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Homes priced from R700k to R1.8m now ‘hot property’

31 Oct 2019

If you are selling in the middle-income sector between R700 000 and R1.8 million, then you're better off than most other sellers.

This two bedroom apartment in Lonehill, Sandton, offers a covered terrace with views and access to a clubhouse with communal pool. It is selling for R1.35 million - click here to view.

This is according to Samuel Seeff, chairman of the Seeff Property Group, who says that deeds office data show that over 80% of current property transactions fall below the R1.8 million 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. “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,” says Seeff.

This two bedroom apartment in Fourways, Sandton, is close to many amenities. It is on the market for R860 000 - click here to view.

“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 home loan approval rate at 83.4%, which is 3.4% higher compared to the same time last year, with 91% of banks now granting home loans within five days. Deposit requirements are down to around 10% and 11%, but first-time buyers are often able to find a better deal.

This three bedroom, two bathroom townhouse in Douglasdale, Sandton, has a newly-renovated kitchen, patio and well-manicured garden. It is selling for R1.699 million - click here to view.

As a further boost to this sector, various banks have launched home loan products for degreed professionals. The most recent is Absa, offering 105% bonds to a maximum price of R1.5 million to first-time buyers with a four-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.

This three bedroom, two-and-a-half bathroom apartment in Amanda Glen, Durbanville, has a study and patio overlooking a lovely garden. It is selling for R1.75 million - click here to view.

Seeff says 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:

1. 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).

2. 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% to 4.3% range (except for Durban which is at 5.2%).

3. 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 get home loan financing, especially if they are a degreed professional.

If you are buying in this market:

1. It’s a buyer’s market

Seeff says 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.

2. 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 buyer, especially a degreed professional, then be sure to look into the new products launched.

Calculate how much you can afford here.

3. Do your homework

Especially insofar as prices are concerned, and don’t over pay. Always buy the best you can afford in a good area, 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.

Start the search for your dream home here.

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