[imagesource: Pixabay]

South Africa has seen historically low interest rates over the past year, which has meant an increase in activity in the property market. Now, many are starting to evaluate what changes are in store and how they will potentially affect the property market, as well as interest rates. Could 2022 be the year to take the leap from renting to buying your property?

Renting vs Buying

In South Africa, how we choose our living space has changed. We now want more room with home office spaces and outdoor areas, instead of convenient locations that compromise on such features so that people can be closer to amenities and work links. One factor that has made buying more appealing is that since 2020, when interest rates were slashed, the South African property market has performed better than expected and has become more accessible. For example, in 2020, there was an increase of 17% in loan applications for first-time buyers. However, predictions are that this “boom” could start to slow down in 2022. 

With the gap between the cost of buying your own home and renting closing over the past few years, some claim that it is more cost-effective to buy rather than rent. Yet, it is important to remember that owning means additional expenses such as maintenance, additional taxes, and municipal rates.

On the other hand, renting will mean fewer monthly outgoings and expenses. Nonetheless, the most significant benefit of ownership is that you will own your home and pay your own bond, not someone else’s. A more and more appealing aspect of owning is the sense of stability it brings. Of course, there are also risks associated with buying. Weighing up the pros and cons of renting and buying is predominantly a financial exercise but is, of course, also an emotional one. It’s essential to clearly understand what you want in a home and how it will fit your lifestyle, not just now but also in the future. 

Do the Math!

A tip to help you decide whether renting or buying is appropriate for you is to use an online calculator. This is a simple place to start and will quickly give you a realistic idea of what you can afford, considering that your total living cost should make up roughly around 30% of your monthly income. It’s crucial to be realistic and honest about your financial situation when making this critical decision. Remember to take every aspect into consideration, from your deposit payment to furniture and fittings. 

Image: Pixabay

If you are seriously considering buying your own property, a great idea is to use an online mortgage broker like Trussle, a service available in the UK. You can calculate what your monthly mortgage repayments will be, fee-free, and you can also get expert mortgage advice from an experienced advisor who will help you find the best option for your individual circumstances. The comparison service considers numerous deals from different lenders on your behalf, making the process quick and easy, as well as saving customers money and unnecessary stress. For UK buyers, this is a tool with the intention of speeding up the process.

With so much uncertainty over the past few years, many of us crave some stability and safety. Remember, don’t rush this life-changing decision and take into consideration all the options, including the possibility of a lease to buy property.