Cape Town property market game changer
Category Cape Town Property Market
The Cape Town property market has shown positive price performance over the long term. Owing to high ticket prices, many South Africans haven't been able to own property in attractive areas such as Cape Town.
FNB is seeking to change the game by launching its new collective buying home loan scheme - a first for South Africa's property lending market. The product was developed with the aim of providing lower-to-middle-income groups in all corners of the country with the opportunity to own a slice of property in SA.
As of August 2021, the bank will now allow groups of up to 12 purchasers to jointly apply for a single home loan. The product enables the aforementioned group to decide how much each person will contribute to the monthly debit orders. FNB have outlined that they are willing to split the debit orders to best suit the groups' requirements.
The value of collective buying
FNB's Home Finance Growth Head Mfundo Mabaso stated that collective buying is something that was already occurring on a small scale and that the collective buying value proposition was therefore based on historical knowledge.
He further outlined that because South Africans tend to associate in groups, the sensible solution would be to bring this idea to the mortgage space. It would provide further affordability to the market, which will inevitably lead to increased home ownership.
Vanashree Naidoo, product head of FNB Private Bank Lending, asserted that the collective buying home loan scheme is also designed to give lower-to-middle-income earners some form of assurance. In the event that something should go wrong, such as retrenchment, they will have a degree of financial security and not risk losing the roof over their heads.
This bold move by FNB to launch this innovative product will no doubt put pressure on the other domestic banks to follow suit. If collective buying gains traction, we could witness prices in the South African property market increase in certain segments given the new entrants emerging in the market.
As the Cape Town market enters the 'selling season', economists have indicated that they expect the new product to be widely adopted, which will bode well for the market at large!
Our team of specialist brokers have been highly active in Cape Town throughout the year and are working with serious purchasers, who may have missed out on previous opportunities and are keen to invest.
Should you wish to take advantage of this window of opportunity or are interested to know your property's value in the current market, click on the button below.
Author: Quay 1 International Realty
