Even as SA’s economy floundered last year, the real estate market gained many new participants as large numbers of young people went ahead with their plans to stop renting and buy their own homes.
“In the coming months they should continue to do so because owning a home is almost always preferable to renting,” said Carl Coetzee, from BetterBond.
It is better to start paying off your own home, which will become an appreciating asset in your name, than to keep renting, which is effectively just helping to pay off someone else’s property.
The sooner you buy, the sooner you can start generating savings. It is possible to use your home to earn extra money in the short-term. When you own a property, you can rent out a spare room, garden cottage or storage space to bring in additional income.
A home will help you build personal wealth in the longer-term. The value of the property will keep growing while the amount you owe on your home loan keeps decreasing and after a few years.
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When you buy a home, you can redecorate, renovate and improve it as you please. You can, for example, install insulation, a solar geyser and rainwater tanks to make it more energy-efficient and eco-friendly, without having to ask anyone’s permission.
By the time you are ready to retire, your home will hopefully have been paid off, so you will have complete security of tenure. You will not have to worry about the cost of your accommodation rising, in terms of rent increases, at a time when you may very well be living on a fixed income.
The sooner you buy, the easier it will be to finance your home purchase. At the moment, for example, you will definitely need less income to qualify for a home loan than you will need in a year or two, when home prices will be higher.
“In short, home ownership gives consumers a range of financial and wealth creation options that renting simply cannot provide, and the sooner you start to access those, the better for your financial future,” said Coetzee.
• Information supplied by Private Property.
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