Three pieces of great news for property buyers

Those wishing to enter the property market were dealt a triple dose of good news in the 2020 budget speech recently given by finance minister Tito Mboweni. These developments, coupled with other factors currently making South Africa firmly a buyers' market, make 2020 a fantastic time to consider making the change from home renter to home owner.

The first piece of good news is that the transfer duty threshold has been raised from R900 000 to R1 000 000, meaning that if you purchase a property for under R1 000 000, the transaction will not attract transfer duty. On a property valued at R995 000, that means a saving of at least R50 000. The previous threshold of R900 000 had been in place since 2017, and this increase has been widely welcomed. The news also benefits those looking to buy properties priced higher than the R1 000 000 mark, because the transfer duties payable will be lower.

Secondly, a slight decrease in income tax means a little more breathing room for consumers across the board. This means that those monthly bond payments, coupled with rates, levies and the other expenses associated with home ownership, will have a lesser impact on the purchaser's monthly expenses.

Lastly, economists' predictions about another increase in VAT turned out to be incorrect, meaning that potential property buyers do not have this stress to contend with. VAT was raised from 14% to 15% in April 2018, and fears of another increase in 2020 were widely felt.

The majority of those who will benefit from the increase in the transfer-free threshold are likely to be first-time home owners, for whom affordability issues often become a stumbling stone in their endeavours to get a foot onto the property ladder. Over and above these first-time buyers, this development sends a lifeline to anybody looking for an affordable home. Sales of apartments under the R1 000 000 mark form an immensely popular segment of South Africa's real estate market, and this increase in the transfer threshold is here to help every buyer, whether or not they are buying property for the first time.

We are currently experiencing a climate in which banks are granting higher bonds than before, especially to first-time buyers. Over and above this, there is an abundance of properties on the market in every corner of South Africa to choose from. In short, South African property is currently a buyer's market, with sellers needing to be flexible in order to get that signature on the dotted line. 

In his speech, Mboweni spoke about the employment opportunities being created by the Jobs Fund project, which has created jobs for some 175 000 of South Africa's young people. This means that there are an unprecedented number of first-time buyers who will take advantage of these favourable market conditions.

With home-owners looking to tighten their belts wherever possible in order to make ends meet in the face of ever-increasing demands on their limited finance, the current trend towards people buying properties in close proximity to their places of work is set to continue. Thanks to the ever-rising cost of living and ongoing volatility of the petrol/diesel prices, the appeal of working close to home has never been stronger.

If you have decided that 2020 is your year to become a home owner, then the team from Jawitz Properties is here to help. As a leading real estate company in South Africa, we have our finger on the pulse of the property market. Tell us what your budget is and where you want to live, and allow us to find you the perfect home.