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September 8, 2020The property market for 2020 initially proved to be a buyers’ market. Though with the rise of the COVID-19 pandemic and the resultant lockdown’s effects on the economy, the question is whether it still is.
The transfer duty threshold was lifted by R100 000, loan approvals were higher than they had been in years and interest rates were lowered.
At the time of this writing, the cut in rates have resulted in the repo rate and interest rate both being lower than they have been in decades. These reduced rates are creating more and more opportunities for buyers to enter the market, as borrowing costs are aimed at improving affordability. You may utilise our online instalment calculator to see the impact of the lower lending rate on monthly instalments. https://www.nvs.bondcalculatoronline.co.za/bond-repayment/monthly-installments#viewpoint
Another benefit is that banks are lowering the requirements for home loans drastically to assist more buyers to enter the market. This means that individuals with a lower income bracket will now be able to enter a wider market.
However, some of these measures were already implemented before the pandemic and were meant to battle the economic recession that existed prior to the pandemic. The fact is that relying on measures that were instated to counteract the recession’s impact on the property market may not be sufficient. It is vital that new measures are created specifically to counteract the effect or impact of the COVID-19 pandemic.
The market still favours those buyers who remained financially unaffected by the lockdown. Taking advantage of the measures that were instated prior to the COVID-19 pandemic will effectively also help stabilise the market for the time being. But with an economic landscape that is still changing and adjusting, looking vastly different from what analysts predicted a year ago, even when market activity does increase, the overall growth of the property market may still prove to be negative due to lowered prices and lack of demand.
The most important thing now for buyers and sellers alike is to consult with their property professionals, make smart investment decisions, and that will ultimately help strengthen the economy.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)