Against the backdrop of the unprecedented times we find ourselves in, today’s (19 March 2020) decision by the Monetary Policy Committee to reduce the repo rate by 100bps is a critical step towards financial survival.

Apart from the tax reprieve announced by Finance Minister Tito Mboweni in the National Budget, with no major tax increases and even personal income tax relief across the board.

Fourth quarter (Q4 19) statistics released by ooba, South Africa’s leading home loan comparison service, show minimal growth of 1.8% in the Average House Price year-on-year from Q4 18 to Q4 19. The Average Purchase Price of First-time Buyers performed marginally better, up 2.5% for the same period.

Signs that the residential property market is beginning to stabilise.

Despite weak economic fundamentals resulting in negative real house price growth, the banking industry continues to show confidence in South Africa’s property market by further relaxing their lending criteria and approving home loan finance at levels last seen 12 years ago.

The laborious bond application process is even more painstaking for the self-employed and it’s critical that these buyers take the time beforehand to familiarise themselves with exactly what is required and the criteria to be met as applications can easily be delayed - or even declined - due to simple omissions or errors.

New Mortgage Lending continued its year-on-year decline in the 1st quarter of 2019, with the Commercial Mortgage Lending and New Building Mortgage categories being the major “drag”

Buying a new home continues to become more affordable as weakening housing demand results in ongoing negative real price growth (after inflation) in the residential property market.

One thing is certain, apart from the overall inflationary impact, the spiralling cost of fuel directly impacts on the demand for conveniently situated, sectional title property in key economic hubs – close to the workplace, schools and all amenities.

2018 was a challenging year for the South African property market, with negative real price growth in the residential property market and slowing market activity.