Na­tional Credit Act still lim­it­ing sales

Business Day - Home Front - - HOMEFRONT -

STRIN­GENT CRI­TE­RIA The re­cent half a per­cent­age drop in the in­ter­est rates, though wel­come, is not as sig­nif­i­cant a boost to the res­i­den­tial mar­ket as might be ex­pected, says Lan­ice Stew­ard, MD of Cape Town es­tate agency Anne Porter Knight Frank. “We have to take into ac­count the rises in rates, elec­tric­ity costs and fuel prices all of which to­gether will nul­lify the 0,5% re­duc­tion. At the same time we can be grate­ful for it be­cause in a sense it keeps home buy­ers on roughly the same bud­get as they had pre­vi­ously.”

The chief lim­it­ing fac­tor to growth in the res­i­den­tial prop­erty sec­tor, said Stew­ard, is still the Na­tional Credit Act and the strin­gent cri­te­ria that it has caused the banks to im­pose. Nev­er­the­less, said Stew­ard, even here there is some good news. “The lat­est oo­barom­e­ter shows that the size of bonds in Fe­bru­ary 2010 was 13,9% up on those of Fe­bru­ary last year… partly be­cause prop­erty has slightly in­creased in value (the av­er­age South African home sold in Fe­bru­ary last year at R807 042 but the lat­est fig­ure is R895 031) but also be­cause the banks are now more will­ing than pre­vi­ously to ac­cept smaller de­posits.” There has also been a marked in­crease (29%) in the num­ber of 100% bonds is­sued.

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