Real Estate Investor Magazine South Africa June 2013 | Page 35

RESIDENTIAL
and the more the demand, meaning as demand
outweighs availability the price for property goes
up. “The resilience of South Africa’s residential
property market continues to demonstrate the
potential for sound capital growth in the medium
to long term, particularly given the prevailing low
interest rate environment. As many investors
will affirm, real wealth is created by property
ownership,” adds Dr Andrew Golding, CE of
Pam Golding.
Another stimulant to the property market
will be the affordable housing sector, currently
a major segment of the property market, and
one that has not been previously serviced.
With the entry of SA Home Loans to the
home loan market, house hunters who earn
less than R18 000 have a reason to celebrate.
Now lower income earners will have the same
access to housing as their higher income peers.
“Our competitors make much of the fact
that providing loans for affordable housing
plays a crucial role in nation-building by
allowing more of our citizens to get onto the
property ownership ladder. We take this as a
given and aim to treat them as we would any
other customer,” says SA Home Loans Chief

Executive, Kevin Penwarden. Mindful of the fact
that many lower income buyers find it extremely
difficult to save up for large deposits required by
many mortgages, SA Home Loans is offering
100 percent loans to qualifying customers, with
a 20-year term variable interest rate loan.

as depicted by building plans approved for
new housing, contracted by a small margin
up to February, while the construction phase
benefitted from double-digit growth in the
categories of houses smaller than 80m² and flats
and townhouses.

One signif icant effect of the affordable
housing mortgage boost is a possible change in
the composition of building activity. Flats and
townhouses could become a larger portion of
the residential property market. The residential
building statistics released by ABSA in March
2013 showed the real value of plans approved
for new residential buildings came to R1,89
billion in January 2013, up by just more than
R50 million, or 2,8% y/y, from R1,84 billion
twelve months ago. The real value of residential
buildings constructed was R1,47 billion in the
first month of the year, which was R280, 7
million, or 23,6%, more than a year ago. The
residential building statistics in the first quarter
of this year highlighted building activity in
the segment for flats and townhouses showed
some strong growth in the first months of 2013,
with low growth evident in the segment for
larger houses. In general the planning phase,

The stable interest rate will bring about renewed
interest and confidence in the property market,
Adrian Goslett of RE/MAX says, “the market
continued to show improvement in 2012 in
terms of both sales volumes and property prices
and while lending criteria remained tight, 2012
was a solid year for the property market in South
Africa. Steady interest rates will bring about
opportunities for home buyers in 2013 while
house prices will continue to see a measured
increase, would-be buyers who are creditworthy
and have access to finance will be able to find
property investment options that meet both their
criteria and their pocket.” So now is the time to
buy, and if you are a low– income earner, there
is now more choice in terms of mortgages and
bonds for your property needs.

RESOURCES
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June 2013 SA 11 745 5901
Toyah Gawne +27 Real Estate Investor

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