Gap market home buyers will be celebrating the midterm budget in which Tito Mboweni announced a further R1-billion of the R50-billion worth of government expenditure that is being reprioritised over the next three years will be directed to housing subsidies that assist more low and medium-income households to access affordable home loans and become home owners.
Rudi Botha, CEO of BetterBond, says that while the Minister did not elaborate he assumes that Mboweni was referring to boosting the number of subsidies available under the Finance-Linked Individual Subsidy Programme (FLISP) introduced some years ago by the Department of Human Settlements (DHS).
Botha explains that even if it is dolled out at the maximum subsidy of R87 000 per qualifying family the R1-billion would allow at least 12 000 new families to enter the gap market for incomes between R3500 and R15 000 per month.
“Making it available to those applying for FLISP subsidies is likely to have quite a significant effect on the real estate market over the next three years,” said Botha who adds that his company is, “delighted with this move and would urge all those seeking home loan pre-qualification prior to launching a FLISP subsidy application to do so through a reputable bond originator”.
