Buy right in 2010, agency chief ad­vises

Weekend Argus (Saturday Edition) - - PROPERTY -

GET ON the prop­erty lad­der, but don’t aim too high at first, says Tjaart van der Walt, chief ex­ec­u­tive of the RealNet prop­erty group.

“Al­though re­turn­ing con­sumer con­fi­dence is giv­ing the prop­erty mar­ket a boost, full eco­nomic re­cov­ery is still a way off and we don’t think 2010 will be the year to make risky com­mit­ments. Now is un­doubt­edly a good time to buy a home be­cause prices are down and peo­ple can af­ford them more eas­ily t h a n l a s t y e a r. H o w e v e r, i t i s ab­so­lutely not the time to buy more home than you need.”

Rather, he says, those buy­ing now should bud­get con­ser­va­tively to en­sure they will still be able to af­ford their bond re­pay­ments even if in­ter­est rates rise by a few per­cent and even if their in­come stays the same this year.

“This sort of plan­ning brings peace of mind and will al­low you to re­ally en­joy your new home, in­stead of fret­ting about fi­nances and per­haps com­ing to re­gard it as a bur­den or a bad buy. What is more, it is likely to make it much eas­ier for you to ob­tain a home loan in the first place.”

Van der Walt says the past year has re­ally fu­elled the trend to­wards liv­ing more sim­ply and care­fully, which has re­sulted in most work­ing peo­ple cut back their spending on cars, fur­ni­ture, en­ergy and fuel, restau­rant meals and even gro­ceries.

“And we be­lieve this con­ser­va­tive ap­proach should also ap­ply to home pur­chases. Own­ing a home is one of the best ways to start build­ing wealth, but con­sumers need to re­mem­ber that wealth is gen­er­ally built over time – and will ac­tu­ally grow bet­ter if you’re not in so much debt that you’re strapped to make the pay­ments ev­ery month. For ex­am­ple, if you have ex­tra cash, you can use it to pay off your bond faster, and grow the eq­uity you have in the prop­erty more quickly than by re­ly­ing on prop­erty price in­creases.”

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