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Good news – banks are granting more bonds

Good News – Banks Are Granting More Bonds

Good news, banks are granting more bonds.  With housing across the country in huge demand, the property market is gaining momentum again and this time from the banks that are stimulating the growth of market share again.  In fact, the momentum has seen steady growth for 2019 and until recently, the 3rd quarter of 2019 has seen the number of applications grow to the highest levels in more than 3 years.

Good news.  The SA property market showing signs of growth?

According to P24, there is good news and here are the green shoots we are starting to see.

  • 3% of bonds granted represent the first time buyers group.
  • Generally, all new bonds, granted are up by 19.2% across all categories and price bands.
  • There has been a 6.3% increase in the bonds granted on properties priced between R1m – R1.5m.
  • The biggest percentage growth (44%) came from properties priced between R500,000 and R1m.
  • The size of deposits as a percentage of the purchase price has actually declined. Banks are more willing to grant loans at more favourable interest rates.

More good news: take-home pay seems to be increasing

  • In a recent study that tracks trends in SA salaries across 3 million employees, the average take-home pay amount has actually shown a year-on-year increase every month since the start of 2018.
  • And, these increases have often exceeded the rate of inflation.
  • In July 2019 for example, the average take-home pay was R15,630, which was 5.3% up on July the previous year, compared to the year-on-year increase in inflation of 4%.

But, property prices are 0nly growing by 2.24% annually

  • Sadly, according to P24, house prices are growing at a much slower rate than inflation.
  • House prices in the last 12 months were only 2.24% higher on average than the previous 12 months.

Banks are granting more bonds

  • Competition is always good for business and more specifically the consumer. In this case, the increased competition from banks for growth in market share has a positive impact on potential buyers of properties.
  • The deposits that banks now require before a bond is granted is lower allowing more families to enter the housing market. This stimulus also drives the growth of the market overall.
  • More favourable interest rates offer potential homeowners more favourable interest rates. This really is great news for first time home buyers.  More favourable interest rates can add up to annual savings of almost R4,000 annually and R80,000 over the 20-year life of a loan.

If you re you selling property, then remember…

  • That your asking price is critical to the sale of your home. If you consider your property valuation carefully and you set a market-related asking price, your property will sell.  Evidenced above, property prices have on average only grown 2.24% over the last 12 months.
  • Partner with good estate agents.  Consider a sole mandate for 3 months at least.
  • If you are selling your home, you have a bit of work ahead of you. Make sure that your home looks absolutely fantastic.  Clean up, de-clutter, pack stuff away and even go on a little shopping spree to spruce up the décor in your home.  Complete your tasks before the photographer arrives. Be sure to read our articles about home staging (general benefits, kitchen, bathrooms, master bedrooms, TV room and doing up a home office).
  • Benefit from the more bonds being granted and make certain your asking price is correct.

Connect with the leading real estate brands in your area

If you are selling your home and wondering who to get to sell your home, we are here to help.  Submit your details online and:

We are starting to get some long-overdue good news.  We are also more confident than ever that EA Connections will be able to help you get in touch with top real estate brands and their agents.  Remember our only focus here is to help you sell your home quickly and for the best possible price.  Click here to submit your details online to ensure 3 top agents will call you.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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