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It has become more affordable to enter the property market

It has become more affordable to enter the property market

<p>The prices may have gone up of purchasing a home but the costs behind the process have decreased.&nbsp;The average percentage of the purchase price required by the banks as a deposit on first-time purchases has shrunk from 8.4% to 6.8%. This is a large decreases and translates into an average saving of R9000.</p> <p>The transfer duty threshold was raised earlier this year from R600 000 to R750 000, which translates into further savings for most first-time buyers of up to R4 500. And&nbsp;don&rsquo;t forget that, wages have generally risen faster than house prices over the past two years, so monthly home loan instalments as a percentage of income have grown smaller.</p> <p>When taking all these factors together it becomes apparent that even&nbsp;in the long-term it has become more affordable to enter the property market&nbsp;for&nbsp;first-time buying despite the sluggish economy and the rising cost of living.</p> <p>First-time buyers are more credit dependent than repeat buys and it&nbsp;can be a bit daunting&nbsp;if the Reserve Bank goes ahead with further interest rate increases this year, as monthly mortgage&nbsp;repayments start to rise, but take all the factors into consideration before opting out.&nbsp;</p> <p>But for moment&nbsp;the demand for <a href="http://just.property/residential-property/for-sale/">residential property</a>&nbsp;continues to grow across all sectors of the market, as reflected in 2.1% increase in the overall number of home loan applications in the last 12 months, with the average of&nbsp;a year-on-year increase of 2% in the total number of home loan approvals, and a 15.7% drop in the number of applications that were declined outright.</p> <p>It is important to look at the process as a whole and to consider each aspect before making your decision.</p> <p><a href="http://www.property24.com/articles/entering-the-property-market-is-more-affordable-now/22929">Property 24 -&nbsp;Shaun Rademeyer, CEO of BetterLife Home Loans</a></p>