New housing development in Kimberley, the capital of the Northern Cape, has come to a standstill and first-time buyers are being shut out of the market.
Kobus van der Walt, owner of the Aida franchise in the city, says there is huge pent-up demand, and that buyers are “queuing up” to get their hands on any units that do become available now in housing projects that were approved before December 2008, when a moratorium was imposed on any new development in the city.
And yet, he notes, it is difficult to finalise sales in this price category because of the banks’ extreme reluctance to approve 100% home loans. “The 104% loans that are spoken about apply only to people with a household income of less than R15k who are purchasing a home for less than R450k.
“Other young people and first-time buyers who don’t have the cash for a deposit of at least 10% and transfer costs are thus caught in a vice currently, between a lack of new stock at the right price and lack of finance for units at higher prices.”
Not surprisingly then, Kimberley’s most active market sector currently is the middle-income suburbs, where the average house price now stands at around R900k – and where many of the sales taking place are to second and third-time buyers who are able to pay cash or put down sizeable deposits.
As to the future, Van der Walt says the current situation as regards first-time buyers is unlikely to change much until the moratorium is lifted. “This will only be when the local authority has spent hundreds of millions of rands on repairing and upgrading the city’s bulk infrastructure, especially its overworked and dilapidated waste-water and sewage treatment plants.”
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