The criteria for lending to investors, tightening of the financial institutions, environmental factors and the tough economic climate and political uncertainty are all factors in the change of property purchasing in 2018.
The reality is very few are able to make large purchases without the assistance of a bank that’s willing to lend us capital. And taking out a mortgage allows you to become a homeowner now instead of far into the future. Borrowers then pay interest on the loan because they must pay a price for gaining the ability to spend now.
The good news is according to BetterBond, banks are more willing to grant homes at the moment, making it easier for buyers to get onto the property ladder. Their latest statistics show that the average approved bond size in South Africa is currently 6,05% higher than it was.
In addition, when it comes to property purchasing so much will depend on weather patterns in certain parts of the country this year, especially in the Western Cape. This is one of the country’s prime property markets. Property expert said that drought conditions, notably in the Western Cape region, can impact on regional economies which feed into those regions’ housing markets.
But the country’s water woes aren’t confined to the Western Cape, with Limpopo also struggling with water issues for some time now. Johannesburg and Durban have had scares in recent years, and the Eastern Cape is under restrictions too.
Property experts suggest that if you’re a property buyer in a water-scarce region. Consider focusing on water-saving designs, systems and fittings like aerated taps that add instant value to a property.
But, in order for the property market to really prosper, it will need greater political and economic stability. As currently there’s a decline in property purchasing because buyers continue to lean towards smaller, less maintenance properties that are closer to public transport. Have security considerations and lower operating costs.
This is due to the need to downscale in the tough economic and financial period. Households are gradually more conservative to spending as financial and affordability limitations become more acute. Consumers will be cutting back on expenses and trying to reduce their long-term debt.