Young professionals are the driving force behind the affordable housing market in Atlantis and the surrounding suburbs on the Western Seaboard.
According to Caron Leslie, Broker/Owner of RE/MAX Property Associates, young professionals are keeping the affordable housing market buoyant in Atlantis and the surrounding suburbs on the Western Seaboard.
The affordable housing sector comprises homes that fall within the price range of R300 000 to R650 000.
Sales statistics indicate that approximately 70% of recent buyers who have purchased homes that fall within the affordable housing sector have been young professionals, while the remaining 30% have been family buyers.
According to Leslie, a substantial number of young graduates have shown interest in investing in the housing market as soon as possible. “Many of these buyers are in their first or second year of working but don’t want to spend their hard-earned money paying for someone’s bond” says Leslie.
On average the buyers in the affordable housing sector are between the ages of 30 and 40 years old, and are single working professionals.
Young professionals prefer freestanding homes:
Leslie notes that there is huge demand for freestanding homes amongst young professionals looking to purchase affordable housing. Several buyers looking to purchase property within this sector, prefer to live in a freestanding home rather than a sectional title property. According to Leslie, this is because a freestanding home is considered more valuable in terms of home space and privacy.
Why location is key for young professionals:
Location is another key preference noted amongst young professionals and buyers in general. The most significant factors for buyers were proximity to hospitals, transport nodes, retail facilities and schools.
For most young professionals’, safety and security is their highest priority to ensure maximum protection for their family. For this reason, closed estates that offer exceptional security such as a guard house and/or a secure perimeter with electric fencing, are often sought after.
Affordable housing set to increase:
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that buyer demand and investment potential in the affordable housing market is expected to continue growing over the next few years.
“More than half of the properties registered at the deeds office fall within the affordable housing sector, and these properties can offer investors impressive yields. The affordable housing sector has had a huge impact on the property market due to the fact that these homes are more financially accessible to those who need them,” he says.
A subsidy programme known as the Finance Linked Individual Subsidy Programme (FLISP) is available to purchasers of the affordable housing market. The bond application process, however, still remains the same.
The subsidy programme had initially catered to buyers who were interested in purchasing homes that were priced at R300 000 or less, but the criteria has since changed.
According to Leslie, the subsidy programme now offers help with a once-off down payment to any first time buyer, provided they are citizens of South Africa and earn between R3 501 and R15 000 per month.
This is an initiative implemented by the Department of Human Settlements, with the aim of assisting qualifying buyers to help lower their initial home loan amount or fill in the shortfall between their home loan and the actual house price.
Leslie says that this initiative is helpful in making homeownership a reality by creating more avenues for buyers who require financial assistance.
In order to qualify for the FLISP subsidy, buyers must meet the following criteria:
• Not have qualified for a government housing subsidy before.
• Not have owned a fixed residential property before.
• Be competent to contract - over 18 years or legally married or legally divorced and of sound mind.
• Be married or cohabiting.
• Be single with financial dependents.
Additional requirements buyers need for a bond application:
• Ensure you maintain a good credit record.
• Have additional money to cover the upfront purchasing costs (lawyer’s fees, banks fees and a deposit).
• Provide three months’ bank statements.
• Provide previous three months’ salary payslips.
• Provide proof of ID.
• Provide proof of current address.
• Provide a marriage certificate (if applicable).
Before starting the home search, it is advisable for buyers to determine their affordability by getting pre-qualified.
“It is also important for buyers to always work with a reputable estate agent that has experience and working-knowledge of the area in which they wish to purchase” concludes Leslie.
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