Weekend Argus (Saturday Edition)
DO YOUR HOMEWORK FIRST
If you want to buy property, or you are keen to leave your parents’ home, make sure you can afford the move
MANY South Africans stepped into 2019 with clear property goals to meet during the 12-month period.
Some have vowed this is the year they buy their first property, while others are ready to move out of their parents’ home and rent their own place.
There are also those who, whether renting or buying, will be looking for new properties to call home over the next 12 months.
The country’s economy is weak, and, politically, the future lacks clarity, but for many people, South Africa remains “home” regardless, so property will always be changing hands. However, numbers will dip during such times.
The number of new residential mortgages began declining in the third quarter of 2018 (July to September) following a 7% increase in the preceding three-month period, says FNB property economist John Loos.
“The key SARB Leading Business Cycle Indicator, and weaker economic growth in 2018 compared to 2017, suggested we had been due for slower growth in new mortgage lending last year, and ultimately this became the case as the year progressed.”
However, this year there may be some improvement.
“But any year-on-year growth strengthening is expected to be mild, constrained by expectation of only limited real economic growth improvement. And, of course, we go into 2019 having just had the first interest rate hike in the current cycle late in November last year,” Loos says.
Despite this decline, the Re/Max National Housing for the final quarter of 2018 (October to December) shows more than 42000 bond registrations were recorded at the Deeds Office.
These registrations are valued at R45.86billion, which is a 5.4% increase in the amount of bonds registered in the previous quarter, says regional director and chief executive of Re/Max of Southern Africa, Adrian Goslett.
Re/Max’s report also shows:
29.5% of homes sold were less than
R400 000.
25.6% were priced from R400000 to
R800 000.
24.9% were valued at R800000 to
R1.5 million.
15% were priced from R1.5m to R3m.
5% cost more than R3m.
These figures are further proof that, even in tough and uncertain times, property transactions continue, and new buyers still enter the market. Furthermore, Goslett believes the current market presents the “perfect opportunity for investors who might be able to get in before the market swings back in favour of the seller”.
Jonathan Davies, director of Tyson Properties, agrees: “This is probably a great time to buy property. Over the past few years we have seen the market contract considerably and property is now more realistically priced. Purchasing a home in this market places a buyer in a better position to make long-term growth gains.”
That said, there are still many considerations before taking this big plunge. Similarly, those who are itching to move out of their parents’ houses should weigh up the pros and cons, agents say.
No matter how strong the urge is to make a home move, or the desire to finally own a piece of real estate, these transactions are costly, and not easily remedied if a wrong decision is made.