The choice between buying or renting a place to live is an important one – especially to those planning on moving into their first abode. Let’s look at an example of two young professional couples who are considering the option of buying their first property.
Assuming these couples work in one of the cities around the country, they are likely to want to live in the bustle of Green Point in Cape Town, Umhlanga Rocks in Durban, Bryanston in Johannesburg or Summerstrand in Port Elizabeth.
Now, each of these places can cater to the elites, but the average no-frills rental price of approximately R13 000 per month for a two-bedroom apartment is possible.
An example of property prices in these areas would differ quite dramatically per square metre, but for this example we will take a very conservative approach of R2.2m for a two-bedroom property in a favoured postal code.
Couple A has decided to buy a property for R2.2m in Cape Town as they figure they would like to own rather than rent.
After negotiating a preferred interest rate with the bank on a 100% mortgage for prime minus 0.25 percentage points (6.75% per year as of August 2020), they are looking at a 20-year bond with monthly repayments of R16 842 – after paying bond registration and transfer duties of approximately R143 366.
Denne historien er fra 8 October 2020-utgaven av Finweek English.
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Denne historien er fra 8 October 2020-utgaven av Finweek English.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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