This article is courtesy of RealEstateWeb ("Ouch! More bad mortgage figures point to scary property scenario” – 29 October 2008)
FNB released its figures for outstanding mortgages for September and warned that things are not looking good. According to them we should not expect the residential property market to recover before 2010 and that commercial property is doing even worse.
A graph showing mortgage growth declining steadily since 2006 – around the time when interest rates started rising - highlighted the weakening trend in the residential sector. John Loos also pointed out that year-on-year growth decline from 17,6% in August to 16,6% in September, and the bank believes that this is just a start; figures can drop to 0% which suggest that the tough times are far from over.
Demand for residential property is expected to pick up towards mid-2009, Loos said, but this is only expected to be seen in the outstanding mortgage numbers in 2010.
Loos also said that commercial mortgages have been declining since a peak in the late-2006. This means that this sector has been negatively affected by the rising interest rates and the deteriorating economic prospects.
FNB warned that numbers will continue to decline because the outstanding mortgages has yet to fully reflect the sharp decline in new mortgage loans granted, especially residential property.
§ Good news is that the website, PropertyOverseas, has suggested to it’s users that property in South Africa is an “attractive proposition” with the Rand giving them good value for money.
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