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buyThe property market operates on an imbalance which at any one time is either skewed in favour of the buyer or the seller. At present there is a market which is in the recovery phase after an entrenched buyer’s market having been in existence. In this recovery phase, the market  will begin to move gradually towards redressing this sharp existing imbalance in favour of the buyer. Therefore it is a fact that this is the very best time for a prospective buyer to enter the market. A buyer’s market is determined by the following factors : serious and in some cases desperate ,negotiable sellers, a large number of listed properties providing the buyer with an ample choice and sales prices which are often 15 to 20% below the listed prices.

In a buyer’s market the buyer has a significant amount of leverage and if one believes the age old adage of “Making money from property is all about when you get in and when you get out”, the time has never been better to get in. A low entry price into the market means that when the market turns, which it will do as surely as the sun will go down at the end of each day, the property owner will realize a profit quicker on his investment as the property prices start to escalate.

ACQUIRING BOND FINANCE FOR YOUR INTENDED PURCHASE : There has been a lot said recently about bonds and the difficulties of acquiring bond finance….and most of it has been true. A lot of this has had to do the introduction of The National Credit Act [NCA]and a lot to do with the deteriorating economic situation both here and world-wide.
THE NCA basically enforced the banks to look at every loan application from the perspective of the clients affordability, as opposed to the client’s gross income. This meant that car repayments, other bonds held and being paid for, clothes accounts were taken into account and calculated by the bank to create a client profile against which the bond amount applied for was measured in terms of affordability.

  • THE LENDING CRITERIA of the various national banks change regularily in response to varying economic conditions. Vacant Land is viewed as less desirable risk for banks and at present none of the banks will lend more than 75% of the purchase price of an undeveloped property [provided you qualify on your personal affordability rating] meaning that you would be required to come up with a 30% [of the purchase price] deposit. A bond of up to 90% of the purchase price [providing you qualify in terms of affordability] is possible from most of the banks for developed properties up to R1 500 000,00. To calculate what your repayment rates on a specified bond amount would be, visit betterbond.co.za and use their provided bond calculator.
  • FACTORS WHICH MAY INFLUENCE YOU QUALIFYING FOR A BOND :
    Salaried applicants
    as opposed to self employed people are considered a lower risk for a bank. A self employed applicant would need bank statements which indicate a stable and established business to be considered
    Poor credit records, even the smallest unpaid account from way back can count against you as this all makes up part of your profile that the banks look at when considering your ‘risk’ level for bond finance
    Your total credit exposuree. how much you owe in relation to what you earn
    Non south African Residents cannot qualify for a bond exceeding 50% of the purchase price

    OTHER ‘ONE OFF’ COSTS, BESIDES THE PURCHASE PRICE, WHICH A BUYER CAN EXPECT TO PAY :

  • Transfer Costs : These are made up of
    TRANSFER DUTIES
    are taxes paid to the South African Government and are applicable in the case of all sales of immoveable property except where the seller is a registered VAT vendor.
    TRANSFER FEES are the costs paid to a conveyancing attorney for his/her efforts at transferring a property into your name.

TRANSFER DUTIES AS OF 24 February 2016Change in Transfer Duty rates announced in the Budget Speech. These new rates were announced in this year’s budget speech on 24 February 2016  and came into effect on 1 March 2016
These are the Transfer Duty rates applied to properties acquired on or after 1 March 2016, and apply to all persons (including Companies, Close Corporations and Trusts):

  ​VALUE OF PROPERTY     

(Rand)        

RATE
0 – 750 000 0%
750 001 – 1 250 000 ​ 3% on the value above 750 000
1 250 001 – 1 750 000 ​ 15 000 + 6% of the value above 1 250 000
1 750 001 – 2 250 000 ​ 45 000 + 8% of the amount above 1 750 000
​2 250 001 – 10 000 000 ​85 000 + 11% of the amount above 2 250 000
​10 000 001 and above ​937 500 +13% of the value exceeding R10 000 000