Interest rates unchanged after MPC meeting
http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page228?oid=62772&sn=Detail

After a two-day meeting, the South African Reserve Bank’s Monetary Policy Committee (MPC) left the key monetary policy interest rate – the repo rate – unchanged at 6,5%. As a result, banks’ lending rates to the public, i.e. prime and mortgage rates, are to remain at a level of 10%. Interest rates have been cut by a cumulative 550 basis points since December 2008.

Consumer price inflation is currently below 5% year-on-year (y/y), but factors such as double-digit administered price inflation and wide-spread wage hikes of well above inflation pose some risk to the inflation outlook. No further rate cuts are forecast for the rest of the year, with a rate hike expected by mid-2011 due to inflationary pressures. Mortgage repayments are still about 29% lower compared with late 2008, when the mortgage rate was at a level of 15,5%. However, the household sector remains heavily indebted, with the ratio of household debt to income at 78,4% in the first quarter of 2010, and expected to remain around the 78% level towards the end of the year. The debt ratio is forecast to rise marginally during 2011.

(via Instapaper)

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The mortgages rules for building yourself
http://www.iolproperty.co.za/roller/news/entry/the_mortgages_rules_for_building

“Building for oneself,” said Lawrence, “at the moment is almost always more expensive than buying a second hand home of the same size – but it has the huge benefit that the client gets exactly the home that he wants, designed and finished to meet his needs.”

Most of those going this independent route, said Lawrence, do rely on bank finance – and banks are still prepared to advance up to 80% bonds for this type of enterprise, provided that the loan applicant qualifies and goes about his request in the approved way.

This, he said, involves, either buying a plot , designing and building a house or buying into a so called ‘plot and plan’ system where the house is pre-designed as part of the development.

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Banks declare fall in repossessed houses
http://www.fin24.com/PersonalFinance/Property/Banks-declare-fall-in-repossessed-houses-20100718

The number of houses that banks have had to repossess owing to mortgage defaults has declined, but there seems to be no pattern regarding price categories of most of the repossessed houses, South Africa’s largest banks say. 

At Nedbank the average price of houses taken back is between R350 000 and R400 000, with very few exceeding R1m while at First National Bank (FNB) most of the repossessed houses fall in the price range R800 000 to R900 000. Dwellings on which large mortgages have been granted are a problem at Absa, the country’s largest retail bank says. Nedbank currently has 1 800 repossessed homes, but these comprise less than 1% of its total home loan book. 

At Absa, the number of repossessed houses represents less than 0.01% of all home loans. Standard Bank declined to comment. The banks ascribe the decline in the number of repossessed houses to their efforts to help homeowners to either keep their houses or sell them.

(via Instapaper)

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