iAfrica Image: Pexels
Share with your network!
FNB has revealed that they’ve seen a 46% increase in the total number of buyers who purchased their secondary properties in the fourth quarter of 2020 compared to the fourth quarter of 2019.
A considerable amount of the property purchases were made in lower priced rental properties, with 20.6% of the purchases made for properties priced at less than R500 000 and 24% for properties priced between R500k and R1 million.
FNB Private Bank Lending Chief Executive, Praven Subbramoney says, “This data mirrors the trend currently seen in the broader property market regarding the increase in secondary property buying in the more affordable segments driven by middle and high income earners who are taking advantage of low borrowing costs and well-priced properties. In addition to low interest rates, the increased demand can be attributed to the savings customers
The housing market has emerged as a bright spot in South Africa’s fragile economy in 2020, with industry players reporting an unexpected boom in property purchases on the back of near 50-year-low interest rates.
The South African Reserve Bank’s decision to cut interest rates by three percentage points in 2020 brought the bank’s prime lending rate to 7%, making home ownership more affordable and resulting in a flood of first-time homebuyers.
Read more here:
Lower interest rates also pushed more existing homeowners into the secondary homeownership market. In other words, an increasing number of existing homeowners now own more than one property either for investment purposes (to let and generate regular income), to own as a holiday home, or for other reasons.