There has been a significant increase in the percentage of property purchases being made with cash rather than home loans in the past two years – but not all these buyers are investors snapping up buy-to-let bargains in a down market.
“An increasing number,” says Berry Everitt, managing director of the Chas Everitt International property group, “are people who have been made extremely debt-averse by the recession and who, with cash in hand from savings, investments or perhaps the sale of an existing property, want to own a bond-free home.”
Writing in the Property Signposts newsletter, he says this is one of the most important factors driving the trend towards smaller homes, and the increasing demand for apartments and town houses compared to large houses.
“However, sectional title living does not appeal to everyone, and more and more cash buyers are now also turning to the possibility of using their money to literally build their own homes on freehold land.”
The growing popularity of this Build It Yourself (BIY) idea is clearly illustrated by the success of the TV series Grand Designs and its spin-off exhibitions but, says Everitt, most BIY enthusiasts don’t have such lofty ambitions.
“Usually they just want a modest, comfortable home that they can fund themselves without having to go to the bank for a loan, and preferably one that is environmentally-friendly and energy efficient so they can cut utility bills as well as doing away with a bond repayment every month.”
And from the hundreds of books and websites already aimed at these BIY enthusiasts, he notes, “it is becoming very clear that many of the materials and methods they are using could be put to excellent use in helping to solve South Africa’s housing shortage in a cost-effective manner, while also creating many much-needed jobs”. - Saturday Star