As interest rates tumble, and property prices come under pressure, lower-income families could have their best opportunity in almost a decade to become homeowners, says Gerhard Kotzé.
Many essential workers have remained employed during the lockdown and this should help them qualify for home loans, especially since interest rates are already at their lowest levels in decades, and expected to fall further this year.
“As it is, rates have fallen by 2.25% since January, which means that the household income required to qualify for a R500 000 home loan, for example, has already declined from a maximum of about R19 300 to a maximum of around R16 400, ” says Kotzé, managing director of RealNet estate agency group.
Furthermore, monthly bond repayments have become more affordable – falling from R4 825 on a 20-year home loan of R500 000 to R4 100, and there is no transfer duty on pre-owned homes under R1 million, Kotzé says.