of cleaning up their credit records before applying for a loan.

Rawson Finance’s status analysis, said van Alphen, ties in closely with that recently published by the May/June issue of the Property Professional. This showed, among other things, that:

The Western Cape is still the province where residential property prices are the highest in South Africa – according to Absa’s latest housing review the nominal house prices for the first quarter of 2013 was R1,138,884 in Gauteng and R1,250,884 in the Western Cape.

Buyers are becoming younger: some 55% of all buyers are now in the 26 to 45 year old age group, and

• The time taken to get a bond approval has now been shortened from six. days on average in the last quarter of last year to three days in the first quarter of this year.

“Although it is far too early to talk about a revival in the residential property sector, it is clear that South Africans are becoming more conscious of the value of property investment and have adjusted to the more difficult conditions imposed by the National Credit Act and the banks,” said van Alphen. “In our group this has enabled us to budget for a 25% increase in bond financing in the next 12 months.”

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