Important message for South Africans who want to buy a home

With interest rates a full 1% lower compared to 2024, there is now an excellent incentive for South Africans to invest in property.

Seeff Property Group chairman Samuel Seeff explained that the current interest rate environment makes this a good time to buy property.

Seeff said owning a home offers unparalleled financial stability and serves as a powerful cornerstone for building generational wealth.

Unlike volatile investments, property tends to appreciate steadily over time, offering a tangible asset that protects consumers’ financial future and provides a sense of security and permanence.

Unlike rental properties, owning a home also grants you the freedom to customise and control your living space.

“With each mortgage loan payment, you are not just covering a cost, but actively building equity. It is a forced savings plan that grows your personal wealth and can be leveraged for future financial needs,” he said.

While the dream of homeownership might seem out of reach, especially for South Africans who feel they cannot finance it alone, Seeff said there are options.

“The traditional bank home loan route tends to be the most common, and securing pre-qualification upfront can give you a clear understanding of your affordability and strengthen your negotiating position,” he said.

Those who cannot afford a property alone can also consider alternative financing options. Purchasing a property jointly with a spouse or partner will allow you to combine resources and significantly improve your ability to buy a home.

Another option is buying a property with siblings as a family. “This could allow you to pool incomes for bond qualification and share the financial responsibilities, thus making homeownership significantly more accessible.”

However, Seeff stressed that the parties to the purchase must remember that it is a long-term commitment, and they will be jointly and severally responsible for the home loan debt and monthly repayments.

What to do before buying a home

According to Seeff, it is important to ensure you are financially stable before committing to such a big financial responsibility.

“You should never overextend yourself”, he said. “Buy below your means, but buy the best that you can afford.” Property experts generally recommend investing more in your home’s deposit and buying something more affordable.

This approach will lower your monthly repayments, which will become even more expensive once interest rates start increasing again.

Banks have become more willing to grant 100% home loans to make it easier for first-time buyers. This means that the buyer technically does not have to save for a deposit before being able to purchase a home.

However, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, urged prospective buyers to save for a deposit, even if they do qualify for these types of loans.

This is because putting down a deposit shows both the seller and lender that you are serious about buying the property and can afford the purchase.

“This not only improves your chances of having your home loan application approved, but it can also lead to a possible lower interest rate on your home loan,” Goslett explained.

Aside from being responsible about paying your mortgage loan on time every month, Seef said that homeowners should look after the property and keep it well-maintained to ensure it appreciates further in value.

“The banks offer various mortgage loan packages aimed at assisting consumers to purchase and invest in property.”

“It is important to be cognisant of the fact that purchasing a property is a significant financial decision which requires a long-term commitment of 20-30 years. It will provide stability, a roof over your head, and a place to call ‘home’.”