Conditions still favourable for first-time buyers to join property market

 

Homeowners already feeling the pressure of rising living costs are set to be the hardest hit by the latest interest rate increase whilst first-time home buyers are likely to give further thought before taking the jump into home ownership.

 

But, says Rhys Dyer, ooba CEO, now is still a great time for first-time homebuyers to be entering the market.

 

“It is unfortunate that we are seeing further interest rate increases when the consumer is under such pressure, the growth in the economy is stalling and the growth in credit demand remains at very low levels,” he says. “Whilst the 25 basis point increase announced by the Reserve Bank earlier this month is not that significant on its own, we must be cognisant of the fact that the country is in an upward interest rate environment with potentially further rate increases to come this year. Consumers will be giving greater consideration to taking on more debt in this environment.”

 

Dyer, however, says potential buyers should not let the increase dampen their enthusiasm, as the current conditions remain favourable for first-time buyers to join the property market ahead of expected more aggressive property price increases.

25 July 2014

 

Despite the recent increases, interest rates are still at comparatively low levels, and house prices, whilst growing are still relatively affordable, with house price growth likely to be tracking below wage growth in the short term.  Stock shortages in certain areas are still prevalent, and this is assisting in driving prices higher.  Despite the increasing interest rate cycle, there are still many good reasons for first time home buyers to get onto the property ladder now, before we see a change in the cycle to more aggressive hose price increases.

ooba Has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

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.