Illustration: Freepik 
Is owning a residential property still considered the ideal route to financial security? High interest rates, remote working and increasing mobility are causing South Africans to question the long-held belief that buying a house is the best investment.
This was the focus of the latest Money Cents webinar hosted by Neesa Moodley, Daily Maverick’s business editor. She was joined by Rhys Dyer, the chief executive at ooba, and Warren Ingram, a personal finance author and certified financial planner at Galileo Capital.
The panel tackled the question by exploring the realities of property ownership.
The South African property market has been turbulent. Dyer highlighted that some homeowners have seen repayments rise “upwards of 40%” over recent years, despite interest rate cuts over the past year. Demand, he noted, remains subdued.
Ingram urged caution: “If a 0.5% difference in interest rates makes a property affordable to you, I’m going to argue the property is not affordable. You shouldn’t be doing it.” He advised homeowners to maintain a buffer capable of handling 50% to 60% increases in mortgage repayments to avoid financial strain.
Buyers who focus solely on home loan repayments often overlook the additional expenses. Ingram called these additional expenses the “silent killers” – think legal fees, transfer duties, municipal rates, levies, insurance and maintenance.
“Property decisions should be monumentally slow, like even slower than a tortoise,” he said. He added that constant buying and selling primarily benefits lawyers and estate agents. Home ownership only becomes a financially sound investment when you plan to own the home for a decade or longer.
How buying property has evolved
Dyer noted that 10% to 15% of applications now stem from multiple buyers, for example friends or unmarried couples who pool their resources. The other trend pointing to affordability issues is the increasing use of 30-year loan terms, which account for 30% of applications.
Although these longer loan terms lower monthly payments, Dyer cautioned that banks charge higher interest rates over the term. However, many buyers use this approach to get on the property ladder.
Asked about property investment hotspots, Dyer singled out the Western Cape. “Thirty-one percent of our home loan applications last month in the Western Cape were investment buyers, compared with just 5% to 6% in Gauteng.”
Ingram, however, held a contrarian view: “There is real value in Joburg, so don’t be afraid sometimes of swimming against the tide a little bit.”
He explained that cautious, well-informed investors can make strong returns when entering markets others avoid.
The audience asked whether to keep a home loan open after paying it off, and Ingram and Dyer both recommended it.
Ingram called an access bond “the best emergency fund there is”. By paying extra into your bond, you earn a guaranteed, tax-free return while keeping funds accessible.
Dyer added that access bonds remain “an immediate source of funds that you can access very, very quickly”, highlighting their practical use.
A couple asked about the wisdom of buying a second property as an investment at the age of 75. Both Ingram and Dyer advised against this. Ingram explained that the long-term nature of property and its high transaction costs make it difficult for retirees to reap the full potential of such an investment. He suggested that diversifying into a balanced unit trust would offer a more stable income while still giving homeowners the benefit of tax advantages on their primary residence.
The webinar ultimately revealed that the question of whether a house is a good investment has no simple answer. The panel concluded that for a house to be an effective tool for building wealth, it must be viewed with the same caution and discipline as any other asset.
Ingram offered a powerful final thought for those considering becoming landlords: “I always think… you’re actually going into a business. You’re not investing in property. You’re in business and the business happens to be the business of property.”
His words serve as a potent reminder that, for homeowners and investors alike, successful property ownership is not a matter of luck or sentiment – it’s the result of careful planning, robust financial buffers and an unblinking focus on the bottom line. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
