Low interest rates means now is the best time to buy property

Cape Town - While a lot of people have lost their jobs or suffered salary cuts, real estate experts say this is the best time to buy property.

Real estate agent Maureen van Zyl said it was a good time to buy property as an investment in South Africa, as interest rates are on average at 7%.

She said house prices remained stable at the moment due to the demand in most regions running high.

Van Zyl said residential estates which offer a safe lifestyle, more flexibility during lockdown and lots of amenities are especially favourable to buyers.

“Owning a home is a good option to build equity and grow your investment portfolio,” she said.

She said you could sell the house later, giving you a return on your investment. However, you will need to have funds for a deposit, transfer fees, bond registration fees, insurance and inspection fees.

Van Zyl said when considering the supply and demand of housing, owning property as an investment in an estate was a good idea as there was limited stock for both purchasing a home and rentals in most regions.

Should you not have the funds to purchase upfront, Van Zyl said renting was also a good option. It also allows for flexibility if you are not sure about where or how long you want to stay in an area.

She said owning or renting in a secure estate was a great investment and opportunity for single people, newly-weds and families. Most estates offer a village lifestyle that people desire, especially after the pandemic and criminality in many areas.

“Supply versus demand is in favour of a strong rental market, and it is a good time to invest,” she said.

Regional director and chief executive of RE/MAX, Adrian Goslett, agreed that it was a great time to buy property.

He said it had never been more affordable to buy than “right now”.

Goslett said there were a lot of first-time home buyers in the market at the moment owing to the record low interest rates that often make it more affordable to buy than to rent.

“The reported sales total for our network is much higher than it was pre-Covid-19. There is a lot more buyer activity today than there was two years ago,” he said.

According to BetterBond, with the interest rate at 7%, a buyer would need to earn about R26 000 to qualify for a bond to buy a home of over a million rand, and the monthly instalments would be about R7 800.

Last year, when the interest rate was at 9.5%, someone with the same salary would only have been able to afford a home costing under R900 000.

Goslett explained that most people ended up purchasing property with their hearts rather than just their minds.

“It is the lifestyle benefits rather than the potential financial benefits of homeownership that tend to have more sway among buyers who are uncertain about whether they are ready to purchase a home of their own,” he said.

Weekend Argus