Good News for First Time Homebuyers
The repo rate remains unchanged, providing comfort for those wanting to purchase a home as well as those with existing mortgages.
This is according to Dr Andrew Golding, chief executive of the Pam Golding Property group.
“Furthermore, the prognosis seems to be that the repo rate is likely to remain stable for the remainder of the year, with the possibility of an interest rate cut in 2018 or even at the end of 2017.
Naturally, socio-political factors and perceived risks around what transpires regarding US interest rates and other macro-economic influences, bring pressure to bear on the rand, the economy and investor confidence in South Africa in general.
However the fact that interest rates remain steady is particularly welcome news for consumers who are feeling the pinch of ever-rising costs, a factor which is most evident among those gaining a foothold or already on the lower rungs of the residential property ladder, which brings us to another important point.”
No transfer duty
With inflation contained and small green shoots of growth becoming evident in the economy, one of the most positive takeout’s from the recent National Budget is the potential for home buyers in the price range up to R900 000, given the increase in the transfer duty threshold.
First time home buying
This shift in the transfer exemption from R750 000 to R900 000 was we believe not only long overdue, it could also potentially have a significant impact on the market, stimulating first-time buying through increased affordability, and creating a positive ripple effect through all levels of the market.
Property buying in South Africa
While it is probably too soon to be able to gauge an immediate impact on the volume of property purchases in South Africa, given that sales transactions from the point of signing the offer to purchase through to actual transfer of the property take several months, it is interesting to note recent data from ooba.
How you can save buying a home for the first time
The average price of a home purchased by a first time buyer has over the past two years, ie since early 2015, increased from R750 000 to R900 000. This means that the saving in transfer duty – supported by the stability in the repo rate – has the potential to stimulate further buying in this price band, among both new buyers as well as those upgrading from existing homes. This in turn will filter through the marketplace, helping mitigate the relatively moderate growth experienced in the market over the past year.
Ready to begin looking to buy your first home? Have a look at our properties for sale and even work out what you can afford, along with how much it will cost you each month here.