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Why you shouldn't be in a rush to buy your first property

by , 19 May 2015

Buying your first home is likely to be something you've dreamed of for years.

But with the SA property market showing signs of weakness, you should take your time.

So what should you do?

Let's take a closer look…

Save for a property rather than be in a rush to buy

Erwin Rode, a property consultant, says that first-time buyers should “save towards their dream house before entering the property market,” says the SABC. He says with house prices “still very high in South Africa” rather spend time now saving.

Mr Rode says with interest rates hikes on the horizon, the “compulsion of buying now ASAP is not valid,” adds the SABC.

By saving up a larger deposit, you can take out a smaller bond. And when interest rates start rising, the effect to your bond repayments won’t be as great.

The residential property market is likely to slow

This follows FNB’s property economist, John Loos, comments last month.

Mr Loos said that growth in the residential property market “appeared to be gradually out of stream,” reports Fin24. He added that now may not be the “greatest buying opportunity”.

Mr Loos said the property market benefitted from the Reserve Bank cutting “interest rates to multi-decade lows,” adds Fin24. But now the government is raising taxes and interest rates will start to rise too.

How to prepare to buy your first property

Taking into account the views of Mr Rode and Mr Loos, it looks like property prices will be under pressure over the next few years, especially once rates start rising.

This could make property prices more attractive to first-time buyers.

Bottom line: Take the time now to prepare yourself for your first property purchase. Save a substantial deposit and don’t forget to have enough in savings to cover all the other costs of buying a home. These can be hefty too.

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Why you shouldn't be in a rush to buy your first property
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