First Time Home Buyers Benefit from Excellent Conditions

January 21 - Good news for prospective first time buyers into the South African property market.

Perfect conditions exist for homebuyers to purchase their first property, including easier lending criteria and lower interest rates.

A number of South African home loan institutions and banks are requiring less deposit amounts on average (down to 14.8% from 19.1%).

In addition, the average initial decline ration fell to 45.5% in December 2010. That was down from 50.3% one year earlier.

The approval rate climbed 9.7% in December.

Besides easier lending criteria, the actual price of houses also dropped from R596,841 to R573,112 year on year in December.

The oobarameter price index showed that house prices rose a total of 5.8% in the year overall.

The first half of 2010 was stronger than the second half, showing double digit growth, while the second half was much weaker overall.

As such, first time buyers who are thinking of purchasing their own homes may find that they are looking at perfect conditions.

Buyers have a better chance to secure a home loan from a bank or mortgage institute, pay less for the house thanks to more competitive prices and still enjoy low interest rates.

Buyers should remember, though, that interest rates will fluctuate and should take this into account when budgeting for their monthly mortgage repayments.

1/21/2011 10:09:54 AM