Home prices steady, bond approvals on the rise in resurgent Cape Town
PUBLISHED 24 NOV 2019
There’s light at the end of the tunnel for Cape Town’s real estate market, as prices stabilise and bond approvals continue to increase.
The recent drop in home prices, which had alarmed homeowners and property investors, seems to have bottomed out. At the same time, more South Africans are being approved for home loans.
Acting together, these two trends could translate into excellent sales figures for homes across the Mother City. Let’s take a look at these positive developments in more detail.
Home prices have fallen - but the tide is turning
A stream of data over the past month or two points to a general trend in home prices: they are roughly at the same levels they were at a year ago. While flatline price growth may not sound like much to celebrate, it does indicate a positive development.
Compared to previous years, where prices were falling, they seem to have stabilised at current levels. This indicates that demand has risen to match supply, and a new cycle of price growth may be around the corner.
The lower average home prices in Cape Town also offer a great opportunity for semigrants , and people who are currently renting, to take the plunge and buy homes in the Mother City. But how will they finance them?
As it turns out, the number of people being approved for bonds is also increasing, signaling more good news for the real estate market.
Bond approvals on the rise, empowering home buyers
Home prices may have dropped to attractive levels for potential buyers, but getting bond approval can make the difference between a successful offer to purchase and a no-sale.
Fortunately, banks have come to the table. With new bond approvals up by roughly 4% year-on-year and more 100% bonds being approved, more South Africans are now in a position to finance their new home purchases.
The combination of well-priced homes in Cape Town, with great price growth potential, and easier bond approvals can only be a good development. If more offers to purchase go through successfully in the coming months and years, the Cape Town residential property market could be in for a healthy rebound.
If you’d like to take advantage of this opportune moment to invest in a Cape Town home, contact the Cape Realty team today.
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