Buying a Home in 2014? Now is the time.

Buying a Home in 2014? Now is the time.

• The strong likelihood of inflation being contained below 6% and therefore interest rates remaining at low levels for most of 2014: “I think it is possible that, to give the right impression in the run-up to the election and show that they have South Africa’s economic growth at heart, the government will, in fact, reduce the interest rate by a further 0.25%. Although this would appear to be no more than a token gesture, it would win the approval of the influential trade unions and other powerful bodies and it would help people to reduce their debt and have slightly more spending money. All this augers well for the housing market."
• Increased infrastructural spending and the resultant job creation: “The funds allocated for internal development in South Africa have, so far, not been fully used. I see the State opening the taps further from now on and this will put extra cash into the consumers’ pockets as well improve the efficiency of our transport networks, roads and other infrastructural components.
• The growing shortage of homes and the resultant willingness to pay above previous price levels: “There is,” said Anthony, “one danger here and that is, as we are already seeing in a few instances, that the banks might find it difficult to ‘see value’ in some of the properties for sale. If this happens, home buyers may find 100% and 90% bonds harder to come by. In general, however, the demand for homes is increasing and this will have a positive effect on prices.”
• The capital growth potential in housing in South Africa today: “With current and fixed deposit bank accounts as well as many other traditional money markets often giving very low returns, the logic of buying into bricks and mortar has improved greatly,” said Anthony. “For the uninitiated investor, a capital growth of 9% per annum is not to be overlooked, especially as this type of investment is relatively safe.”