The South African property market has seen an upswing in homebuyer activity after May 8 general elections, and this coupled with competitive lending conditions and lower inflation figures presented an advantage for first-time buyers, real estate firm Leadhome said on Wednesday.
“It is most definitely a buyers’ market and while the property market has remained fairly flat, this is good news for first-time buyers seeking to invest,” said Leadhome CEO Marcél du Toit.
“As a first-time buyer, you are spoiled for choice, which means you have the upper hand to ‘shop around’ to find a suitable home at a good price.”
The second quarter of 2019 saw a spike in offers to purchase and strong interest from first-time buyers.
Buyer demand returned with a 10% increase in portal inquiries from mid-to-end May, compared to the beginning of the month, said Romy Zwiers, head of marketing at Bondspark, Leadhome’s bond originator.
“Buyers who were holding off prior to elections, feeling reassured by the stable prime lending rate were more likely to submit their bond applications,” Zwiers said.
“We are also seeing a lot of first-time buyers entering the property market, who are looking to take advantage of favourable lending rates, where banks are more receptive to giving 100% home loans than previous years.”
The ongoing trend of vigorous competition among banks to make home loans more accessible has worked in buyers’ favour, Leadhome said.
Due to lower deposit requirements and competitive interest rates, a significant window of opportunity for prospective homeowners has been opened.
In addition, South African consumers could soon spend considerably less on loan repayments should the South African Reserve Bank cut the prime lending rate on Thursday as some economists expect.
“A difference of just 1% interest rate can have a huge impact on the client’s pocket in terms of their monthly repayments,” said du Toit.
First-time buyers and young professionals are particularly active in the lower residential property price brackets where new developments and even more established suburbs, offer good value.
Despite current concerns around South Africa’s economic growth, property still provides a solid investment.
“Buying a property requires a long-term outlook, which means the asset will provide good returns in the long run,” said du Toit.
“The fact that banks are also open to granting 100% loans is also a clear indication of the banks’ confidence in the property market picking up.”
– African News Agency