He says, approval ratings remain elevated when compared to prior years, suggesting that the aggressive interest rate cuts in the first half of 2020 have ensured that more applicants are now eligible for a mortgage than was previously the case.
for mortgage extension by local financial institutions,” he says.
Dr Golding says double digit growth in house prices was last recorded briefly in 2010 and again in 2015 / 16. He says the current robust growth in average and first-time home buyer prices is similar to the surge in prices in the wake of the global financial crisis and subsequent recession. However, a key difference is that, during the global financial crisis, house prices were actually declining from year-earlier levels, prior to the 2009 / 10 recovery in prices.
“ Given the weak state of the South African economy prior to the onset of Covid-19, the current strong growth in house prices( both average and for first-time home buyers) is undoubtedly attributable to the aggressive interest rate cuts last year and a strong appetite
According to Pam Golding Properties’ senior research analyst Sandra Gordon, Ooba data shows that the average price paid for a home by first-time home buyers has grown at a faster pace than the increase in the overall average price paid since 2016.
“ This trend has continued into 2021, with increases in house prices continuing to record double digit growth rates,” she says.( See chart below)
“ Encouragingly, the smoothed percentage of mortgages extended to
26 JUNE 2021 SA Real Estate Investor Magazine