Buying property in a down market could score you a ‘bargain’

PUBLISHED 10 JAN 2019   

The South African economy remains weak, having recently exited its first recession since 2009, but for home buyers who are financially ready there are real opportunities to be had.


Aim to save between 10% and 12% of the purchase price and if you want to pay less in upfront costs, consider buying a house at a lower price.

Nedbank senior economist, Nicky Weimar, says that “bargains can often be found in tough economic periods. House prices have fallen in real terms in recent times and this may have helped affordability for potential buyers who are financially fit and looking to enter the market or to upscale”.

Buyers will need to take a realistic look at their financial situation and prospects before making a decision to buy a house. When faced with a tough economic condition, it is especially not a good time to take any additional financial risks.

Bruno Ching’andu, Head of Customer Strategy at Nedbank Home Loans, advises potential buyers to review their credit score, make provision for the upfront costs, decide on where you’d like to buy and look into the value of the properties. Not only will this help you to determine whether you are financially ready to buy a home, but it will also prepare you for the process.

1. Your credit score 

An important place to start in determining your financial readiness is to ensure that your credit profile is intact. Your credit score is provided by credit bureaus and used by most financial service providers as an important indicator of your credit standing (worthiness).

It indicates how much debt you have including your payment history. If your score is below a prescribed number, it may indicate that you have some work to do before embarking on the home-buying journey. Consumers are eligible for one free annual credit report which can be obtained from Experian at or TransUnion.

2. Upfront costs 

There are various upfront costs that you should consider and make provision for when buying a house. Failure to do so could result in you acquiring additional debt, putting you under more financial strain. 

See what your upfront costs will be when buying a property


It is advisable to save an amount of between 10% and 12% of the purchase price to cover the upfront costs.

3. Bond initiation fee 

The bond initiation fee is charged by the bank for processing the home loan application. The initiation fee will not exceed R6 037.

4. Bond registration costs 

The bond registration fee is charged by the registering attorneys who get your bond registered and the title deed processed. The amount varies based on your home loan amount and is based on tariffs recommended by the Law Society.

5. Transfer costs 

The transfer costs are charged by the transferring attorneys to get ownership of your new home transferred from the previous owner to you, and to get the property registered in your name. The amount varies according to the purchase price of the property and the costs are based on tariffs recommended by the Law Society.

6. Transfer duty 

The transfer duty is a government tax levied to transfer the property into your name and is payable to the transferring attorneys. It is the largest of the upfront costs. If you want to pay less in upfront costs, you may want to consider buying a house with a lower property value.

There is no transfer duty on properties under R900 000.