Slow municipal processes hurting property and finance sectors
Delays in municipal building clearance and rates clearance certificates are impacting more than just the building industry. Bridging finance and other lenders are experiencing added complications and delays as developers and individuals continue to be frustrated by red tape and ineffective municipal systems.
“We have heard from a number of clients that there are ongoing delays with building and rates clearance certificates,” says Gary Palmer, CEO of Paragon Lending Solutions.
“These delays are slowing down the sales and transfers of properties and impacting loan settlement times. The knock-on effect is that the whole deal cycle is moving slower than it should, which is bad for the economy in general and the property development market in particular. It’s time for decisive action to be taken.”
How long does the home loan approval process take?
First-time home buyers and owners who are eager to sell often wait in anticipation to get feedback from the bank on the status of a home loan application.
Stanley Mabulu, Channel Management Head at FNB Home Loans, says the amount of time it takes for a home loan application to be approved often depends on several factors, impacting both the bank and customers.
“Ideally, it should take a minimum of one week to get complete approval, however, due to application backlogs, delays or customers not meeting certain requirements, the process can be delayed for at least two to four weeks at most,” adds Mabulu.
He unpacks the time it normally takes a bank to grant a 100% home loan to a customer with a good credit profile, provided there are no interruptions:
Revealed: The actual costs of buying property vs renting
A tenant paying rent will soon start making the calculations and find out that over 20 years rental of R10 000 per month that escalates every year with 10% will cost around R5 491 435 in rental paid during that period of time.
If a home loan is paid off over the same period of time, it would leave the homeowner with a paid-off property plus a value worth a few million rand. “Many tenants feel they are trapped renting forever due to the high hurdles to enter the property market, yet they do not realise the longer they wait, the more difficult it becomes to get your foot in the property ownership door,” says Meyer de Waal, a property attorney.
Gauteng landlords have ‘unrealistic expectations’
There are currently many reports of vacant rental homes and units around Gauteng – and the main reason for this is that “landlords are unrealistic in their price expectations”.
This is according to Seeff’s licensees in the province who, in most of the major metros, agree that the rental market in Gauteng is extremely competitive and if a rental property is not priced correctly, it will in all likelihood remain vacant.
How much does it actually cost to sell a property?
Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
“It is important to understand that there are a number of costs involved in selling a property, which the seller needs to plan and, in some cases, budget for,” explains Bruce Swain, CEO of Leapfrog Property Group.
The selling costs can be divided into five main categories, each of which include a number of costs that may or may not apply.