Being able to afford a house is still tough

By Staff Writer
Despite the fact that property prices are starting to bottom out, it's becoming increasingly difficult to actually own a home due to the fact that the gap between wages and house prices continues to widen.

This information was released in said First National Bank (FNB) monthly House Price Index which was released last week.

"The current average price for a home is R779 546 but the growth has brought an end to affordability rent," FNB property expert John Loos said.

" Last year, house price deflation and ongoing wage inflation had the effect of making homes more affordable.

"The improving trend in affordability has probably come to an end for the time being, following both measures of affordability having dropped back [improved] to around the affordability levels last seen in the second half of 2004," Loos added.

Realtors however, believe that the recent rate cut will make it easier for people in the low to mid-price levels and could even lead banks to slightly relax their lending criteria.

While it is evident that the economy is starting to recover - it's likely that it will be a slow recovery and the sustainability is questionable - the same goes for the property market.

"From a residential property perspective the same sentiment would apply. While there continue to be signs that the market is recovering, prices are going to be slow to respond and that high levels of indebtedness are going to continue to be a factor affecting affordability," Jawitz Properties CEO Herschel Jawitz said in a statement.

As long as the gap between wages and the cost of living and homes continues to widen, though, buying and affording a home will continue to be a distant dream for most especially with debt levels being very high after the recession.

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