Why buying property is still a great investment
Category Advice
Buying a home is an exciting chapter. It provides security, comfort, and a sense of accomplishment. For many, homeownership is a lifelong goal because it's a great way to build wealth. With a well-chosen property asset, you can literally get the key to you and your family's future success. And it can even be the start of a thriving property portfolio.
Insights from Absa's Q1 Homeowner Sentiment Index
Absa's Q1 Homeowner Sentiment Index (HSI) shows the consumer confidence level regarding the property market in South Africa. Since 2020, the HSI finds that sentiment has continued to be positive about the current property market. Survey respondents reveal that a majority believe property is a secure asset (58%) and property creates long-term income (58%).
According to the HSI, investing in property is also at an all-time high. 83% of respondents consider it an appropriate time to invest in property considering the current market. They believe property always accumulates in value (53%) and one stands to make a good return (48%).
Benefits of property investment
There's a good reason why owning a home is the South African dream. Property offers many benefits in ways that create real value over time.
Make a smart investment: In contrast to many investments, real estate is an appreciating asset. Although real estate values move in cycles, housing values consistently improve over the years. In South Africa, Lightstone reports that residential property price growth accelerated across all provincial indices in an upward trajectory.
Build equity: It's likely you will take out a home loan to buy your property. As you pay off the remaining amount, you build equity. At a later stage, you can cash in on this for more borrowing and purchasing power.
Have a personal finance tool: Having greater home equity offers you the chance to take a second mortgage on your property. This lets you access funds for your child's education, a new vehicle, or to pay off medical bills.
Save money: Renting offers many benefits including flexibility and fuss-free living. However, in the current buyer's market you will find bond repayments matching, if not lower than, monthly rental payments. Buying can make better sense if you want to put down roots in an area and own your property.
Earn an extra income: By buying to let, your property can provide a consistent, reliable income. In Gauteng, the property market is dominated by upwardly mobile young professionals seeking affordable rental properties. Areas like Kempton Park, Benoni, and Boksburg, which are close to work opportunities and amenities, are highly sought-after by this demographic.
Considering the advantages of property investment, you may be wondering when to make your move. The sooner the better considering the optimistic outlook for the local property market.
It's the time to invest in property
South Africa is still experiencing a buyer's market, making it an excellent time to get on the property hunt. With the prime lending rate currently at 7 per cent, the lowest it has been in 55 years, buying property is more accessible than ever.
You also have a better chance to qualify for a home loan. Banks have approved more 100% home loans. In fact, ooba, the leading bond originator, finds that 80% of its customers have been approved for 100% loans, with some of its clients putting down an on average deposit of 9%.
Another incentive for investing in property is that the raised zero-transfer fees threshold remains in place since February 2020. Properties purchased for under R1 000 000 require no transfer duties.
If you're a first-time buyer, you can even qualify for the Finance Linked Individual Subsidy Programme (FLISP). If you earn between R3 501 and R22 000 per month, you can qualify for a subsidy of up to R121,000. This can be used to pay the deposit on a house or to decrease the size of your home loan.
South Africa's buyer's market also means there's an oversupply of property stock, giving you even more choice to find your dream home. In Kempton Park, for example, there is a range of sectional title simplexes, duplexes, security estates, townhouse complexes, and apartment complexes on offer.
Invest in property with De Lucia Group
Don't feel overwhelmed by the home-buying process. De Lucia Group gives you access to property professionals with years of experience. We can help you pinpoint a property that can be a nest egg for your future or have rental potential to start bringing in income immediately. View our properties for sale to get started. Then, send a message to De Lucia Group, call Michael De Lucia directly on 082 493 1089, or email michaeldl@delucia.co.za.
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Author: De Lucia Group
