Home buy­ing ex­pected to take turn for worse

Weekend Argus (Saturday Edition) - - PROPERTY -

re­strict growth in the long term. Inevitably, all types of in­vest­ments, in­clud­ing all types of prop­erty, will be neg­a­tively af­fected by such an out­come.”

Much of this is echoed by FNB’s house­hold and prop­erty sec­tor strate­gist, John Loos, who em­pha­sises that although the bank is see­ing an in­crease in home loan vol­umes, there is also “quite a time lag” from when peo­ple first start view­ing po­ten­tial homes to when they sub­mit their home loan ap­pli­ca­tions.

Up un­til the first quar­ter of 2017 at least, he says signs of eco­nomic im­prove­ment, along with mild res­i­den­tial mar­ket im­prove­ment, were show­ing.

More re­cently, how­ever, the much- pub­li­cised ratings agency down­grades may have damp­ened sen­ti­ment in April/May to date.

If this is the case, Loos says the bank may soon feel it in its own home loan ap­pli­ca­tion num­bers.

But only time will tell be­cause, so far, there are no wide­spread signs of panic sell­ing or huge in­creases in fi­nan­cial stress. Sen­ti­ment though, is “not overly pos­i­tive”, and there has been a mild in­crease in the per­cent­age of sell­ers sell­ing in or­der to em­i­grate, from a low of 2% at the end of 2013 to 6.2% by the first quar­ter of 2017.

“In short, we see a mar­ket where sen­ti­ment cer­tainly isn’t won­der­ful out­side of the Western Cape – although it is slow­ing there too now, and low house price growth and the mar­ket as a whole has not had much trans­ac­tion growth for some time.

“To date we have ex­pe­ri­enced a weak but rel­a­tively calm mar­ket, but it is def­i­nitely pos­si­ble that the wide­spread pub­lic­ity given to South Africa’s newly ac­quired ‘junk sta­tus’ may have damp­ened sen­ti­ment from April on­ward.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.