Affordable homes selling for less than R700 000 are reportedly aiding the residential property market in KwaZulu-Natal, according to estate agents.
Gavin Shepstone of Rawson Franchise for Montclair in KwaZulu-Natal says sales in the affordable price bracket have increased.
Buyers are snapping up homes priced from as little as R250 with an average price of about R560 000 in Umlazi.
In a recent report by FNB, the bank noted that small-sized segment’s home price growth mildly outperformed the more expensive medium- and large-sized home price growth rates.
Shepstone’s areas include Yellowood Park (some homes are valued up to R2 million in this area), Woodlands, Sea View, Belair, Woodhaven, Chatsworth and Umlazi, with the majority of homes priced below R700 000.
“We note a rapidly growing demand for more affordable homes and a clearly discernible trend to move up the scale to more expensive but still affordable homes.”
He says homeowners continue to sell in Umlazi so as to be able to buy in more expensive areas.
First-time buyers are particularly driving demand for homes in Umlazi resulting in a serious shortage of properties priced between R500 000 and R700 000.
Shepstone explains that this is seemingly a trend with other small agencies in South Africa who serve the lower to middle income areas who also find obtaining home loans a challenge.
“The problem is that we are often dealing with people who are new to the whole world of commerce and banking.”
He says in most respects reliable and hard working, their credit records will frequently show a missed HP or account payment under the National Credit Act, which then disqualifies them from obtaining further credit.”
This three bedroom house in Sea View, Durban is in a quiet cul de sac and priced at R765k - view here
In this situation, the estate agent has to coach and educate their client into adopting new income management habits, the result of which will be that his debts are paid on time, he says.
“When this is done for at least six months, it is often possible to reinstate the applicant with the bank and get him his loan.”
To complete the deal, this may involve also getting a short-term personal loan (often from another bank) to fund the deposit and the transfer and ancillary costs.
He says recently these have been available from the likes of Nedbank albeit on a limited basis.
Shepstone adds that the effort and time put into educating would-be homebuyers pays off three or four years later when they upgrade, as they will use the estate agent who helped them initially. – Denise Mhlanga