Now is the time to get into the property market, and invest further into residential property if you already own a home. Besides being a basic need, property values are growing fast and the pace is expected to increase even further!
Data from the FNB House Price Index show that property prices in South Africa are increasing steadily. According John Loos, FNB Home Loans strategist, property values grew by 8.6% in just 12 months between March 2009 and March 2010
The price of an average home in South Africa is now at least R780 000. And, the fact that in 2005 the average house price was only about R260 000, further illustrates why I still to believe that property is one of the best investments available.
A number of factors are contributing to the strong growth in property market, among them are:
- A very low Prime Interest Rate – the South African Reserve Bank has cut interest rates by 5.5% since 2008. And, rates are expected to say relatively low.
- Renewed economic growth – As economic conditions improve, the supply of jobs has also improve in recent times.
- And, strong consumer confidence – Although most household still have very high amounts of debt, the cost of servicing this debt has dropped off significantly.
One other point highlighted by FNB in their House Price Index was the fact that homeownership is becoming less affordable. This means that although the average income for most South Africans is increasing, property prices are growing faster!
Therefore, unless you are planning a big change in your personal finance status it is best to get into the property market as soon as possible.
Another important note for first time buyers that I shared in a previously – Act quickly but don’t rush!
Related: Home Loans For First Time Buyers