Want to save a few hundred grand on a property? Here’s how to hustle your dream house for cheaper
Thread covers:

1. Get a grip on price trend
2. Drive asset price lower
3. Access cheaper financing
4. Reduce the acquisition leverage
5. Use a subsidy
6. Weigh up off plan purchases
7. Use a buy-side agent
8. Scrape historic data
9. Check “true” affordability
10. Leverage time
2. Negotiate asset price
1. Price Trends

Luxury houses (>R1.5m) briefly lost value over the pandemic. Low value houses (<R250k) show the sharpest decline in inflation. Coastal properties hold up slightly better. Both free holds & sectional titles have slower price growth.

Know what you’re buying into.
When you log onto Property24 don’t panic! That’s not the final house price. At one point only 2% of sellers received their property asking price

Average discount to selling price is 12%. When you lock in an offer to purchase, start at least 20% lower
=> Impact of negotiating a lower asset price

On a R1m house, the 15% reduction is R150k at face value… except over the life of the home loan you’re saving R300k.

That’s over 27 years of daily cappuccinos you did not have to cut out through one decision.
3. Access cheaper financing

Banks will try to persuade you not to log multiple applications & tell you it hurts your credit score – the impact is very marginal.

Don’t take the first bank home loan rate you receive. Play banks each other & push for EVERY tiny reduction.
=> Impact of negotiating a lower interest rate

On a R1m house, a 1% interest rate reduction ends in a R140k saving (assuming you did not negotiate the asset price)

That’s over 12 years of daily cappuccinos you did not have to cut out through one decision
4. Reduce acquisition leverage

Paying a larger deposit will save you plenty of racks. How much do people pay as deposits?

– R500k- R1m, average deposit is 6.5%
– R1m- R1.5m, average deposit is 2.6%

Banks will offer up 100% financing (no deposit) but that isn’t a good thing
=> Impact of paying a deposit

On a R1m house, a 10% deposit ends in nearly R195k in savings (assuming you did not negotiate anything else)

That’s close to 18 years of daily cappuccinos with one upfront tweak
=> putting it all together on a R1m house

– Negotiate house price down by 15%
– Reduce interest rate by 1%
– Pay a 10% deposit

BOOM! R600k

55 years of cappuccinos right there

That’s R600k that can go towards a second property. Every decision here was made upfront
5. Use a subsidy

There’s a chance you qualify for a housing subsidy. In South Africa, FLISP is a great one to check out. Here’s a useful
IMPORTANT! If you’re a first time South African home buyer earning between R3,501 & R22,000 a month you could be eligible for a government subsidy for over R120,000

It’s called the Finance Linked Individual Subsidy Programme (FLISP)
1. Why was FLISP introduced?

It’s aimed at filling the affordability “gap”. Your income might be too high to qualify for government “free housing” but at this salary you may still find it tricky to repay a home loan.

The subsidy makes monthly payments more affordable.
2. Do I qualify for FLISP?

– First time home buyer
– Must be a South African citizen
– Older than 18
– Have an approval (in principle) for a home loan
– Must have financial dependents
– Must never have benefitted from a government housing subsidy scheme before
3. How much can I expect to receive?

It works on a sliding scale. The more you earn, the lower the subsidy. Here is the subsidy for each salary band:

If you earn between R3,501 & R3,700 your subsidy is R121,626

If you earn between R21,801 & R22,000 your subsidy is R27,690
4. What types of property can I use FLISP for?

The subsidy can be used to finance a number of different property types. You can:

– Buy an existing (new or old) residential property
– Buy a vacant serviced residential-stand
– Build a residential property
5. What if I already qualify for the full amount of the home loan from the bank?

If you qualify for the full amount of the home loan, FLISP can be used as a deposit to reduce your loan with the bank.

Here’s a worked example from the National Housing Finance Corporation (NHFC).
6. What if I need to qualify for a more expensive house?

Here FLISP will pay a top-up payment to get you up to the value of the home loan you are aiming to get.

The subsidy can be used to pay a deposit (if you qualify) or top you up to the loan amount (if you don’t qualify)
7. How do timelines work? What gets submitted first?

– Put in an offer to purchase & submit FLISP application
– Apply for bank loan
– If loan is approved, FLISP application is processed
– The subsidy is paid directly into relevant account
8. Where can I apply?

Here is a direct link to the FLISP application form:

This form can be accessed from the NHFC website here:

All FAQs answered here:

Additional reading:
9. Are banks aware of FLISP?

Most accredited banks know about FLISP.

Make sure you’re aware of how the subsidy amount you qualify for so you can let the bank know you submitted an application & this can help your negotiations in getting your home loan over the line
10. Do I have to repay the FLISP subsidy?

No, you do not repay this at any point.
Shout-out for making it to the end of session.
  Here’s to rich success in finding your crib – we’re here to share the cheat codes.

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6. Weigh up off-plan purchases

Typically by buying into a new development VAT is included in the purchase price and you save on transfer duties.

Be very careful of charlatan developers, research their history, ask questions about occupational rent & really inspect the finishes!
7. Use a buy-side agent

Agents are paid fees by the seller and they’re incentivized to push a sale & not necessarily what’s best for you as a buyer.

You can hire out an experienced agent to consult for you as a buyer. It may end up being the best couple of grand you spend.
8. Scrape historic data

You can pull a registry of past property sales, how many people have moved out of the complex and compare prices in the same suburb.

This will give you the ammo for strong negotiating.

A great resource is Lightstone:
9. Check “true” affordability

Qualifying doesn’t mean affordability

Being eligible for a home loan is a great but once you overlay rates, levies, maintenance, insurance, utilities and security, costs rack up quickly!

Add 40% onto your bond and see if you’re still comfortable
10. Take your time

Average house in SA spends 9.4 weeks on the market, some houses spend FAR longer listed. The longer the listing period, the better you bargaining strength.

Find out why people are selling. Check if it’s a high crime area vs. the owner downsizing.
=> Useful resources ++ source links

Sector data:

Residential property data:

Pricing calculator:

Additional sector insights:

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