Property specialists say that homebuyers and sellers want to start out attending to grips with the fact that increased rates of interest are more likely to stick round for longer. This implies that both sides of a sale might want to make changes.
Current expectations from economists and analysts level to the South African Reserve Bank (SARB) holding the repo price at 8.25% once more in November – with some leaning in the direction of one other price hike.
In both case, the broader narrative is that rates of interest will persist with restrictive ranges for now, with price cuts solely projected for the center of 2024.
Given this actuality, Seeff Property Group stated home sellers might now must relook their asking worth to convey it extra according to the long run outlook.
Homebuyers, in the meantime, might want to both alter to increased repayments or purchase for barely much less to make sure they’ve a monetary buffer.
“The good news is that the banks are still lending, and qualifying buyers can still find favourable terms,” stated Samuel Seeff, chairman of the Seeff Property Group.
Managing powerful instances
For households which might be fighting excessive rates of interest on the whole, Seeff stated that making changes to month-to-month budgets can go an extended strategy to watering the storm.
“Start by reviewing your budget and making adjustments. Look at where you can cut by cancelling unnecessary subscriptions and shopping around for cheaper insurance premiums.”
The property skilled stated that households must also give attention to lowering money owed.
“Financial planners suggest paying a little extra every month on your debts, or focus on reducing high-interest debts such as credit and store cards first. This will free up cash to further reduce your debt. Do not make further debt, rather cut back on your living costs,” he stated.
“You could also look at accessing surplus funds in your mortgage loan. If you have an access bond, you could access any surplus funds that you have accumulated to pay off some debts.”
Mortgage originator, ooba, urged refinancing home loans. This would require a brand new bond to be registered, which might be based mostly on the latest worth of a property.
“If you are struggling to pay or are falling behind, you should look to arrange new payment plans. Debt counsellors suggest that you do not wait because it will just get worse. Rather contact the lender or retail store to make new arrangements. You should aim to avoid bad debts and a negative impact on your credit score,” Seeff stated.
The property group stated {that a} home is important, and house owners ought to keep away from monetary misery on home loans by instantly contacting the mortgage financial institution if they’re battling to maintain up with the repayments in order that different preparations could be made.
“If you might be promoting for pressing monetary causes, you need to be upfront with the agent to allow them to help you in one of the simplest ways attainable.
“You could also consider downgrading your property. There are many options. You may be at a life stage where you could downgrade your home and benefit from an easier lifestyle and added cash by going smaller,” the group stated.
Read: South Africans can’t afford their properties
