More bonds being approved

There seems, over the last few weeks, said Michael Bauer, general manager of IHFS, the bond origination company, to be a shift in the property market, there seems to be more positivity and the banks’ loan approval rates have gone up.

“What has been surprising that in one week alone, we have had five 100% bonds approved, something that has not happened for a long time,” he said.

“I also have been told by the banks that I have dealt with that there are also more applications from property developers for project loans to start on new developments, so it seems a positive trend is starting to emerge in the property market when property developers enter the market again.”

At Bardale Village, where Bauer has been involved with the marketing since its inception, the majority of buyers, he said, tend to be first time home buyers.

“What we have noticed among buyers now, is that those applying for home loans are more aware of what is required to get the home loan needed. They understand the need to have a good credit profile, have their budgets properly set out, live within their means and financially responsible, and have a decent deposit (of around 10 to 20%),” he said.

The need for housing in the R439 990 to R719 990 bracket, which is the price bracket that properties at Bardale Village are priced at, are in high demand.

Home ownership in South Africa is valued very highly and the percentage is higher (at around 85%) than Europe and many other bigger economies, said Bauer.

Where in some cases 90% or less bonds are granted by the banks, bond applicants are finding ways on their own to make up the difference, whether by taken out personal loans or enlisting the help of family. It seems, he said, that people are willing to work harder to reach their end goal of owning their home rather than renting whereas in Europe many have resigned themselves to the fact that they will rent for the rest of their lives.

“There is no question about larger deposits being necessary when a person applies for a bond. At present, the higher the deposit one has to put down, the better the conditions of the home loan will be. It is also no longer possible as it was in the past, to finance the transaction costs of buying a home,” said Bauer.

“It seems too that the market has adjusted to the requirements of the NCA and most people are buying more responsibly.”

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