PROPERTY PRICES ON THE UP!
Category General News
"So much has happened over this past year that was unexpected or unprecedented or both," says Myles Wakefield, CEO of Wakefields Real Estate. "Who would have predicted a real increase in the average property price since the first quarter of 2020?"
As expected, percentage increases and numbers from different sources vary, but ooba's statistics are clear: a 13,8 percent increase in the average purchase price, while the average purchase price of first-time buyers showed a 15,1 percent increase over the same period.
As would be expected when demand goes up, the shift in prices is accompanied by a property shortage in the popular price bands. The lower to mid-price range is always most in demand, but the higher price-range market has also elicited increased interest. As Wakefield said, "A good indicator of market health is that back-up offers on properties are becoming the norm rather than the exception. And that's what we're currently experiencing."
Interestingly, the shift in the property market is not simply about price, but about types of properties and locations. The ability and, in numerous cases, the permanent ability to work from home, has altered the house-buying and lifestyle criteria sought by prospective homeowners. Space has become a priority, which is often found in freestanding homes - interest there is rising. Granny flats, studies, or sufficient land/space to create additional 'work' rooms, has become highly sought after in property.
In addition, working from home permanently means you can live almost anywhere. With many people choosing to move away from the 'rat race' traffic and pressure, little remote towns inland or at the coast are experiencing an unusual property revival. It's here where the cost of living is far lower, and the quality of life is superb, not unlike a holiday - no wonder many South Africans are choosing to put down roots here. Bigger homes at a lower cost, with lower expenses - attractive for sure. The cool green life of the KZN Midlands, the affordable seaside life of the KZN South Coast...the list is endless.
We all know the low interest rate and bank's willingness to offer home loans provided a real spark to the property landscape, and continues to do so. During the first quarter of 2021, ooba obtained home loan finance for 80.7% of its applicants, 61% of whom required a zero-deposit loan (nearly 80 percent of the latter were approved). The average interest rate for ooba's successful home loan applicants is prime less 0.05%, and considering the significantly lowered interest rate today compared to a year ago, it's making buying more attractive than renting.
"Realistic, market-related pricing of your property is key, though," says Wakefield. "Homes in sought-after areas with market-related price tags are not only selling relatively quickly, but also close to the asking price. A buoyant property market doesn't mean buyers are rushing to buy at all costs - today's buyers are far more savvy, do their homework, and access all the on line tools at their disposal."
Author: Anne Schauffer
