Just Letting
whereas growth in household mortgage balances
remained very much subdued at just above 2% y/y.
Growth in outstanding household mortgage
balances was virtually flat at 2, 2% y/y at the end
of January from 2, 3% y/y at the end of December.
The value of outstanding mortgage balances is the
net result of all property transactions related to
mortgage loans, including additional capital amounts
paid into mortgage accounts and extra monthly
payments above normal mortgage repayments.
A number of macro economic factors, such
as economic growth, employment, inflation and
interest rates impact household finances and the
level of consumer confidence, which eventually
affects the demand for property, as well as the
affordability and accessibility of mortgage finance. A
relatively large number of credit –active consumers
had impaired credit records towards late last year,
negatively affecting credit-risk profile, which impact
banks’ risk appetite and lending criteria. Consumer
price inflation dropped to 4, 4% y/y in January on
the back of significantly lower oil and fuel prices.
However, inflation is forecast to rebound in the
coming months, which is expected to lead to higher
interest rates by September this year and in 2016.
Against this background, growth in household credit,
including mortgage advances, is expected to remain
in single digits during the next two years.
Outlook for the property market, however,
remains favourable. A few key statistics point
towards a trend of ongoing growth. One of these
factors includes higher bank approval rates, higher
approved bond sizes, lower deposits and improved
bank pricing.
There are a number of indicators that have
demonstrated banks improved appetite for extended
credit for home loan ̸