The Herald Online **News**

The Herald Online **News**

Owning a home almost out of reach now, say bank experts
Rochelle de Kock HERALD REPORTER
THE property boom which hit the market in 2001 and the constant rise in interest rates have made it almost impossible for most South Africans to own homes.
This meant, Nedbank Home Loans divisional manager Pramod Mohanlal said yesterday, that one would have to earn no less than R31600 a month to afford a house.
With the interest rate resting at a high of 15,5%, “the basic mortgage repayment on a R700000 home loan is R9477 A month,” Mohanlal said.
Although R700000 could previously afford you a comfortable four-bedroom home with two bathrooms and a double garage, it is now “barely enough to purchase a three- bedroom townhouse in the suburbs,” said Bond Choice Port Elizabeth manager Andrea Atkinson.
“The average price of a three-bedroom house in the Kabega Park and Westering areas is between R800000 and R850000,” she said.
Major banks said affordability was a major downfall for clients when applying for a home loan, because salary scales were not nearly enough to meet the soaring prices of homes and the escalating payback rates, as well as the current cost of living.
When it released its residential property gauge on Tuesday, Standard Bank said the outlook for the residential property market remained bleak.
The monthly cost of servicing a mortgage, the bank said, was now 36% more than it was 24 months ago.
Before the National Credit Act was introduced in 2006, banks used to consider 30% of your net income before approving a home loan. But now they consider your overall expenses and disposable income after deductions before approving or denying a loan.
“The average single or joint gross income should not be less than R31600 to qualify for a R700000 home loan,” Mohanlal said.
To be considered for a home loan, the bank has to assess whether the client can afford the loan, “which means that there must be surplus income after taking all expenses, including the new loan instalment, into consideration,” he said
Many people are now losing their homes because they cannot meet their monthly bond payments as a result of these increases.

Why pitch the figure at R700, 000? Why not provide a moladi home at R350,000?

Popular posts from this blog

Brick and Mortar vs. Injection Moulded Construction System - moladi

How to reduce the cost of housing construction?

Green Building Council - Sustainable Affordable Housing Delivery