Dear Property Buyer,
It is February 2021, for the last year you have had big leverage in the Real Estate Market in South Africa, The Current Interest Rate showed you that a Mortgage on a New home is belly to belly with the Rent you’re paying, maybe less.
For the Year ending 2020, Banks generally were awarding 100% Mortgage although this is grinding to a Halt in 2021. Now, Banks are dealing with the lag measure of a huge bad debt book – as Debtors have to pay back the money from their payment holidays…and can’t.
In 2019 the Average Purchase Price in South Africa was R870 000. After the Drop in Interest Rate twice in the 2nd Quarter of 2020, the average purchase price climbed to R1 050 000 – for the same LSM.
So my Tiny Tip for Buying in 2021:
Your Bond Originator will bring an amazing deal based on Interest rate so you will get excited and say, well lets get more, lets get bigger, we can up our budget by R200 000 based on the repayment.
If you are buying for the Long Term, Buy a Property well under your affordability point.
Why? Because as the Economy recovers, I promise you, sometime this year Interest Rates will go up again. it has to. You want to be able to comfortably afford your home in spite of this.
Lastly. Have fun with your House Hunting, be a bit cheeky and budget for a future hike.
National Operations Manager Century 21