 While South Africans dream of owning their own home, other nations consider renting the cultural norm. In Germany, for example, even middle-class and wealthy households often choose to rent their homes for life.
This makes sense for them, because of high-quality rental stock, strong tenant protection, and different market structures. “But in South Africa you really shouldn’t be renting your home, unless there’s a strategic reason behind it,” says Renier Kriek, MD of innovative home loan provider, Sentinel Homes. “Renting tends to be a trap in the SA economy, because you can’t afford not to have exposure to large capital assets such as residential property.” Aspirations vs reality In South Africa, renting typically isn’t a lifestyle choice but an affordability or creditworthiness issue. The 2025 Ipsos Housing Monitor found that 89% of renters in this country would like to own their own home. And 92% of South Africans believe everyone has a right to own their own home, but nearly half struggle with housing costs. Lack of affordable housing is enforcing a long-term renting cycle – trapping renters because they can’t afford to buy a home, even when their monthly rent is higher than potential bond repayments. Stats SA’s 2024 General Household Survey recorded a drop in homeownership (from 64.4% in 2022 to 60.1% in 2024) and an increase in households who rent (from 22.5% in 2022 to 25.1% in 2024). The rental trap affects everyone “For the past 70 years, property prices have outpaced wage increases,” says Kriek. “This is not only a South African phenomenon, but here it has the effect that 80% of South African households are already effectively priced out of the property market. Our housing backlog is around three million formal units.” He quotes French economist Thomas Piketty, who says that if the real return on capital is higher than the GDP growth, then those with capital will become richer at a faster rate than those who only rely on wages. In short, capital ownership deepens inequality, effectively locking South Africa’s renters out of wealth-building opportunities that their property owning counterparts have purely because of having a large capital asset with the benefit of leverage. How to escape the trap? Renters should explore all possible options to buy property, says Kriek. Start saving early, don’t overspend on rent. Putting down a larger deposit improves your home loan eligibility, as the instalments must stay within 30% to 35% of your gross income. “Let’s say, this qualifies you for a R1 million home loan,” says Kriek. “But if you have saved a R200,000 deposit, you can buy a R1.2 million house.” This should also reduce your interest rate, saving you money and increasing your return on the property value. Strategies to boost your deposit A first-time buyer earning R3,500 to R22,000 per month may fit the criteria for the First Home Finance (FHF) Subsidy, formerly FLISP. “It’s a brilliant government scheme that contributes towards buying or building your first home,” says Kriek. “Certain bond originators assist in securing the FHF, which would be the most frictionless way.” Many employers also offer housing subsidies, sometimes combined with favourable loan terms, deposit assistance, or matched subsidies to qualifying employees. Use any and all of these opportunies for support, if you can. Making homeownership more affordable Kriek suggests co-buying: getting a partner (not necessarily your romantic partner) to purchase a residential property together. Or enhance affordability by buying a “fixer-upper” house. He says, “You generally get a larger uptick in value for making the renovations than buying an already renovated property. However, you’ll need cash as home loans don’t cover renovation costs.” Another option is buying a house with an income-generating flatlet or garden cottage to be rented out. The bond originator can include 60% to 70% of the projected rental income in the loan affordability calculation, to help secure the loan. And the rental income earned goes toward paying down the finance, saving on interest. You could also subdivide. “Many municipalities recently started to allow the building of more than one house on a single residental erf,” says Kriek. “So, if you buy an older property with a large backyard, you can sell the developable part of it, or the right to build there, to someone else., even if you can’t raise the money to build the second or third dwelling yourself.” Crunching the numbers “Escaping the rental trap doesn't necessarily require you to own the house you live in,” says Kriek. “Sometimes, this means buying properties that you don't live in, or buying several smaller properties instead of one expensive one.” For example, at the higher end of the market, rentals are generally cheaper than the interest on the bond. Here, you might be better served renting and – rather than purchasing the house you live in – buying a less expensive property with a better investment case. “Or instead of buying one house for, let’s say, R3 million, you could invest in three duplexes for R1 million each, in different areas, all earning income. This would spread your risk for the same value and provide more diversification benefit,” says Kriek. “The basic lesson is that if you're investing in residential property to break free from the rental trap, your decision must be purely financial, not emotional.” ENDS
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 Two Cape Town apartments recently went viral for their overpriced monthly rent. A modest apartment in Green Point was going for R22,000 while another small unit in Durbanville was advertised at R16,000, despite needing repairs and having an ‘ugly kitchen’ with broken appliances. Social media users criticised the price-quality mismatch, noting that similar or better homes in Joburg cost far less.
Affordability concerns like these are a key reason why tenants are relocating from the Western Cape, according to nearly 80% of rental agents in PayProp’s 2025 State of the Rental Industry report. “Even more concerning, the vast majority of South African households (80%) are priced out of the formal housing market because their monthly income is under R26,000,” says Renier Kriek, MD of innovative home finance business Sentinel Homes. “We have an undersupply of about three million formal housing units.” Living in Cape Town is particularly pricey, with average property sale prices increasing from R1.6 million in 2020 to R2.1 million in 2025. In contrast, Johannesburg’s prices have remained relatively flat over this period, staying on average between R1 million and R1.5 million, according to property analytics firm Lightstone. Soaring rent “Obviously the higher capital values mean that people who buy for investment require a higher nominal return, which means the rents go up,” says Kriek. This has been happening in the Western Cape, where the PayProp Rental Index shows 9.6% year-on-year rental growth and average monthly rents reaching R11,285 in Q1/2025 – significantly higher than Gauteng (R9201), KwaZulu-Natal (R9170) and the Eastern Cape (R7330). Rent control Calls for rent control in Cape Town are getting louder. The idea is to cap rent increases to make housing more affordable. However, this may win populist votes and provide short-term relief for tenants, but won’t fix the housing shortfall, says Kriek, pointing to unsuccessful rent control in cities like New York, Berlin, Stockholm or Tokyo. While rent control impacts the entire property market, it ironically hits hardest in the low-income band – those who should benefit the most. “Rent control leads to underinvestment and poorly maintained units as landlords have limited incentives to maintain or expand their rental stocks because their profits are capped,” says Kriek. Another problem is misallocation, where some tenants will stay in rent-controlled units even when these no longer match their needs. By blocking the units for people who genuinely need them, they create an inefficient housing distribution that worsens the undersupply further. “Rent control is the most efficient technique currently known to destroy a city - short of bombing.” Making small units profitable There’s ample private sector money available to invest in rental housing, says Kriek but government needs to change the market design that makes this segment unprofitable. Small units are more expensive per square metre to build – and sell – than larger ones. In addition, he says, tenants in affordable units (sub-R7000 rent/month) are more frequently in rent arrears than higher-income tenants as they feel economic pressure harder. The number of ‘squatting’ tenants (who haven’t paid rent for three consecutive months and are still occupying the property in the fourth month) is also increasing: the TPN Squat Index rose from 3.48% in Q4/2023 to 3.71% in Q2/2024. Legal protection of landlords The balance of power is unduly tipped against landlords and needs to be levelled, says Kriek. “The law that governs evictions, the Prevention of Illegal Eviction and Unlawful Occupation of Land Act (PAI), isn’t fit for purpose. It was designed to evict land squatters but due to poor drafting it also applies to the eviction of tenants who don’t pay their rent or refuse to move out when legally required.” This makes the process unnecessarily expensive, time-consuming and open to exploitation. “Historically, eviction is sensitive topic in SA,” concludes Kriek. “But if we don’t allow strict enforcement of payment obligations, then landlords won’t invest in rental housing, which is the easiest and the quickest way, using the least amount of government resources, to fix our housing undersupply.” ENDS  In its June 2025 Property Newsletter, automotive and property data provider Lightstone reports that only one formal house exists per 3.3 families who earn less than R26,000 per month. This accounts for more than 80% of South African households. The overwhelming majority of South African households are currently priced out of the South African property market, and this trend is worsening.
“There’s something very wrong if such a large demand is not being met and, although the problem is well known in the property industry, no real solutions are forthcoming from the government actors who are responsible for solving these problems,” says Renier Kriek, Managing Director of innovative home finance provider, Sentinel Homes. He says the root causes are mainly systemic and need to be addressed by the government. It is simply not acceptable that since 2000 we have added 19.3 million inhabitants in SA but our economy has managed to produce only 1.9 million homes. Where we are Not only are there not enough houses but new developments are victim to rising construction costs, making each generation of property less affordable to consumers than previously. In fact, property prices have been outpacing wage increases for the past 70 years, not only in SA but in most of the world. Add to this trend South Africa’s flaccid economic growth resulting in low job creation and low wage growth, and it’s easy to see why affording a home is becoming harder and harder for low to middle earners. National changes Certain things need to change outside the property market before problems can be tackled from within, says Kriek.
“Making such changes at a national level will ensure that problems in the property market are not intractable,” says Kriek. “But these necessary reforms will also go a long way toward rejigging the economy generally for the better.” Property market changes Inside the property market, several problems are making housing construction more costly and therefore less affordable when properties are sold.
Opening the door to housing that’s affordable If 80% of South Africans cannot afford a home, and developers are unwilling to meet the demand, something is terribly wrong. It’s not an innovation or economical problem but a systemic one that the government needs to rectify. The problem is market design, and that is something for which we rely on government, and for which the political will must exist to take some tough decisions. “The private sector is profit driven and the demand clearly exists, so it’s up to the government to create the incentives and ease the restrictions that prevents the private sector from earning their bread in the provision of affordable housing,” says Kriek. “There’s more than enough money floating around – government just needs to create a market that provides incentives for the available resources to flow to where the demand already exists.”  Frequent short-term borrowing could be a black mark against you when applying for a home loan.
“The number of short-term loans you burn through may warn banks or other lenders that you’re having trouble managing your finances,” says Renier Kriek, Managing Director at disruptive home finance business, Sentinel Homes. That can make them reluctant to fund your dream of owning your own property. Easy debt While all debt should be managed responsibly to maintain a good credit score, for many South Africans, short-term loans are becoming an addictive way to make ends meet. Or, to fund luxuries they can’t afford but refuse to live without. It’s tantalisingly easy to get hooked as well - you don’t need to put up collateral to get one and you don’t have to explain what you’ll use the money for. Also, some like to think that if they fall behind on their repayments, they can simply submit themselves to a debt review. Introduced by the National Credit Act, a debt review is a legal process for someone who is over-indebted to settle with their creditors by paying what they can afford. A registered debt counsellor will review their finances and help them create a repayment plan. The hidden costs Unfortunately, there’s no such thing as a free lunch. Short-term loans can carry much higher interest rates than other types of debt - up to 5% per month, which is around 6 times the current prime rate. “So, the more you borrow, the worse off you become financially and the more likely you are to default,” says Kriek. That debt review “solution” you are being offered isn’t necessarily a safe bet either - because it will cut you off from any further credit provision for as long as it takes to remedy your past bad behaviour. Even if you’re not a repeat offender, firms offering debt counselling will often assure you that your debts will be forgiven, the slate is wiped clean and all will be forgiven. “In the real world, lenders could deny your home loan application simply because you needed debt review in the first place,” says Kriek. Alarm bells Short-term or unsecured loans are not an evil to be avoided entirely. They’re actually good for the economy when used responsibly. However, they’re also a red flag to home loan providers when they feature strongly in your financial history, even if you’re keeping up with repayments. Credit providers use various risk models to identify patterns in our spending behaviour - good and bad. They know what financially responsible and irresponsible spending patterns look like. “Frequent short-term loans - with or without defaulting - are a risky pattern that implies an individual does not manage debt well, and that is something a home loan provider does not want to make a long-term investment in,” says Kriek. “The ability to delay gratification is the underlying attribute that responsible users of credit have, but there is no easy way to quantify whether a particular applicant possesses that trait – the number, frequency and type of unsecured credit transactions is a useful proxy in that regard.” Good debt So, what is the right course of action, especially if you already have short-term loans? First, understand that short-term loans have their place but are seldom necessary. Stop using them and make a plan to pay off the ones you already have. Then get to work on building an emergency fund of cash that can only be touched for true emergencies, so that you will not need unsecured debt in those cases. Second, work on saving for luxuries such as holidays and large capital purchases. You will be paying monthly anyway, whether you take the credit or save, but in the saving scenario interest will be working in your favour rather than against you. Delaying the gratification of that large purchase is difficult, but no-one said adulting would be easy. Finally, if there is no other option, opt for “good” debt as far as possible. Buy your clothes, furniture, appliances, groceries and other items using store credit if you absolutely cannot do without. You don’t have to buy things you don’t need to build a good credit score. Everyday items and normal household purchases are fine. “Credit providers’ risk algorithms generally look favorably on consumers who start their credit journey with store debt because it fits the pattern of responsible spending, provided you pay your accounts on time, of course, and do not spend near or above your credit limit,” says Kriek. Long-term planning Eventually, most people end up before a home loan provider in the hope of buying a house they love. But lenders are profit makers and risk reducers, so it’s important to think like they do. Are you a good investment? Will you repay your home loan on time and in full? The lender’s modern analytical systems - often powered now by artificial intelligence - evolved to answer questions like these and exist to protect their owner from risk. “Short-term loans that literally fund your lifestyle can easily sway the algorithm against you,” says Kriek, “especially if you are funding luxuries or nice-to-haves from easy debt rather than developing the discipline of saving.” ENDS  Nothing is certain except death and taxes, the saying goes. Property owners must plan for both if they want their home and other assets to pass smoothly to those surviving them.
“Structuring your estate smartly, or at least having a will in place, will spare those grieving your passing further hardship, both emotional and financial,” says Renier Kriek, Managing Director at Sentinel Homes. Any decision a property holder makes in this regard should be guided by advice from a professionally qualified financial and estate advisor. However, Kriek offers a good overview. Basic factors When planning for death, property owners need to consider two main factors. The first is how to structure their estate so they don’t directly own anything when they die. This is usually only appropriate for those with large estates and minor dependents, or businesspeople who risk having their assets attached to repay creditors, but may not be the best tax planning advice for most consumers. The second concern is their marital status. Are they single, married in community of property, or married out of community of property either with or without accrual? “Each marriage model will affect the distribution of an estate differently,” says Kriek. Make a will Without a will, intestate rules apply to the deceased estate, as prescribed by the Intestate Succession Act 81 of 1987. These rules determine which surviving relatives will inherit what portion of the estate, from the surviving spouse and descendents down to distant blood relatives. The Act’s complex requirements could result in, for example, a spouse losing their family home to ensure they and each child receives an equal inheritance. So, for anyone having assets such as homes or other fixed property and especially those property owners who have dependents, it is always best to have a will professionally drawn up to make sure assets will be distributed in a manner desired by the property owner. “Again, the marriage model will affect how the will should be structured,” says Kriek. “Estate planning with a licensed and regulated professional is also likely to include investments and insurance, proper planning of which remain essential.” Leverage trusts and companies The beginning of the article mentioned not owning property at death, which is a desired outcome for some consumers due to tax, risk or other reasons. Avoiding direct property ownership while still enjoying the benefit of owning property can be accomplished through the use of a trust or company. However, the cost of these vehicles makes them best suited to more affluent people who have larger estates and minor dependents, or entrepreneurs. If property is transferred to or bought through one of these entities, the entity owns the asset. So, dying is of no consequence, if one’s dependents are the ultimate beneficial owners of the entity, such as through being beneficiaries of a trust. The property held by a trust or company rather than in a person’s own name will not be subject to estate tax or capital gains tax at death, and typically cannot be attached by the deceased’s creditors. Only income that is earned through that property is taxed at a rate prescribed for the specific type of entity in addition to capital gains tax if the entity elects to sell the property concerned. “Which structure is best suited to an individual’s needs must be determined with the help of a trusted estate planner or financial manager,” says Kriek. “Do not assume that the more complicated structure, using entities such as trusts and companies, is the “better” and therefore most appropriate one.” Address affordability Unfortunately, structuring cannot save a property that surviving family members are unable to afford, whether it is bond repayments, rates or levies, trust administration fees, corporate accounting fees, or other expenses. This could happen if a surviving spouse does not work and cannot raise the required finances to settle existing debt against the family home or other property. An estate might be able to cover its own costs, for example, where income is derived from rental properties or the entity receives cash bequests from the deceased person. Otherwise, a will, trust or company should be backed by some form of insurance that ensures funds are available after the owner’s death. “By following this rough guide and using a properly qualified and licensed financial planner, you will allow your loved ones to continue enjoying the life you worked so hard to provide them with,” says Kriek. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes  Competing precedents, including a recent court case involving a home buyer who got cold feet, wanted to walk away from the deal but couldn’t, have sparked discussions in South Africa’s property law circles. The judge ruled in favor of the seller, because both parties had signed a contract that became binding as soon as the buyer’s credit provider issued its “approval in principle”.
“Some people misinterpreted the ruling, or disagree with it - saying it wasn’t fair,” says Renier Kriek, MD of Sentinel Homes. Yet the judgement followed centuries of contract law precedent by focusing only on the following question: At what stage did the purchase agreement become binding, before or after the property finance had been accepted by the buyer? “Obtaining finance is a process, unlike a turning on a light switch, it’s not instant and even positive results arrive piecemeal,” says Kriek. “When you sign an offer to purchase a property and require a home loan, there’s usually a condition that your loan must be approved before a certain date. This is called “suspensive condition” – meaning that only once this condition is fulfilled, the contract will become final and binding. “Buyers and sellers need to understand the suspensive condition in their contract, especially as they generally have competing interests in terms of what stage the deal should become final,” he says. “It’s therefore important to phrase your contract without ambiguity, so it’s not open to misinterpretation.” Real-life consequences Contract law may sound academic, but it has serious, real-life consequences. Since nobody wants to lose their deposit, Kriek urges buyers to fully grasp the financing process: When a home loan provider assesses your application to buy a house, and is satisfied lending you the money, it will first issue an approval in principle (AIP). Then it conducts a valuation, before eventually issuing a prescribed document called pre-agreement statement and quotation. According to the NCA, the buyer has five days to accept the pre-agreement statement and quotation, which then becomes a final offer of finance. “From the seller’s perspective, it would be best if the agreement of sale would likely contain a clause stating that the contract becomes binding as soon as the home loan provider issues the AIP,” says Kriek. “From the buyer’s perspective, however, this clause poses a risk: it means you’re bound to the sales agreement, the sale is final, and your deposit could be on the line, even before you have agreed to the interest rate and other finance conditions suggested by the home loan provider.” Ideally, he advises buyers to ensure the sale is only binding once: a) the bank has issued the pre-agreement statement and quotation, and b) you have accepted it. “This means you can only lose your deposit or be forced to buy the property once you have agreed to the terms of the credit proposed to you.” Check the nitty-gritty Also watch out for home loan approvals that require the submission of approved building plans. As a rule, your offer to purchase should require the seller to do so. But if this clause is missing, the seller won’t be obliged to provide the building plans, even if your home loan provider requires these. This makes you as the buyer responsible for obtaining the plans. It’s not only time-consuming but if plans can’t be approved, due to unauthorised building works, your deposit may once again be at risk. This also applies to any other conditions your home loan provider may have. You have to ensure that these conditions are also in the sale agreement, so that the two documents tie into each other. For these reasons, Kriek urges buyers to get legal advice before signing their offer to purchase. Don’t rely only on the property practitioner or others linked to the seller No-one should take a high cost and high liability decision like buying a home without expert legal and other professional advice, such as from a registered property practitioner and bond originator. Ultimately, understanding the nitty-gritty of your contract should help you avoid financial losses and enjoy a smoother property transfer. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes  It's not easy to get a mortgage on your dream home if you're not employed full time and earning a fixed salary. Freelancers, those working on commission or sourcing their income from gigs, and many other independent earners, often find themselves facing a brick wall when applying for a home loan from banks.
However, more people than ever are becoming self-employed in these fields and are seeking easier alternatives to a traditional mortgage bond. This is according to Renier Kriek, Managing Director at Sentinel Homes, which specialises in financing home ownership through instalment sale agreements. How does it work? "Instalment sale agreements are steadily becoming popular not just among those that do not qualify for a bond but also many who do not fit the salaried mould for which the mortgage model was specifically developed," says Kriek. An instalment sale makes acquiring a home similar to buying a vehicle on hire purchase. In Sentinel's case, the company finances the purchase and the buyer repays the value of the property in monthly instalments. Although the company holds the title deed, the buyer enjoys all the rights and responsibilities of ownership during the period of the contract. Once the purchase price is repaid in full, total ownership is transferred to the buyer. "On the surface, there is little difference between buying with a bond or via an instalment sale," says Kriek. “The only practical difference is the procedure followed when the buyers do not pay their instalment, but even in that case, an instalment sale is to their advantage.” However, an instalment sale agreement offers several advantages to this class of homeowner. Improved affordability Because a freelancer or a self-employed person’s income may vary from month to month, the bank will only consider a portion of their earnings. So, even if they qualify for a home loan, they will likely have to settle for a cheaper property or fund any shortfall on the purchase price themselves. Through an instalment sale, up to 100% of their income is assessed. “This gives the purchaser more freedom to choose a property they really want,” says Kriek. Improved credit score An instalment sale allows a buyer to acquire a valuable asset sooner and improve their credit score in the process. As the property’s value increases and their financial position grows over time, they may become a more attractive borrower. And they do not risk being caught in a rent trap while the values of homes continue to increase. "Many of our clients have been granted bonds on the basis of their instalment payment history and were able to settle our instalment agreement early from bond refinance," says Kriek. “You can never get on the property ladder soon enough.” Lower default risk When a borrower defaults on their mortgage, they face losing their property through a sheriff’s auction, having adverse judgements against them, and being blacklisted for 5 years or more. This impedes their ability to acquire another property and obtain any credit, and may even limit employment opportunities. However, with an instalment sale agreement, they have more options, including negotiating their position and, ultimately, selling the property to pay off their debt. "Even then, they retain a clean record and we have assisted clients that eventually recovered from such a position to buy another property," says Kriek. Protected by law As with a mortgage, the contract is governed by the very comprehensive National Credit Act. Another law, the Alienation of Land Act, also applies, ensuring the rights of the parties to the agreement are fully protected. Instalment sales are also registered against the title deed of the property. A growing market As more people start to freelance or work in other independent fields with irregular income, owning a home through an instalment sale agreement promises a logical alternative to mortgage bonds. "It is apparent that an instalment sale agreement offers better advantages, more protection and greater flexibility to those who dream of owning a home without sacrificing their financial independence," says Kriek. “The offering is available via mainstream intermediaries, so be sure to ask your bond originator or estate agent about this currently lesser-known financing option.” ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes  This year, almost half of the world's inhabitants will head to the polls to elect their new governments, including 8 of the world’s 10 most populous countries.
"In South Africa, we can expect our own election to put the property market into a temporary holding pattern, dragging on the subtle buyer’s market we have been experiencing" says Renier Kriek, Managing Director at Sentinel Homes. While he advises owners to wait until the end of the year to consider selling their property, Kriek cautions buyers to not get caught up in election fears and miss out on real estate bargains. The impact of sentiment All market behaviours are driven by sentiment. South Africans face uncertainty around the outcome of the election and the likelihood that, for the first time in its history, the country will be led by a coalition government at the national level. This creates negative sentiment that is also being fuelled by the heightened and increasingly populist rhetoric of competing political parties. And persistent factors, like the delay in interest rate cuts and a declining rand, only add to the doubt. "While we were all hoping for a downturn in the rate cycle at SARB's May or July meeting, I now doubt anything will happen before September. The MPC remains hawkish and seem unlikely to move interest rates down before the US Federal Reserve has lowered their policy rate," says Kriek. That's expected well after the election and these compounded concerns are pushing people to take a wait-and-see approach, including in the buying and selling of property. A first for South Africa All countries with a proportional representation electoral system eventually face a coalition government scenario. The likelihood of a national governing coalition is therefore a sign that our political system is maturing. This will be South Africa's first coalition government at a national level and the norms associated with such a structure have never been firmly established among the political class or the voting population. While national coalitions are a sign of progress and maturity, it is likely to lead to a lot of short- to medium-term noise, that is likely to have a continuing and unpredictable impact on sentiment in all markets, including the property market. The nearest we have to some agreement is the Multiparty Charter whose only purpose is to counter a national coalition between the ANC and EFF. Countries like Belgium with older proportional representation systems have developed the advanced bureaucracy necessary to almost run the country on autopilot, even without a government. South Africa, however, still needs to find its footing in any coalition pacts and develop the necessary protocols among participants intent on promoting their own interests. "This means things will probably be noisy and messy for some time after the election, as parties attempt to nail down the terms of their respective alliances," says Kriek. What to expect from property Currently, it's still a buyer's market for property and it definitely won't turn into a seller's market until after the election and a rate cut. Until then, we can expect that property price growth will remain low. Once the election outcome is known, and provided we have avoided worst-case scenarios, and the rate cut is at hand, we can expect pent-up demand for property to spill into the market and significantly increase demand. In addition, weak economic growth means sellers who can afford to wait should indeed wait until spring or summer to see if they can fetch a good price for their property relative to the market. Winter is historically not a great time for selling homes anyway. Despite the general modd brought on by politics and the interest rate cycle, the market in the Western Cape remains buoyant and there are signs of buyers returning in earnest to areas like southern Gauteng and areas eastof Pretoria. The smart money of property investors also remains in the market, signalling that opportunities exist. Along with low property price growth, this means that astute buyers can still pick up bargains while others hesitate. "If you want to buy, buy now and don't be put off by sentiment-driven hesitance that currently prevails in the market election sentiment," advises Kriek. “In the South African property property market, due to structural factors, what goes down must eventually come up.” ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes  Everyone buying a home would like to know that they are getting good value for money. Buying a property that is good value for money is not easy but is achievable for those who are astute and are willing to be patient and remove as much emotion from the decision as possible.
The first important mindset shift is that buyers must not confuse value with price. “Just because you were able to negotiate a reduction in the asking price does not make it a bargain. The price likely was inflated to begin with, because there are many incentives favouring higher listing prices,” says Renier Kriek, Managing Director of Sentinel Homes. True bargains have some distinguishing characteristics to look out for. This includes:
Home seekers on the lookout for a bargain must remain alive to illegal construction. “The risk associated with illegal building work is almost always not worth the discount on the price,” says Kriek. If there are any doubts about the structural integrity of a building, call in the professionals to do an inspection. The benefit of a qualified home inspector, especially to inexperienced buyers, cannot be overstated. Since kitchens and bathrooms are the most expensive parts of any residential properties carefully consider the conditions of these two areas. More sage advice from Kriek is to avoid bargains close to open public spaces. These areas tend to devalue property if they are not well maintained by local authorities. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes If you do not want to receive emails from us, please use the link: Click here to unsubscribe.  A path to financial security is home ownership. Since there is no rule saying your first property must be a home to live in, you have the freedom to buy the home you can afford as the best way of getting started.
Asset prices have escalated much faster than wage increases over the past 70 years and that trend is likely to continue. This simply means that homes are becoming less affordable, says Renier Kriek, MD of Sentinel Homes, a non-bank home loan provider. “If the trend of decoupling asset and wage prices is going to continue the best bet is to get into the property market sooner rather than later. Particularly when there are so many bargains to be had.” First time home buyers are progressively becoming older because of affordability. It has moved from around 30 to 32 years to around 38 to 40 years. “You must get in earlier to buck this trend. If you wait until the time you can afford your dream home you may never be able to achieve that goal.” It is now a buyer’s market. Kriek explains that South Africa is coming off from a high-inflation-high-interest-rate cycle. “Inflation has become a more manageable beast, and market watchers are starting to predict a decline in interest rates next year.” Time the market Unfortunately, very few people act until they see the first rate cut. By then the cat is out of the bag and the market will change quite rapidly. “If you want to time the market you have to buy now.” Kriek says first time buyers who can afford to acquire a real estate asset at current interest rates will likely be able to afford it through the cycle; and they are unlikely to purchase a property they can’t afford. “The ugly duckling may be a better start than the shiny house on the hill.” He also suggests that prospective buyers use a bond originator to get prequalification for a home loan. “It shows that you are a serious purchaser, which makes everyone so much more willing and able to help.” Real estate, whether it is your own home or an investment property, comes with expenses and tax consequences. However, if you do not want to live from wage-to-wage for the rest of your life then some sacrifices are called for to enter the property market. “Every goal has some sacrifices and the sacrifices for financial goals are of the living standard kind. If you want to truly benefit from asset ownership you will have to suffer some short term discomfort. That is reality.” Take the leap Owning inflation-beating assets, like residential real estate in the correct areas and markets, is generally a good idea. Kriek has 19 years of property investment experience. His advice:
ENDS MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za For more information on Sentinel Homes please visit: Website: www.sentinelhomes.co.za Facebook: Sentinel Homes |
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