SA Home Buyers reaching limits

Property News: Buying and Selling

SA homeloansThe affordability of most home buyers are reaching their limits following the recent interest rate hike. And with fears of further rate hikes due later this year the number of SA home buyers are dropping fast.

Findings have shown that the average South African saves just 0.2% of his disposable income and spends the remainder on servicing debt and paying for consumables and services.

While a debt-to-income ratio of nearly 70% will still be sustainable for most bond holders as long as the current interest rate holds, household debt will become much more difficult to service if interest rates continue to move upward.

And buyers are keeping this in mind, increasingly reluctant to over-extend themselves.
But property experts explain that the frenetic buying that characterized 2004 and 2005 has slowed partly as a result of rising stock levels.

“Sellers need to realise that they have competition in the marketplace, that there are no longer five or 10 buyers for every home. In today’s market, buyers are digging in their heels when it comes to over-paying. They want value for their money and they are prepared to wait for the right home at the right price,” says Mike Bester of the Realty One property group.

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