Low interest rates – coupled with bank lending reaching an all-time high and a notable shift in consumer buying behaviours – makes now the perfect time to buy a home, says Rhys Dyer, chief executive officer of home finance experts, Ooba Group.<\/p>\n
\u201cDespite lockdown and a turbulent economy, there has never been a better time to own a home. In fact, people are investing more in their homes than before,\u201d Dyer said.<\/p>\n
\u201cInterestingly, our latest statistics for quarter 2 of 2021 indicate a 16.6% growth in the average purchase price of a home \u2013 R1,407,071 and R1,104,351 \u2013 up by 10.9% – for first-time buyers.\u201d<\/p>\n
This, he said, indicates that people are buying up. \u201cThey\u2019re increasing their spend due to low-interest rates and the need for more space whilst working from home,” Dyer said.<\/p>\n
Buying puts pressure on the rental market<\/strong><\/p>\n As home buying continues its upward trajectory, Dyer noted that first-time homebuyers have put significant pressure on the rental market.<\/p>\n \u201cWe are seeing a positive uptake in home loans by first-time buyers \u2013 at an average age of 35. They\u2019re now opting to terminate their lease agreements and invest in a home, and this is putting on pressure on landlords,\u201d he said.<\/p>\n Dyer cited affordability, poor credit scores, lifestyle, and flexibility as some of the key drawbacks for those who have not yet taken the plunge. He said that regardless of the economic uncertainty, people are still investing in homes.<\/p>\n Weighing up the pros and cons of home buying<\/strong><\/p>\n Dyer said that a monthly bond repayment on an amount of R1 million has dropped from R9,650 to R7,904. \u201cThree rate cuts in quick succession have reduced the prime interest rate to 7.25%, the lowest level since 1973,\u201d he said.<\/p>\n He highlights the pros of buying a home as follows:<\/p>\n Some of the cons include:<\/p>\n Dyer strongly recommends paying off your own home loan rather than someone else\u2019s. \u201cIt\u2019s recommended not fall into the comfort zone of renting, and for first-time buyers to take advantage of the current market conditions. For those who aren\u2019t sure if they qualify for a home loan, work with industry experts to check your credit score, receive a pre-approval and ultimately apply for a home loan.\u201d<\/p>\n \u201cFinally, if you intend to buy-to-let, the income from rent can be used to pay off your home loan,\u201d he said.<\/p>\n
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