South Africans are adopting a practical approach to buying homes in 2015: they are taking the time to consider the financial advantages and disadvantages of buying, moving or renovating their properties, according to Standard Bank.
Despite the challenging economic conditions that prevailed during 2014 extending into 2015, there is a growing interest in home purchases, indicating that the residential market is strong.
“However, buyers are carefully evaluating all the costs involved before taking the major step of acquiring their first home, moving into a new home or moving up the property ladder,” says Steven Barker, Head of Home Loans at Standard Bank.
Ultimately, Standard Bank customers are making buying decisions only after weighing several factors.
· Examining the transfer and legal costs involved in buying a property.
· Considering municipal rates, taxes and sectional title levies in their ‘affordability’ calculations.
· Assessing the cost of moving households.
· The implications of making physical changes to a new home.
· Buying furniture and fittings for a new home.
· Comparing the maintenance costs of established homes in the suburbs versus higher density townhouse complexes.
· Weighing the advantages of buying a newly built home or an old existing home.
“Where these costs are considered to be excessive and outweigh the advantages of moving in the eyes of potential buyers, many customers opt to apply for finance to improve their properties by renovating or building additions,” says Mr Barker.
“Prices obtained in established suburbs generally weathered the downturn well, with property values exceeding inflation during 2014. They will probably continue this performance throughout 2015. As is to be expected in the current economic environment, the majority of interest is being displayed in homes that are well-located and close to the amenities that customers require.
We expect the trend of first time home buyers to continue as interest rates are still low enough to encourage people to take their first step onto the property ladder.
“Further activity can be anticipated in this arena as the market develops during the year,” says Mr Barker. “South Africans continue to place a high value on home ownership. Secure tenure and ownership are becoming increasingly important and will bolster activity in the residential sector of the property market for some time to come.”