Signals 'all green' for further market improvement

Almost halfway into 2010, the national RealNet estate agency group is satisfied that the property market recovery has now taken root.

“The value of sales in our network over the first four months of 2010 was 80% higher than during the same period of 2009,” says group CEO Tjaart van der Walt, “and there are many other positive indications of further market improvement as the year progresses.

”These include lower household debt levels, lower inflation and the lowest interest rates in many years, all of which are making home ownership more affordable for more people.

“In addition, the government’s recent announcement of a R1bn mortgage guarantee might break a longstanding logjam that has prevented much of the huge housing demand at the lower end of the market from being translated into sales.

“The fund should mean that many thousands of people earning between R3500 and R9000 a month can now obtain home loans to buy their own homes, and the entry of so many new buyers will no doubt give the overall market a further boost.”

On the subject of home loans, Van der Walt says his group and its mortgage origination partner BondChoice are now achieving a 68% approval rate on loan applications – mostly as a result of giving buyers good advice upfront about what type of property they can afford.

“As we said at the start of the year, now is a good time to buy a home in terms of price and affordability, but we also always advise buyers to budget conservatively and perhaps set their sights on less expensive properties to ensure that they will still be able to afford their bond repayments even if interest rates start rising again.”

Meanwhile, he says, RealNet is not expecting any rapid rise in home sale prices this year – more a gradual lifting. that will hope “And we don’t anticipate that the pattern will be altered in any significant way by the Soccer World Cup. Although this is no doubt a wonderful opportunity and showcase for SA, it can really only be expected to bear fruit for the property market in years to come.”

Article from: www.realnet.co.za