Some Home Loan experts say first-time buyers will be faced with difficult decisions during the next six months, despite improved affordability on homes.
The Chief Executive of BetterLife Home Loans, Shaun Rademeyer, said the decision to buy has been complicated by the lack of certainty in the South African economic environment.
The country has a new Finance Minister, a divided governing party, and was recently subjected to two ratings downgrades – from Fitch and S&P. The Moody’s rating is still pending.
So, while the cost of buying a home might seem right to many, the jury is still out on whether that investment will be worthwhile in the long term. Rademeyer understands just how difficult that decision will be, but insists that the time is now.
“At the moment, the affordability of homes is improving, but the access to finance is getting more difficult and confidence in the economy is falling, which may be causing first-time buyers to doubt the wisdom of purchasing now,” said Rademeyer.
“However, they should bear in mind that the best time to buy is usually when everyone else is selling or sitting on the fence, and the rate of price growth is very low or non-existent. And our statistics show that the rate of price growth is definitely slowing currently, especially in the first-time sector of the market,” added Rademeyer, who believes that now was as a good a time as any to purchase a home.
He also explained that the selling trend that currently existed in the property marketplace, provided an opportunity for first-time buyers to negotiate a little. He believes the odds are currently in the favour of a first-time buyer.
“What is more, those who are following the crowd now, and are in the process of selling, are aware that they have more competition in the marketplace and are generally more willing to negotiate, meaning that buyers can often secure even better pricing,” he said.