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Good news for the Property Market

Last week the Monetary Policy Committee left the all time record low Repo Rate unchanged, which is very good news for the Property Market!

In 2020 the property market, contrary to Doom & Gloom prophets, unexpectedly bounced back, and with this stabilisation of interest rates should be set to continue for the remainer of this year.

But Why?

Cost of Lending

It has never been cheaper to borrow money! The difference in interest rates can save you up to R900,000 over 20 years on a R2million bond. Yes - you did read that correctly!! When the interest rate comes down, the debt you have is less expensive each month, and that applies to all credit - not just your home loan.

If you have a R2 million bond, you would have paid in the region of R19,300 before lockdown, which now should be around R15,506. That is a whopping 24% saving which can be used to settle other higher interest rate debt like Credit Cards, Vehicle Finance and short term loans - or replenish the savings Covid lockdown obliterated.

Lower interest rates increases your affordability - thus if you have been thinking of upgrading, now would be the time to act on it.

Activity in the market

With first time home buyers entering the market due to affordability and rental prices being on par, there is a lot of activity in the market below R 2,000,000. For the first time the rental amount which Tenants were paying, is in the same ball park as a bond repayment. Now who would not rather pay their own mortgage?

Coastal properties keep attracting the attention of Gauteng buyers. Lockdown has proven that one can successfully work from home almost anywhere in the country - thus resulting in the new "zoom town" terminology for places like Greyton, Hermanus and Langebaan.

Multi-Generational home are also becoming more popular. Covid has made making ends meet on a fixed / limited income extremely difficult, which means young adults moving back in with their parents or elderly parents moving in with their children a real solution. As a result, the bigger properties with dual accommodation options are being snapped up faster than seen pre-Lockdown.

Good timing for buyers and sellers

It’s only a matter of time before interest rates begin to climb once again. Even though most economists disagree on the when rates will go back up, they agree that probably 2021 will not see any changes.

Thus if you are a buyer it would benefit you to act sooner rather than later - benefit from the current rock-bottom rates for as long as possible.

Sellers, too, are advised to act quickly in order to tap into today’s lively market.

As interest rates increase, demand will slow and sales will become trickier. It’s one of those rare situations in which both buyers and sellers stand to benefit by acting quickly.

Talk to us if you or anybody you know, has been thinking of selling…

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