THE r and t ested fr esh eight month lo ws against the dollar yesterday, hitting 11,2605.
Yields on g overnment bonds r ose 8 basis point s t o 8 ,245% on the benchmark 2026 is sue.
Stocks ek ed out g ains y esterday, snapping a f ourday lo sing s treak. The mark et is s till under pr essure and the benchmark Top40 inde x clock ed up it s bigg est weekly decline since June last year and is on c ourse for it s steepest quarterly fall since the thir d quarter o f 2011. The inde x is do wn 3, 1% this quart er, which ends on T uesday, the biggest f all sinc e the s ame quart er in 2011 when it f ell mor e than s even per cent.
Lonmin clo sed 2,5% lo wer as the pr ecious metal fell 0,4% to $1 300,49 an ounce.
The T op40 finished 0 ,37% higher at 44 507. The wider Allshar e inde x added 0,32% t o 44 663. — R euters.
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The reason is the short age of r esidential stock f or sale in popular ar eas and lack of new development to take up the slack, which has caused house pric es to rise f aster than expected, he said.
These price increases make it more difficult f or pr ospective bu yers t o qualif y f or home loans now, even if they are able to borrow at prime.
The average home price rose eight percent in the 12 months t o endAugust, while the average wage increase was only about six percent. “At the same time, the higher c ost of living as well as interest rate increases totalling 0,75 percentage points since the be ginning of the y ear, have eaten into the “fr ee” income available to cover a home loan repayment,” said R ademeyer.
The best course for prospective home buyers now was to try to save up bigger deposits before entering the market to make it easier for them to qualify for a loan and lower their monthly home lo an ins talments.
“In addition, they should obtain prequalification f or a home lo an before s tarting to look for a property, so they know what they can realistically afford — be sure to apply for their lo an thr ough a r eputable mort gage originator as this will give them a much better chance of securing an approval,” he said.
Marcus last week decided to keep the repo rate at 5,75% and prime (as well as the variable home lo an int erest r ate) at 9 ,25%.
As a r esult, the r epayment on a 20y ear home loan of R757 125 — the current national average approved bond amount — s tays at R6 934.
The repayment on the average home loan of R586 705 that is currently being approved for fir sttime bu yers s tays at R5 373.
Seeff chairperson Samuel Seeff said home sales activity is showing real upward movement in the primary urban sectors and in the secondary c oastal mar kets.
“Buyer urgency has grown, there is limited supply of property … Multiple offers are becoming c ommonplace with seller s g etting close to and, in some ins tances, more than their asking pric e. Where it t ook about 20 weeks to sell the a verage home pos t 2009, it no w t akes about t wo weeks,” said Seeff .
Sanlam economist Arthur Kamp said real interest rates, including the R eserve Bank’s repo rate, remain well below historic averages and the insurer expects the bank to shift towards a le ss ac commodative s tance o ver time.
“On balance, the be st we can sa y is that the bank will pr obably continue to hike its policy rate albeit at a sedat e pace into 2015 … given the persistence of lowrisk free real interest rates abroad, we expect the domestic real policy rate to remain low relative to its longterm average for an e xtended period,” he said.