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Affordable housing

Monika Singh
Tuesday, October 17, 2017

WITH government's focus on providing affordable housing to members of the public, various stakeholders have come forward with different plans and incentives for first home buyers.

Recently the Housing Authority CEO Dr Punit Sethi introduced their new home loan facility in line with Government's priorities in making home ownership affordable for all Fijians through the initiatives and assistance by the Reserve Bank of Fiji (RBF).

Under the facility single applicants or joint applicants with an annual income or household income of $50,000 or less and are first time homeowners, qualify for this scheme.

This facility provides an ideal opportunity for Fijians to own their first home and under this new facility, customers will be able to enjoy the following interest rates, the lowest in the market:

* 3.95 per cent per annum interest rate fixed for one year;

* 4.20 per cent fixed for four years; and

* Variable rate thereafter (reduced to 6.99 per cent).

While the different loan facilities are available at the banks there are people who are using the expertise of local real estate agents to find affordable properties for either rent or ownership.

Bayshore Real Estate is a growing name in real estate and its managing director Arif Khan says they have a lot of clients who are either looking for property to rent or to purchase.

Mr Khan said the driving factors for buying a home in Fiji should be the affordability index that was the debt to income ratio and the price of the property to income ratio.

He said the affordability index was the percentage of the homeowners income devoted housing (mortgage payment) while overall affordability would be the cost of the home based on the median income.

"A potential homeowner should also look at the rent to own analysis, whether it is more affordable to rent or to buy.

"Given the escalating rents and the high liquidity in the market driven by low interest rates, for several homeowners, it is still an ideal time to buy," he said.

Mr Khan said home ownership should be a "Fijian Dream" and they did notice several policies towards making home ownership much easier.

"HFC Bank has released an excellent loan package for first time home buyers earning under $50,000. Within the city areas, there is a push for strata titles or condominium that are very popular in high density city limits."

Mr Khan said at Bayshore they preferred to give homeowners a first opportunity to purchase properties.

"Due to the limited inventory, there is strong competition from investors. There should be a first look period of say a two weeks for potential first time home buyers before opening up to investors. We are currently dealing with 15 home owners that have either closed or are in contract for settlement."

Mr Khan said there had also been some changes in the trend of home buyers whereby there was a pent up demand from home buyers especially in the West.

"Given the low interest rates, the demand would continue to the limited inventory," he said.

"I would encourage first time buyers to get the loan eligibility in order and thereafter discuss their housing needs with a licensed real-estate agents before going on a property tour.

"Buyers need to go online and start viewing properties whether it is company websites or in order to get an idea of the median price. Buying a home involves a lot planning as well as saving for down payment. Therefore, it is ideal to reduce debt as one prepares to buy a home. Most homes need some renovation, therefore, if the buyers plan and budget their renovation, they will be successful in achieving home ownership faster."

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