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First-time Buyer? You Could Qualify for a Subsidy

First-time Buyer? You Could Qualify for a Subsidy

02 September 2016

Young professionals are the driving force behind the affordable housing market in Atlantis and the surrounding suburbs on the Western Seaboard. 

This is according to Caron Leslie, Broker/Owner of RE/MAXProperty Associates, who says the affordable housing sector is defined as homes that are priced between R300 000 and R650 000.

According to sales statistics, approximately 70% of recent buyers who have bought homes that fall within this sector have been young professionals, while the remaining 30% have been family buyers.  

Leslie says in their market, they have seen a large number of young graduates looking to get into the housing market as soon as possible. She says many of these buyers are in their first or second year of working, but don’t want to spend their hard-earned money paying for someone else’s bond.

On average, she says the buyers in the affordable housing sector are between the ages of 30 and 40 years old, and are single working professionals.  

According to Leslie, there is huge demand for freestanding homes within the affordable housing sector. She says many of the buyers who are buying within this sector of the market would prefer not to stay within a sectional title property. This is because it does not offer them the same kind of value a freestanding home does in terms of the space and privacy.

Leslie says location is just as important for them as it is for any other buyer, with proximity to hospitals, transport nodes, retail facilities and schools rated as the most significant factors.

“Safety for their families, especially their children, is also important to these buyers. This is why closed estates that have security features such as a guardhouse and a secure perimeter with electric fencing are sought after.”

According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the affordable housing market across the country is set to continue growing over the next few years, both in terms of buyer demand and investment potential.

He says more than half of the properties registered at the Deeds Office fall within the affordable housing sector, and these properties can offer investors impressive yields.

The affordable housing sector has had a huge impact on the property market due to the fact that these homes are more financially accessible to those who need them, he says.

Leslie says while the bond application process does not differ, there is a subsidy programme known as the Finance Linked Individual Subsidy Programme


“When the programme was first introduced, it catered to buyers who were looking at homes priced at R300 000 and less, however, the criteria has changed to be more inclusive," she says.

FLISP will now assist any first-time home buyer with a once-off down payment, provided they are South African citizens and earn between R3 501 and R15 000 per month.”

Leslie says this initiative by the Department of Human Settlements assists qualifying buyers to reduce the initial home loan amount, or fill in the shortfall between their loan and the actual house price.

"This will open up so many more doors for buyers in the bonded affordable housing space, making homeownership a reality," she says.

In order to qualify for the FLISP subsidy, buyers must meet the following criteria determined by the department:

· Not have qualified for a government housing subsidy before.

· Not have owned a fixed residential property before.

· Be competent to contract - over 18 years or legally married or legally divorced and of sound mind.

· Be married or cohabiting.

· Be single with financial dependents. 

Leslie says buyers need to ensure that they have a good credit record and have money set aside for costs such as lawyer’s fees, banks fees and a deposit.

When applying for a bond, they will also be required to have three months‘ bank statements, three months’ salary slips, ID, proof of current address and a marriage certificate, if applicable.

She says it is important for buyers to pre-qualify themselves to determine their affordability before they start their home search.

"It is also important for buyers to always work with a reputable agent that has experience and working knowledge of the area in which they wish to buy," says Leslie.
Article orginally on Property24