Despite enduring a 10-year high interest rate of 11.75% for the past two years, indications emerge of a revitalized real estate sector, as revealed by the latest insights from the BetterBond Property Brief for April 2024.
The report highlights a notable 7.8% surge in bond applications during the initial three months of the year, defying the backdrop of the highest interest rates since 2014.
Moreover, housing prices display signs of recovery, with year-on-year inflation rates for both first-time and repeat buyers soaring to their zenith since the SA Reserve Bank's interest rate hikes commenced in late 2021.
In the opening quarter of 2024, the average home price for all categories of buyers witnessed a commendable 7.2% escalation, outpacing inflation figures.
Dr. Roelof Botha, a research economist, commented, "It was also the second consecutive quarter witnessing a surge in average home prices in real terms, hinting at an impending robust growth phase. A relaxation of monetary policy, potentially in May, could catalyze this momentum."
During the period up to March 2024, average property prices in three regions surpassed the consumer price index (CPI), with the Eastern Cape emerging as a beacon of growth, boasting a remarkable year-on-year growth rate of 9.6%.
Further underscoring the upturn, bond values surged in four out of nine regions, signaling a thaw in the recent market downturn.
According to the Property Brief, the Western Cape led with the highest average home loan for first-time buyers, standing at R1.32 million, marking an 83% contrast to the Eastern Cape's average home loan of R719,000. Notably, only the Free State, Northern Cape, Eastern Cape, and North West recorded typical home loan values below R1 million for first-time purchasers.
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