Women are increasingly becoming savvy investors and, despite a legacy of earning less than their male counterparts, are enthusiastically entering the investment arena, says First National Bank (FNB).
The FNB Residential Property Barometer, which reviews activity in the residential housing market on a quarterly basis, showed that 20% of buyers in the last quarter of 2005 were solely women, up from 15% in the previous quarter.
Ed Grondel, CEO of FNB Home Loans, says it is encouraging to see these figures steadily increasing, as it is a good indicator that women are taking responsibility for their future financial wellbeing. Home ownership is not the only place where this impact is being felt, though, as a growing number of women are opting for long-term investments in the way of fixed or notice deposits, with women accounting for 53% of the total investment book at FNB.
“The growth in home ownership in part can be attributed to the recent property boom brought about by the rapid drop in lending rates. This further increased the number of properties being used as a form of investment, particularly with many eyeing out the buy-to-let market,” adds Grondel.
“While there is talk that the boom is over, there are still investors out there continuing to reap the rewards of some well-chosen property investments.”
According to Grondel: “The opportunities presented in the buy-to-let market haven’t completely disappeared, they have just shifted. Instead of the rapid growth that investors experienced a few years back, today’s investor must be prepared to look at a return over the long term coming from capital growth over a number of years.
“Furthermore, with interest rates likely to remain stable over the long term and the overall residential property market continuing to return to realistic growth levels, property as an investment would appear to be a channel that will continue to give solid returns, not as prone to the levels of volatility seen in the late nineties,” he adds.
“The latest changes coming out of the National Budget, which make properties of R500 000 or less exempt from transfer duty, are welcome relief, not only for those entering the property market for the first time, but also for those looking for a secondary property as a form of investment.
“With acquisition costs of mid-priced properties significantly reduced, this may be the factor that tips the scales for those thinking of taking the plunge,” comments Grondel.
“Interestingly, it is also the mid-priced market (properties priced between R400 000 and R750 000) that is currently enjoying the highest levels of year-on-year growth. The FNB Residential Property Barometer shows growth of 26% in the mid-priced market of Johannesburg for the last quarter of 2005. This out performs the national average of 19%.
“In all cases, consumers need to be realistic about their purchase and weigh up all the possible risks. Above all, the would-be investor must be in a position to afford the bond payment together with all other costs [including rates or levies, maintenance etc] on the property to ensure they can sustain their investment even in the absence of a tenant,” concludes Grondel. — I-Net Bridge