Nearly two thirds of South Africans polled will base their property purchasing decision in 2012 on whether they are able to afford a deposit.
Nearly two thirds of South Africans polled will base their property purchasing decision in 2012 on whether they are able to afford a deposit.
According to a survey by ooba, 58.83 percent of respondents considered having a deposit for a home the biggest influence on their property purchasing decision in 2012.
Low interest rates were rated as the second biggest deciding factor at 17.09 percent closely followed by stagnant and declining property prices at 13.68 percent.
Craig Deats, executive director for sales and distribution at ooba says not having a deposit available in order to apply for a home loan is a common concern among first time home buyers.
He explains that in the current economic environment, many consumers find it difficult to save towards a home loan deposit.
“Although 100 percent home loans are being approved by banks in select cases, it is advisable for consumers to put down a deposit when buying.”
On average, home loan applications without deposits have lower bank approval rates in comparison to applications where the homebuyer has a deposit, he says.
A deposit will not only increase an applicant’s chances of getting a home loan approved, but it also provides a number of economic benefits for would-be home owners in future, such as more competitive interest rates on home loans.
Since a home loan is paid back over a long period, a small deduction in the interest rate on the loan can save consumers money in interest payments over time.
The oobarometer date reveals that the average purchase price for property is R850 589.
As an example, should a potential buyer purchase a home with a 100 percent bond over 20 years, they can look at an average monthly repayment amount of R7 653 compared to an average monthly repayment amount of R6 888 if they had put down a 10 percent deposit.
The current low interest rates, voted by poll respondents as the second most important deciding factor when purchasing property continue to positively influence the property market and favour buyers.
He adds that with interest rates at a 30-year low, the cost of servicing a home loan has reduced considerably and improved affordability for potential buyers.
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