If a property purchase is not on your Christmas wish list, it should be, says Samuel Seeff, chairman of the Seeff Property Group. It is still one of the best times in over a decade to buy your own house.
Property is still more attainable and borrowing costs more affordable than what it has been in close to five decades despite the recent small interest rate hike, he says.
The rate hike increased the base home loan rate to 7.25% which is still about 27% below what it was before the onset of the Covid pandemic. The increase in home loan repayments are minimal and buyers can still find favourable mortgage loan conditions with some of the highest approval and lowest deposit requirements that we have seen in recent years.
That means that you can still get out of your rental, buy a bigger house or move to a better neighbourhood. Based on a calculation done by Seeff’s mortgage origination partner, ooba, a home loan of R1 million over a 20-year period will now cost around R7 904 (from R7 753) per month, just R151 per month more. A R1,5 million home loan will now cost R11 856 (from R11 629), just R227 more.
There is also still no transfer duty payable on purchases below R1 million which remains a great advantage for first-time buyers who can still find up to 100% home loans and in some instances with costs as well.
Even at the higher prices, the increase is minimal with R2 million costing R15 808 (from R15 506) and R3 million around R23 711 (from R23 259), under R500 more. For sellers looking to buy-up, it is therefore also still a great time.
Seeff says the interest rate and positive mortgage lending conditions which are the best since 2007 have been a game changer for the housing market which remains the good news story of the economy, supporting the post-pandemic economic recovery.
Despite the moderating activity following the buyer frenzy of late last year, the market remains robust with sustained demand in most areas. From the latest Deeds Office data, it appears that monthly transaction volumes have recovered back to the 2019 pre-pandemic levels and the market is only about 7% below the 2015 to 2018 average.
For the Seeff Property Group, this has been the best sales year in our 57-year history. We have achieved record prices of up to R55 million and R60 million in Plettenberg Bay, R55 million and R45 million at the Waterfront (highest since 2012), R40 million in Fresnaye and have just concluded the highest price by an agency in Camps Bay at R52 million among many other high value sales.
Seeff says that while we continue to operate in uncertain times for as long as the pandemic lingers. Naturally, a weak economic growth environment could negatively impact the housing market.
For now though, the market remains very positive and the good news story of the economy, and we expect more of the same as we head into 2022. We also expect that the interest rate should remain fairly flat, and any further increases should be fairly benign at least until the end of next year.
There is a steady flow of good stock onto the market which, unfortunately for sellers, means market-related asking prices are key to a faster sale and higher selling to asking price ratio, especially in the higher price bands.
Buyers will need to act quickly though, especially in the lower price bands and high-demand areas where there is no shortage of willing buyers looking to capitalise on the favourable market conditions.
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