This should help them to qualify for a home loan, especially since interest rates are already at their lowest levels in decades, and expected to fall further before the end of the year. As it is, rates have fallen by 2,25% since January, which means that the household income required to qualify for an R500,000 home loan, for example, has already declined from a maximum of about R19,300 to a maximum of around R16,400.
At the same time, he says, the monthly repayments on home loans have become more affordable, falling from R4825 a month on a 20-year home loan of R500,000 to R4,100 a month.
"In addition, there is no transfer duty on pre-owned homes priced at less than R1m – and we foresee that prices will be extremely negotiable for the next 12 to 18 months. The primary reason for this will be that there is more stock coming on to the market at the lower price levels from distressed sellers and buy-to-let investors who have lost their tenants."
The banks are obviously going to be cautious about approving new home loans in the coming months and will be looking for those with good credit records as well as steady incomes.