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SARB leaves Repo Rate unchanged after only 1 x 25 basis point cut in the current cutting cycle. Weak consumer confidence likely to remain, and shift to a more cautious consumer expected to continue says John Loos, Household and Property Sector Strategist.
Examining recent years’ of improvement in both the Household Sector Debt-to-Disposable Income Ratio (decline) as well as the Household Sector Net Savings Rate (rise), it would appear that weak consumer confidence levels in a stagnant economy are encouraging households as a collective towards a more cautious financial approach.
After declining by 11 points in 2Q2017, the FNB/BER Building Confidence Index improved by 3 index points to 35 in 3Q2017.
2nd Quarter 2017 SARB New Mortgage Lending data, released in the latest SARB Quarterly Bulletin, showed a renewed slowing in the year-on-year growth rate into negative territory in the 2nd quarter, after a briefly positive growth rate in the 1st quarter of 2017.
Periods of strong housing market price growth can often be a cause for concern..
The FNB Holiday Towns House Price Index, comprising towns (both coastal and inland) whose housing markets are deemed to be strongly driven by holiday home demand, has had a reasonably good run since around 2013.
Recently, there have been hints emanating from our FNB Estate Agent Survey that foreigner demand for local residential properties may be declining.
After reaching its highest level in more than a year of 43 points in 1Q2017, the FNB/BER Building Confidence Index fell sharply to 32 in 2Q2017.
It is important to understand that, due to significant resistance by home sellers to house price declines, in times of economic and residential demand slowdown the residential market can often move away from market equilibrium price.
Our 1st quarter 2017 Gauteng Sub-Regional House Price Indices show mediocrity in terms of house price performance to be widespread.