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Advice on buying

Good neighbours = higher house value


All over the world, people are seeking out neighbourhoods that offer them the possibility of a quieter life, a safer environment in which to bring up their children and a chance to be more “connected” with their community. “And the effect this has on home values,” says Harcourts Africa CEO Richard Gray, “is very evident from the premiums that homebuyers are prepared to pay to live in golf estates and other gated developments, not just in SA but in many other countries.

“But this doesn't mean that traditional suburbs and towns cannot be just as attractive - if their residents are prepared to cooperate in the same way as people do in sectional title complexes and estates.”

Many benefits can flow from something as simple as a friendly greeting when out walking the dog or when new neighbours move in, he says, including things like shared school trips or babysitting, and neighbours who will keep an eye on your property when you're away, take in your mail, water the garden, hold your key to allow deliveries and contact you in case of an emergency.

“However, being a good neighbour is a two-way street. Mowing the lawn or running a power saw at the crack of dawn, particularly on a Sunday or public holiday, is not likely to endear you to your neighbours. Holding rowdy parties every other night and a TV constantly at full volume is also likely to cause friction, while pets can also be a problem. "The exuberant barking of a young dog, for example, may enchant its new family but it won't sound the same to neighbours who have to get up early to go to work. Your pets need to be kept under control before you can reasonably expect - and request - the same of your neighbours."

Parking can be another sensitive issue, says Gray, especially in areas where there is not a lot of off-street parking for visitors. “If you're having lots of guests over, you should let your neighbours know and then make sure that no-one blocks off their driveways. In the same way, you can expect your neighbours not to turn their front gardens into used car lots or junkyards.”


Indeed, co-operative efforts to keep the whole area clean, maintained and crime-free can pay big dividends in terms of home resale values, he says, so residents should be keen to become involved in their local ratepayers' associations, community police forums and neighbourhood watch services. “Living in a desirable area benefits everyone who owns a home there, so everyone should be prepared to pitch in to keep it that way.”


ISSUED BY HARCOURTS AFRICA
FOR MORE INFORMATION
CALL RICHARD GRAY ON
031 201 1060 OR VISIT
www.harcourts.co.za

Home buyers who snooze now will lose

Although it's relatively difficult to obtain finance at the moment, prospective homeowners should not be dissuaded from trying to buy a property – for one very good reason. And this is, says Harcourts Africa CEO Richard Gray, that the current buyers' market will not last forever. “The property market has always been cyclical, providing the opportunity for those who have the courage and foresight to buy when it is in a down phase to reap bigger rewards than those who wait to buy until the market is on the upswing.


“On the other hand, those who wait until an upturn is underway risk losing out because it will become more costly to buy - and even more difficult to qualify for a home loan and afford the additional costs association with a home purchase. “To take a simple example, if you're interested in buying a home that costs R500 000 now, you will probably need a 10% deposit of R50 000 and about R22 000 for costs. Your monthly repayment on a loan of R450 000 will be some R4100 a month (at an interest rate of 9%).


“But if prices were to rise just 3% in the next 12 months, that same home would be priced at R515 000. You would need a deposit of R51 500 and about R24 000 for costs. And even assuming that interest rates had not also risen in the year, your monthly repayment would increase to R4200.” What is more, he says, the higher the projected monthly repayment, the harder it becomes to qualify for a home loan in terms of the affordability ratios used by the banks.


“Roughly speaking, you would need to earn just under R13 700 a month to qualify for the bond on the R500 000 house in the example above, and about R14 000 to qualify for the bond on the same house a year later. And this once again assumes that interest rates would have stayed the same which, quite frankly, is unlikely to be the case.” Gray also notes that these calculations take no account of the value of the monthly rent tenants are paying, “but on this score it is worth saying again that if you're not buying a home for yourself, you're buying one for someone else – and putting them in a position to benefit from the next market upturn.”


ISSUED BY HARCOURTS AFRICA
FOR MORE INFORMATION
CALL RICHARD GRAY ON
031 201 1060 OR VISIT
www.harcourts.co.za

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