In today's Talk Money we continue to talk about property, I saw a recent poll asking if it is the right time for first time for prospective first time home owners to buy. The poll results show 66% of people think it is the right time to enter the market and 31% say they feel it's not the right time.
The average small home (80-140m2) property price according to Absa is R677 000 (June 09). In Somerset West I found a two bedroom home in Somerset Park for R650 000.
To Qualify for this home the first time home buyer would need to earn R20k p/m. The repayment over 30 years would be R6000 based on the current home loan rate of 10.50 %. Costs including bond registration and transfer fees would be R26 534 and the buyer would have to put down at least a 5% deposit deposit R32 500. This amounting to total upfront investment of R59 000 however the majority of banks require a 10% deposit which means the first time buyer would need R92 000 upfront.
The same property would cost R3400 p/m to rent.
So is it the right time to enter the residential property market?
