It’s currently cheaper to buy than to rent
CEO of RE/MAX of Southern Africa, Adrian Goslett offers advise on buying vs renting
According to regional director and CEO of RE/MAX of Southern Africa, Adrian Goslett, the record-low interest rates have already encouraged many first-time buyers to enter the market, and for good reason.
At the current interest rate of just seven per cent (prime), and with room for another cut before the year is out, it is possible that the monthly repayments on a home loan will cost less than the rent on the same property.
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At the current interest rate of seven per cent, repayments on a R1-million home loan taken over 20 years would amount to just R7 753 per month.
In many suburbs, that works out to be less than one would expect to pay in rent on the same home.
For example, tenants can expect to pay roughly R8 500 on a one-bedroom apartment in Rondebosch East.
These kinds of homes usually sell for between R850 000 to R1-m, making the monthly bond repayment more affordable than rent on these properties.
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“There are so many opportunities for first-time buyers across South Africa right now,” said Goslett.
“Those who want to stretch their budget even further should look for new developments to avoid the expense of transfer duties and related fees.
“For those who can afford to do so, there really has never been a better time to enter the market than right now.
“I would just advise buyers to leave room in their budget for if and when the interest rates return to pre-lockdown levels.”
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