Following the latest interest-rate hike, individuals might be wondering whether it has become more affordable to rent rather than to buy a home. The answer to this will depend on the home\u2019s location as well as its size and its features. <\/p>\n\n\n\n
Adrian Goslett, Regional Director and CEO of RE\/MAX of Southern Africa, explains that at the current interest rate of 10,75%, the repayment on a 20-year home loan of R1,5 million will amount to just over R15 000 per month. In many areas, a tenant will end up paying a comparable amount in rent for a home of similar value. \u201cWhile it is often possible to rent a home for somewhat less than it would cost to purchase a home, it is important to remember that renting is purely an expense,\u201d he notes. \u201cOwning a home, on the other hand, provides you with an appreciating asset that can provide greater long-term financial security.\u201d<\/p>\n\n\n\n
Goslett adds the decision of whether to own or to rent will differ from person to person depending on lifestyle needs and preferences. \u201cAffordability is only one of several factors that people consider when weighing up this decision,\u201d he said. \u201cThat being said, it is still one of the biggest considerations. In some areas and within certain price brackets, you will find similar value for money for both renting and buying. But, in other areas and price brackets, renting may be more affordable than buying a comparable home.\u201d<\/p>\n\n\n\n
Commenting from within the Gauteng market, Nadia Aucamp, Broker\/Manager of RE\/MAX All Stars, says that in Germiston \u201cyou will be able to buy a house for R1,5 million in Albemarle or Dinwiddie. These houses will offer three bedrooms with two bathrooms and two living areas. When looking at the rental side, you will find a similar house in Lambton, Albemarle and Dinwiddie for around R15 000 p\/m. You will also have the option to buy a modern townhouse inside the Stone Arch complex \u2013 possibly a three-bedroom, two-bathroom unit or a two-bedroom, two-bathroom unit on the ground floor for up to R1,5 million. The rentals for these units will be only slightly cheaper than your monthly bond repayment if you\u2019re 100% bonded.\u201d<\/p>\n\n\n\n
In the Alberton area Aucamp says that while you might find a free standing house for R1,5 million, it will be easier to find a 100 m\u00b2 to 150 m\u00b2 two- or three-bedroom townhouse in this price bracket. Says Aucamp: \u201cOn the rental side, you can rent a slightly bigger 120 m\u00b2-200 m\u00b2 townhouse or home for roughly R15 000 p\/m. The houses will be in Mayberry Park, Brackendowns, Verwoerdpark or General Alberts Park area.\u201d<\/p>\n\n\n\n
Commenting about the Western Cape, Kevin Jacobs, Broker\/Owner of RE\/MAX Premier, says it all depends on the area. \u201cFor example, R15k in rent can get you a one-bed apartment at The Herschel in Claremont Upper, but could afford you a 2-bed or even 3-bed house in Plumstead, semi-detached home in Harfield Village or bachelor flat in the CBD. In general, you can expect to get at least a 2-bed rental unit for that price, be it in the form of an apartment, a house or townhouse.\u201d When it comes to purchasing a home for R1,5 million buyers could find a two-bedroom townhouse in Kenilworth or a bachelor flat in Claremont. <\/p>\n\n\n\n
Affordability issues aside, Goslett emphasises the reason somebody chooses to rent rather than to buy or vice versa will be different for everyone. \u201cAffordability will not be the only factor,\u201d he said. \u201cWhile renting will offer more flexibility than buying, owning a home will provide greater financial returns and will offer greater stability. Many renters may not realise they can afford to purchase a home because they have not yet explored the option of buying. For those who find themselves in this category I would recommend chatting to a local RE\/MAX Agent to explore all your options. Bear in mind, the sooner you can enter the property market the greater your long-term returns will be.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Following the latest interest-rate hike, individuals might be wondering whether it has become more affordable to rent rather than to buy a home. 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