Property affordability favours buyers
The SA property market has recently seen the biggest decline in prices since 1986, and this together with a 450 basis point decline in interest rates since December has significantly improved home affordability.

Colleen Gray, MD of CENTURY 21 South Africa, says the average house price to average income ratio as calculated by First National Bank has moved strongly in favour of buyers as a result of a decline in sale prices of more than 10% in the year to end-June.

“The message is that, if you have the wherewithal, now is without doubt the time to buy property in anticipation of the inevitable market turnaround.

“This scenario is similar to that of the UK right now, where the Halifax Group, one of the major property lenders, says housing affordability has trebled since prices there began falling 18 months ago.”

On the local scene, she says, it is of course very difficult currently for potential buyers to obtain a home loan – and virtually impossible without a substantial deposit.

“And there are other negative factors discouraging people from buying, such as increased unemployment, the danger of further retrenchments and low consumer confidence.

“Our view, however, is that for those with the foresight and the means to capitalise on greatly improved affordability, there is now a window of opportunity for profiting from property which may never be seen again.”

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