Bond Choice: Go Out and Buy

The information in this article is courtesy of BusinessReport (Bond Choice urges consumers to go out and buy – 10 July 2009)

Although South Africa has not been affected as badly as Europe and the USA, it has led to a significant lowering in house price. According to Bond Choice, a mortgage origination company, this has bought new home ownership within reach of a new band of potential first time investors.

Managing Director, Kevin Mountjoy, explained that average home loans application has dropped between R550 000 and R600 000 with the top-end of the segment the most affected in terms of volumes,

He added that the current market made it possible for buyers to secure homes with the price they wish to - also known as the emotional price - due to the fact that the market is falling to levels last experienced in 1996, at rates not experienced since the 1980’s.

"Consequently, for genuine home owner seekers i.e. those who have secured professional advice on affordability and procured their 20 percent deposit plus the capital required for administration, the time for purchasing property has never been more advantageous," he said.

Mountjoy expressed that although South Africa had seen house prices drop with 20% to 25%, it is still not as bad as other parts of the world where price dropped with 50%. He added that South Africa had come of the longest sustained growth period in the last 35 years and he believes the industry should both acknowledge and rejoice the fact.

He predicts a recovery among middle-income housing, as buyers are showing some confidence in the market and seller are accepting the reality of a decline in prices.