Falling interest rates over the past two years have encouraged a spike in residential property buying as investors and aspirant homeowners took advantage of the opportunity to buy.
And even though the rate has started to rise, it is still low enough to continue stimulating this trend.
Well-priced homes says ooba Group chief executive Rhys Dyer, are the most desirable assets on the market right now – and consumers are still taking notice.
Even if your budget is not huge, taking your first step on the property ladder is a “savvy move”.
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“Young professionals who wait too long to purchase their first home risk getting stuck in the rent trap, while their rent money could be going towards paying off a bond on their very own home.”
Homebuyers looking to enter the market on a budget should consider scouting for properties priced at R1 million and under, Dyer advises.
“Properties under R1 million incur no transfer duties. In addition, the repayment on a R1 million home currently sits at R7 904 – up by just R151 since the repo rate increase.”
The problem for many first-time homebuyers, however, is understanding where to start, and he “strongly recommends” that you receive a free pre-approval to know what you can realistically afford and to better understand your credit score.
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In addition, Dyer says you should focus on three specific factors that determine the long-term investment value of a property – the area, the home’s accessibility to amenities, and the features ofthe property.
Area: Make your choice of area based on its current and future demand.
“These are suburbs that have long-standing popularity, or those where there is an obvious investment into new developments.”
Location: Is the property located within proximity to facilities such as schools, shops, and offices?
“These are in great demand as cities deal increasingly with the issue of traffic congestion.”
Features: Focus on features that are existing on the property, as opposed to those that can be added later.
“For example, properties with spacious kitchens and living spaces, en-suite bathrooms, and security systems have greater value than those which don’t.”
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