Demand for house loans now much beyond what it was in 2019.
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According to new data, South Africans are buying homes at a dizzying pace, with higher-end properties seeing increased demand. In the second quarter of this year, home loans worth more than R56.6 billion were approved, up more than 40% over the same period last year, before the Covid-19 outbreak.
In the same quarter of 2020, less than R13 billion in housing loans were approved, indicating the negative impact of the hard lockdown period. Since July 2020, the prime lending rate has remained at 7%, with the Monetary Policy Committee (MPC) choosing in September to retain the repo rate at 3.5 percent for the seventh time.
The value of mortgages granted in the second quarter of this year was 4%higher than the total value of R54.27 billion granted in the first quarter, per the National Credit Regulator’s (NCR) Consumer Credit Market Report for the second quarter of 2021. The number of home loans granted also rose marginally.
In the second quarter, nearly 90% of mortgage agreements authorised were for more than R700 000.Demand for homes has been fueled by a record-low repo rate, especially at the bottom end of the market.
According to Lightstone Property, property prices below R250 000 increased by more than 12 percent in the year to August, while house prices below R700 000 increased by 5.9%. Houses worth more than R1.5 million, on the other hand, increased by 4.9 percent.
Story by : Norvisi Mawunyegah