Demand for Residential Property Developments on the Increase

Demand for Residential Property Developments on the Increase

Residential property developments seem to be increasingly attractive to South African property buyers. This is according to Careen Mckinon, Sales and Acquisitions Manager at ooba, who says that the demand for houses within secure property developments is on the increase. She says that although there is still a healthy demand for standalone residential properties, there is increasing interest from first-time buyers for residential estates, featuring both sectional title and cluster housing options. According to ooba's April 2012 statistics, 50.9% of home loan applicants were first-time homebuyers. Although security is perceived to be one of the leading factors attributing to this trend, Mckinon explains that home owners are also attracted to these estates because of the lifestyle and communal aspects that these developments often include. "For example, many of these developments appeal to parents due to amenities such as dedicated play parks and cycle lanes, as well as reduced motor vehicle traffic." Mckinon adds that following the economic slowdown over the past four years, there is also a demand for units in residential estates that are accessible and priced reasonably. "The number of new housing units for which building plans were approved by local government institutions was up by 27% year-on-year in March 2012." She explains that from an economic point of view, residential developments generally provide an opportunity for consumers to enter the property market, especially in an environment where the interest rates are stable at lower levels and therefore provide buyers with an ideal opportunity to purchase property. "Buyers purchasing in new developments do not have to pay transfer duties, which also contributes towards the attractiveness of investing in property in a residential development," concludes Mckinon.

Hello ooba news

When applying for a home loan, one of your most important considerations should be securing the lowest interest rate possible. And when the home loan is granted, you should do everything you can to reduce the term and the interest that you pay.

It came as some relief to homeowners when the prime interest rate was cut by 50 basis points to just 8.5% last month. Although this provides a welcome reduction in the monthly costs of repaying a mortgage, ooba, the South African home loan experts, say it would be wise for people to keep their repayment levels unchanged.

Despite the buyer's market in the property industry at the moment, in the wake of the global economic downturn, banks are still wary of granting 100% home loans. In light of this, if you're considering buying a home, it's a good idea to start saving up for a decent deposit.

If you're thinking about buying your first home, get your financial affairs in order as soon as possible. You need a clean credit record to secure a home loan. Unless you have a clean record of servicing debt, your bank will be unlikely to grant you a home loan.