‘Cheaper property prices’ and best home loan approval rate in 12 years
Despite weak economic fundamentals resulting in negative real house price growth, the banking industry continues to show confidence in South Africa’s property market by further relaxing their lending criteria and approving home loan finance at levels last seen 12 years ago.
Third quarter (Q3 19) statistics released by bond originator ooba show that year-on-year from Q3 18 to Q3 19, the growth in the Average House Purchase Price flatlined, with a 0% increase. The Average Purchase Price for Q3 19 is R1 193 944 compared to R1 193 601 for Q3 18, continuing the trend of negative real growth in the local residential property market. ooba’s Q3 19 statistics also show 0% growth in the Average Purchase Price for First-Time Buyers.
The positive news about negative real property price growth is that property is now more affordable for buyers, says Rhys Dyer, CEO of ooba. “Cheaper property prices in real terms coupled with rising stock levels as house sales slow down means buyers are able to find good value for money.”
What to consider when buying fixer-upper property
A fixer-upper - generally defined as a property on the market in need of repairs and maintenance - often presents a good deal on price.
“Fixer-uppers are generally where you find the property bargains, and if you see past the problems and focus on the potential, it may just be your lucky day,” says Silvana Dos Reis Marques, Manager at Leapfrog Pretoria East.
Dos Reis Marques says there are a number of factors to consider when buying a fixer-upper:
1. Location, location, location
The holy grail when it comes to property, location is even more important when buying a fixer-upper. “Go for a fixer-upper in a desirable, well-maintained area. In other words, opt for the worst property in the best area, rather than the best property in the worst area,” says Dos Reis Marques.
Falling short on your home insurance can have dire consequences
Homeowners grudgingly fork out for insurance every month, consoling themselves that at least if something does happen, they are covered, but many don’t realise that they are, in fact, underinsured - and unfortunately most will only find out once it's too late.
This is according to Jill Lloyd, a veteran agent and area specialist for Lew Geffen Sotheby’s International Realty in Rondebosch and Claremont, who has witnessed the repercussions of being underinsured on a number of occasions.
“This is especially common among older homeowners who have often not updated their insurance policies in many years and, as they are often on a fixed income from pension by then, it can be financially crippling, if not devastating, when the payout falls far short of the replacement value,” says Lloyd.
“The elderly often have no idea how much their homes are worth. They probably paid about R44 000 for it in the ‘70s and, as they are convinced that they are going out feet first, they are ill prepared for something like fire.”