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Expert advice for home buyers ahead of the budget speech: No need to simply accept what is offered by the banks

The impending budget speech which may see a potential hike in Vat to 16% has everyone anxious and for good reason. However, for home buyers these headwinds can create a favorable opportunity, says one of South Africa's leading estate agency brands, Leadhomes.

Potential changes, which include a hike in VAT to 16%, as well as an increase in Capital Gains Tax (CGT), requires not only would-be home owners, but existing homeowners looking to sell their homes to take stock of their assets and be prepared for any potential liability that may arise.

This all impacts the residential property market, potentially compromising homeowners as costs increase constraining an already tight budget. 

Lloyd Hobson, national sales manager of Leadhome, says that while it all seems doom and gloom, for buyers, a flat market creates great opportunities for those looking to invest.

“In this scenario, it is ideal for buyers to shop around and compare bond interest rate offerings as well as homeowner’s insurance.”

He added: “There is no need to simply accept what is offered by the banks, rather actively pursue good offers from several organisations. Buying in these circumstances does require a more long-term approach.”

Hobson says there is no short-term gain from investing in property currently.

He also believes that a VAT and CGT increase may lead to further emigration or sales of homes because of the owners being in financial distress. 

Many of the latter will most likely audit their lifestyle and seek ways to downsize and reduce expenses. This potential influx of properties could bode well for buyers, but for sellers, only homes priced right will sell. Hobson advises to list and sell, don’t wait to try to achieve an unrealistic price. 

It would seem that no matter the economic circumstances, buyers are going to remain spoilt for choice, while the rest of the market grapples with another tough economic year.

For more advice on buying and selling property in 2020, visit Leadhome, South Africa’s leading hybrid real estate agency, here.

*For the latest brand focused South African news and new product launches, make sure to visit NOWinSA daily

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