FNB’s October ‘Housing Barometer’ has painted a gloomy picture for SA’s housing prices, but the Cape Town Metro continues to buck the trend. A year ago, the Western Cape was well ahead of the rest of S.A. with an average growth in house prices of 11.3%, but the average has since dropped to 4.3% for the province. This is made up of a growth of a mere 0.7% for the non-metro areas, offset by a whopping (relatively speaking) 8.4% growth for the Cape Town metropolitan area (City of Cape Town). If we compare the major metro areas in the country, then we see that Ethekweni managed negative growth of -0.3%, Tshwane did +0.6%, Ekurhuleni was +2.5% and City of Jhb achieved +3.2%. Cape Town blew them all away with its +8.4% growth.
Looking back over the past 5 years, the Western Cape house prices showed an average increase of 50.6%, compared to it’s nearest rival, KZN, which only managed 20.9%, while the other provinces trailed behind.
These stats must make existing property owners very happy indeed, but the high prices are putting pressure on buyer affordability. Banks continue to follow strict bond approval guidelines which revolve around affordability and equity, and with bouyant prices, buyers are becoming more hard pressed to get approvals. Self employed buyers and salaried employees who already battle to satisfy bank approval criteria are finding things even tougher as prices continue to soar.
At Silent Partners, we continue to enjoy record mortgage bond application approval ratios, with our 2017 rate of 100% approval of applications submitted still intact up to October. Our experience as bankers gives us the edge in tipping the scales on those applications which are just falling short of an approval, and our results stand as proof of this. Be sure to contact Silent Partners (www.silentpartners.co.za) if you are going to be looking for bond finance. Let us get you pre-approved, and assist you in preparing the best possible loan application. We will get the best deal for you.
(Source of statistics: John Loos. Household and Property Sector Strategist, First National Bank.)