South African bond originators predict that house sales will spike in coming months, coinciding with what they feel is a meaningful increase in the level of disposal income.
Shaun Rademeyer. Chief Executive of BetterBond, said a series of events will cause this spike. One of the more significant, perhaps, was the interest rate cut announced by the South African Reserve Bank two months ago.
“These figures correspond to a decline in the average percentage of purchase price being paid as a deposit in the year to end-August, from 22 percent to 20 percent,” said Rademeyer on Monday.
“And the overall picture is one of increasing home affordability,” added Rademeyer.
“Wage increases, declining inflation and a small interest rate decrease have all played a part in this growth, which simply means that many prospective homebuyers now have more of their take-home pay available to put towards a monthly bond repayment.
“This is excellent news for the real estate industry, because it makes the banks more likely to approve home loan applications – and to lend a bigger proportion of the home purchase price. And taken together with the drastic slowdown in house price growth over the past 12 months from 9,9 percent to just 2,2 percent, this definitely opens the door to more successful home sales.”