Property trend watchers, always on the lookout for signs of a pickup in the market, have so far not commented as much as would normally be expected on a significant trend reported on in the latest FNB Property Barometer, says Sean McCauley, director for Rawson Properties.
The trend to which McCauley was referring was the big upturn in first time homebuyers '“ an increase of 35% since 2008. In 2008 first time home buyers comprised 17% of the total homebuyers and in 2011 they comprised 23%).
McCauley said that this shows
1. that the banks are easing up on their lending criteria '“ even to the extent of three of the major banks now granting 100% loans to qualified applicants, with one bank granting up to R2 700 000
'This,' he said, 'may or may not be in response to repeated calls from estate agents to review the criteria but, whatever its cause, we are grateful and see it as a first step towards 'normalisation' of the market;
2. a revival in consumer confidence in the property market '“ it is noteworthy, said McCauley, that many first time homebuyers do not have to buy: they can continue to rent or live with friends and family. The fact that they choose to do so indicates an increasingly positive mindset regarding property in SA today and this is to be welcomed.
3. the raising of the transfer duty tax exemption to homes sold for up to R600 000, has been another boost to first time home buying; and
4. first time homebuyers are encouraged by the 35 year low in interest rates
The benefits of home ownership, said McCauley, have been so well promoted (by, among others, Rawson chairman Bill Rawson) that we assume they will be widely appreciated. However, this is not always the case among those with a 'rent-forever' outlook. It is, he said, therefore encouraging that so many people at the lower end of the housing market realise that owning a home is still the most convenient way to secure growing assets, a stable family-oriented position in society and the opportunity to 'personalise' ones domestic surroundings.
'Home ownership is good for economies and the fact that SAs first time homebuyers are on the increase is good news. It could be that this emerging middle class will keep South Africa on track despite disruptive elements working to break down existing social structures and change existing economic policies'
For further information contact Sean McCauley on 011 463 1092 or email sean@rawsonproperties.com.
