The January oobarometer price index shows a decrease in the average house price growth by 4.8%. "The oobarometer shows that the property market is continuing its negative trajectory," says Saul Geffen, chief executive of ooba (formerly MortgageSA).
ooba (formerly MortgageSA) welcomed the second interest rate cut of 1% in the current interest rate cycle announced today by the South African Reserve Bank. The latest 1% cut in interest rates will save home owners R730 a month on a R1m homeloan over a 20 year period.
South Africa's largest bond originator calls for a full 1% interest rate cut at February's Monetary Policy Meeting (MPC) saying that the time is right for bolder measures. "Property owners won't benefit from half measures this time," said Saul Geffen, chief executive of ooba, (formerly MortgageSA).
Thousands of homeowners are overpaying on their homeloans in an effort to reduce their debt - and many more are expected to keep their monthly repayments up even though they have started to decline with lower interest rates.
ooba (formerly MortgageSA) welcomed the 0.5% interest rate cut announced yesterday by the South African Reserve Bank which will save South African home owners an estimated R259m in home loan repayments each month, but says more cuts are needed.
The November 'oobarometer' price index shows flat average house price growth year-on-year. The oobarometer indicated an increase in average purchase prices of 10.2% from October to November.
South Africans spent over R10 billion during the festive season last year. This year ooba suggests carefully planning your holiday season spending to avoid a financial hangover in January 2009. "Festive season debt can take months to pay off in the new year," says Jenny Rushin, Provincial Sales Manager for ooba (formerly MortgageSA).
Interest rates need to be cut by 1% immediately to help already overburdened consumers, kick start the stricken property market and restore consumer confidence. Rhys Dyer, CEO of ooba (formerly MortgageSA) says that South Africa should follow international lead and cut rates at the next monetary policy meeting in December.
Weak economic conditions, higher interest rates and the global credit crisis have forced banks to be far more picky about who they will lend money and less generous with their lending rates. But Mary Jane Lefevre, Regional Sales Manager of ooba, said that before you apply for a home loan, there are steps you can take to improve your credit status and encourage lenders to look more favourably on your application.
The global stock market meltdown and worldwide banking failures are likely to spur renewed interest in the safety of bricks and mortar.
Interest rates have gone up from 10.5% to 15.5% since June 2006 which means that home owners are paying an additional R3 555 on an R1m bond size. This coupled with huge increases in the petrol price and high inflation rates are squeezing disposable income making the average property owner more susceptible to defaulting.