Government’s gap housing plan important to build long-term wealth

Samuel Seeff

Government’s announcement that the R1 billion housing fund to assist home buyers who fall above the RDP housing bracket, but do not qualify for mortgage loans has been welcomed by Seeff Chairman, Samuel Seeff as a step in the right direction.

The fund will come into effect in April this year and will provide a subsidy of up to R83,000 for buyers that earn between R3,500 and R15,000. The main objective is to enable such buyers to obtain housing finance from an accredited bank.

Seeff says that this is indeed great news for first time home buyers and should also instil some confidence in the affordable home market and assist the banks in making more funding available to this sector of the market. He says that no price can be put on owning the roof over your head and home ownership is something that is important for all South Africans. Owning your own home creates long-term security and stability and is a foundation upon which to build a life and raise your children.

Investing in your own home is also one of the most effective ways to build wealth. Paying off a mortgage loan is in many ways a forced saving and while home ownership is not just about the investment potential, it is still a comparably safe way of investing money. If you hold on to it long enough, history has shown that it will accumulate capital appreciation. It creates a foundation for future growth and will have a positive effect on the country’s GDP.

This announcement, he adds has come at the right time and will inspire more people to invest in their own homes. Now is indeed a good time to buy with market conditions heavily weighted in favour of buyers. Mortgages are more affordable than ever, but Seeff warns first time home owners to ensure they buy within their means and build in a buffer to allow for possible interest rate and basic utility cost hikes. Rather start small and add as your economic circumstances improve, he concludes.