If you are selling in the middle-income sector between R700 000 and R1.8 million, then you are better off than most other sellers, says Samuel Seeff, chairman of the Seeff Property Group. Deeds office data shows that over 80% of current property transactions fall below the R1.8m price mark although it comprises less than half of the total value generated in the market.
This is good news for urban area sellers in particular. Seeff says that the biggest boost for the middle-income sector has been the much improved mortgage lending climate and that current bank approval rates are simply unheard of in recent times and we are seeing the best loan-to-value rates since 2015. Buyers who are still wondering whether it's a good time to buy, should really make their move because we don't know how long this phase will last.
Ooba recently reported its bond approval rate at 83.4% which is 3.4% higher compared to the same time last year with 91% of banks now granting loans within 5 days. Deposit requirements is down to around 10%-11%, but first time buyers are often able to find a better deal.
As a further boost to this sector, various banks have launched mortgage products for degreed professionals. The most recent, is ABSA who is offering 105% bonds to a maximum price of R1.5m to first time buyers with a 4-year degree at NQF level 8 or higher. The additional 5% is to cover transfer and registration costs and there is a discount on attorney bond registration costs (restricted to the ABSA panel) along with various additional benefits.
Seeff says that it's definitely the best time to buy in years. The interest rate has remained favourable while the weak house price growth, generally still below the CPI inflation rate, means that prices have remained fairly flat over the last two years supporting affordability which is so important to this sector of the market.
If you are selling in this market
Note that buyers still take their time to make decisions. The average time that it takes from listing to sale date is at around 14 weeks - about 13.5 for the Cape metro and 11.4 to 14.4 weeks for the other metros (16.1 weeks for Durban).
Watch your price. Although there is more demand, Seeff says this sector is price sensitive and you need to bear in mind that price growth has remained flat. At a national level, it is around 3.8% which is below the CPI inflation rate. In the Cape metro, it dipped to 0.5% by mid-year while the other metros remain in the 1.5%-4.3% range (except for Durban which is at 5.2%).
Most buyers in this sector require finance. Where this might have been an impediment to a sale, the improved bank lending climate means that it should in fact now be a plus-factor as qualifying buyers will find it a bit easier to find mortgage finance, especially if they are a degreed professional.
If you are buying in this market
It's a buyer's market. Seeff says that it is still one of the best times to buy and there is generally still plenty of good stock to choose from. Don't leave it too long though because the market could start turning if the economy takes off.
The banks are keen. Provided you qualify in terms of affordability and have a good credit rating, you should find it much easier to secure finance for your property purchase. If you are a first time buyers, especially a degreed professional, then be sure to look into the new products launched.
Do your homework, especially insofar as prices are concerned and don't overpay. Always buy the best you can afford, even if it is the smallest house in the best street or neighbourhood. If you are looking at a new neighbourhood, be sure to check out the amenities such as schools as well as access to transport networks and time spent in traffic.
Issued by Seeff PR, Gina Meintjes, telephone 079 886 4802 or email gina.meintjes@seeff.com.