SA Property Market News - Buy-To-Let Homes Home Loan Applications Has Risen In SA To 2009 Levels

Buy-to-let homes are on the rise in SA, according to ooba Home Loan's report of a year-on-year growth of just over 13% in home loan applications for buy-to-let or investment properties - a level of demand that was last seen in 2009.

With buy-to-let homes, a homebuyer purchases a property for the sole purpose of renting it out to cover one's bond and to yield a profit in the long run.

According to Rhys Dyer (ooba Home Loans CEO), obtaining the best possible interest rate on your home loan is crucial in maximising your return on investment. It is also advisable to save up for and to put down a deposit, if possible, as this reduces any gap between your rental income and your home loan repayment. Using a home loan comparison service to shop around for the best possible interest rate on your home loan is always the best way forward.

Despite heightened interest rates, Dyer advises that homeowners can stand to make a rental yield of between 5% and 10%, depending on their interest rate, where the home is located, the rental amount charged and the size of the bond.

Buy-to-let properties is the ideal avenue for first-time homebuyers to sink their teeth into property investments. Ooba is also seeing a demand from both second-time homebuyers looking to start their investment portfolio as well as seasoned property investors.

Lock-up-and-go properties remain a popular choice among savvy investors and these units generally attract a large pool of tenants, offer safety and security, and they're easier to maintain.

At a regional level, the Western Cape registered a sharp increase in applications for buy-to-let properties as a percentage of total applications in February 2023, rising from 18.1% in January to 21.9% in February which exceeds the pre-Covid-19 high of 21.5% in March 2020.

While KZN, the Northern Cape, and Mpumalanga have registered notable demand, Gauteng and the Free State have shown a decline in applications in recent months.