Younger buyers find new property investment techniques
SA Property News:
As property prices in South Africa continue to increase younger buyers and first-time home buyers are having to explore alternative options to investing in property.
SA Mortgage Originators are reporting an increase in consortium-buying and many of these are groups of young buyers who are choosing to pool their finances into one large property.
Gareth Masters, GM of yourhomeloan explains that co-ownership and co-financing is the perfect solution for young or first-time buyers since the banks evaluate home loans based on those involved in the consortium, so buyers benefit from larger loans than they would be able to afford by themselves.
The disadvantage of buy a single property as part of a consortium is that you may have to share the house with other members of your group, which could cause problems if you wanted to sell the property – since the other members would also have to agree to sell the property.
Although banks do offer finance to consortiums, it is not a market they would actively pursue.
Ed Grondel, chief executive officer at FNB homeloans, said: “The deals are complex and consortiums approach us as a trust or a company so we deal with them as we would an individual.”
He said many consortiums were buying houses or properties as investments rather than as a place to live.
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Category : Property News