The recent 2010 National Housing Pulse Survey conducted by the National Association of Realtors (NAR) in the US found that almost eight out of 10 respondents believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. The survey, which measures how affordable housing issues affect consumers, mirrors sentiment among buyers and sellers in the South African market. For example, in the US, job security concerns are the highest in eight years of sampling, with 70% of Americans saying that job layoffs and unemployment are a big problem in their area. Eight in 10 cite these issues as a barrier to homeownership. However, despite economic uncertainty, 68% of those surveyed still believe now is a good time to buy a home. Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market. Again, this trend is mirrored in South Africa, with our interest rates at an all time low. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40% said it was one of their highest priorities. Despite improved affordability, 79% of respondents still consider having enough money for down payment and closing costs to be among the biggest obstacles to buying a home. Another obstacle is a lack of confidence in their ability to be approved for a loan, reported by 73% of respondents. Locally, the banks have relaxed their lending criteria somewhat, and in some instances lower deposits are required. Current market conditions mean those looking to buy property should make a move soon. Here are the top reasons why you should invest in the housing market now: Low interest rates: When Reserve Bank Governor, Gill Marcus, cut the interest rate from 10% to 9,5%, it marked the lowest interest rates that South Africa has experienced since mid-1974. The rate cut will benefit the affordability of housing against the background of property prices rising by more than 10%, year on year, in the first eight months in 2010. Due to lower interest rates, bond repayments will be lower and consumers will be able to qualify for marginally higher loans when buying a property. The large amount of distressed properties: Due to the high levels of distressed property on the market, the asking prices for residential real estate have dropped and there are a lot of bargains to be found. The banks have engaged with local realtors to assist in the sale of distressed properties, with the aim of selling these homes at market related prices as quickly as possible. The selling prices of distressed properties are usually within 10% to 15% of the market value, providing a win-win situation for both buyers and sellers – buyers get a good bargain, while sellers are able to sell the property, nullify their debt and avoid a bad credit record by being blacklisted. A better level of professional service: The number of estate agents contracted by more than 50% during the economic downturn, and even more are expected to leave over the next few years with the approach of the deadline for obtaining the new agent qualifications required by law. The implication of this for consumers is that they can increasingly expect highly professional service from only the top performing and best qualified agents that are left behind. An inflation-beating and sound long-term investment: Economists are predicting that nominal house prices will rise by 12,1% in 2011 and 12,7% in 2012. This is a huge cry from the heydays of the property boom, but it is an indicator of a healthier and more sustainable market. Over and above this, the more volatile the JSE Securities Exchange becomes, and as the Eurozone and US debt problems are predicted to worsen over the next three or so years, the security that property assets provide will become increasingly attractive to the average man-in-the-street investor. The South African residential real estate market has made great strides over the last year, but it remains a buyers’ market and there are still a lot of opportunities out there for savvy buyers. The remains that property is a less risky investment than shares, with inflation-beating returns over the long-term practically guaranteed. So if you have access to credit or cash, now is the time to buy property.
Top Reasons Why You Should Invest In Property Now
Private Property South Africa
Looking to sell your home?
Advertise your property to millions of interested buyers by listing with Private Property now!List your home privately
Things are looking up for first time home buyers
8 stylish colour trends for the bathroom
Sushi Burrito and Co
Area guide to Dullstroom, Mpumalanga