Day: July 7, 2020

Credit Original Article to Businesstech

Rapid infrastructural development coupled with a desirable lifestyle have traditionally been significant markers resulting in sustained growth of a real estate market, notes real estate firm, Seeff.

On the North Coast of KwaZulu-Natal, a consistent amount of property is continuing to be sold, even during these unprecedented times and this demand clearly underscores the persistent popularity of the area, it said during a recent webinar session of “Let’s Talk Property”.

“Hot Spotting” is considered an informed speculation of where the next ‘big boom’ location will be. In the live poll taken during the webinar, the KZN North Coast came out on top with 39% compared with the other national areas, the next closest area being the Atlantic Seaboard at 27%.

Carl van den Berg, business development executive from Private Property shared some consumer behaviour insights which showed that even during this lockdown period, people have been searching online with “intent” and one of the most searched for property sectors has been for new developments.

The North Coast has always been a popular holiday destination; however it has also reinvented itself to become an area of choice for various types of investors.

The area has enjoyed a long term track record of outperforming the average national growth statistics, and this is expected to continue due to the demographics of the people living in the immediate areas as well as the many families who are still relocating here.

Adding to other established developments, many new developments have been launched in recent times including Montcalm in Zululami, Elaleni, Zululami, Seaton Club and Springvale Country Estate all of which are contributing to the luxury of choice when it comes to secure gated environments with great communal facilities.

This type of development has also been driven by buyer preferences and the live poll from this discussion once again showed the most desirable investments being estates at 66%.

There are however several additional new developments in the pipeline one of which is Odyssey Ballito – a ground breaking mixed use precinct encompassing medical, residential, retail and commercial space which is set to add a new dimension to the local property and investment landscape.

Interest rates are currently at a historical low and this is a major driver of investment. Siphamandla Mkhwanazi stated that the banks have seen an increase in bond applications from many potential buyers and all indications are that this is a positive time for investment.

You can view the original article here: https://businesstech.co.za/news/property/409923/

Credit Original Article to Businesstech

It may now be cheaper to buy than to rent, which is good news for first-time buyers who generally struggle to gain a foothold in the property market because of challenges around affordability, says BetterBond.

“For thousands of South Africans, owning their own home has always seemed like a pipe dream. In fact, the cost of property, particularly in urban areas, is often prohibitively expensive for first-time buyers,” the group said.

However, with the onset of the Covid-19 pandemic and the shifting market conditions, things look very different now.

The four interest rate cuts this year, which brought the prime interest rate down from 9.75% to 7.25%, sets the interest rate at the lowest it’s been in over 50 years.

Since the cost of borrowing is significantly influenced by the interest rate, this record-low interest rate alone means a bond is now more affordable for many aspiring homeowners, the group said.

“The viability of buying property in the current market is best understood when one considers that the average monthly rental in the formal market is around R7,800,” BetterBond said.

The cost of a bond on both a property purchase priced at R875,000 – currently the average bond size of the first-time buyer – and R1 million, is at R6,900 and R7,900, respectively, based on a rate of 7.25% over 20 years.

“What this highlights is that the monthly bond repayment on the cheaper property is less than the average rental amount, while the bond on the slightly bigger bond is almost on par,” the group said.

	Bond A	Bond B
Bond amount	R875 000	R1 000 000
Monthly repayment at 7.25% over 20 years	R6 900	R7 900
Difference between rent (R7,800) and bond	-R900	+R100

Transfer duty, which is the tax payable by buyers and based on the value of the property, is another cost that needs to be taken into account.

Earlier this year, however, the threshold on transfer duty was raised to R1 million, which means that no tax is payable on the first R1 million. In the case of a property valued at less than R1 million transfer duty does not apply at all.

“Of course, the bond repayment is only the start of your expenses when owning property and is not the only consideration when calculating whether you have the disposable income to afford buying, or not,” the group noted.

“You also need to be able to afford rates and taxes, water and electricity, regular repairs and maintenance, and more.”

It said that, no matter the macro market conditions, affordability remains key.

“The general guideline, set by banks, is that your monthly home loan repayment should be around 30% of your gross monthly income, before tax and expenses. To this end an affordability calculator is a useful tool to determine what the monthly repayments on a loan will be, taking monthly expenses, the prevailing interest rate, and the repayment term into consideration.

“Now, more than ever, do your calculations and make every effort to Invest in your future by becoming a home-owner rather than paying off someone else’s bond,” it said. You can view the original article here: https://businesstech.co.za/news/property/411169