South Africans take a practical approach to buying homes
Despite challenging economic conditions during 2014 extending into 2015, there is growing interest in home purchases, indicating a strong residential market in South Africa. Whatever the reason for property interest, it remains a huge commitment.
Before acquiring or renovating a property, more South Africans are increasingly assessing all financial implications to make a decision that fits their budget and needs.
Steven Barker, head: Home Loans, Standard Bank, says South Africans are adopting a practical approach to buying homes in 2015, taking time to consider the financial advantages and disadvantages of buying, moving or renovating properties.
He says customers are making decisions only after weighing up several factors, including examining transfer and legal costs when buying a property, municipal rates, taxes and sectional title levies.
“They are assessing the cost of moving households, the implications of making physical changes to a new home and the cost of buying furniture and fittings for a new home. They are comparing maintenance costs of established homes in the suburbs versus higher-density townhouse complexes and weighing the advantages of buying a new built against an old existing home,” he says.
Barker says that where costs are considered to excessively outweigh the advantages of moving, many customers are applying for finance to improve their properties by renovating or adding on to them. He says that in the current economic environment, well-located homes close to the required amenities are getting most of the interest.
Justin Easthorpe, regional sales manager: Ooba says that buying an investment home is a big expense and that buyers are ensuring they know as much about the property and market as possible before taking this step. He says investment buyers are beginning to understand that it’s important to know what they are buying the property for, as this affects the decisions they make.
“If buying property for investment purposes, buyers realise the importance of location, as return on investment depends on demand for the property being rented out. They are also ensuring they’ll be able to rent the property out by doing internet research and speaking to a few estate agents in the area about local property price growth and rental rates, to ensure good price growth,” says Easthorpe.
If buyers are purchasing a unit in a holiday rental block, he adds, then they ask the agent for the holiday occupancy rate from the last year, to assess whether they will be able to make a sizeable return on their new property. By being informed about every aspect of their purchase, buyers are setting themselves up for a good rental return from their investment property, Easthorpe adds.