Sold! An estate agent congratulates a couple on their home purchase. Picture: Kindel Media/Pexels
Although the interest rate has been at a 10 year high of 11.75% for two years, there are indicators that the real estate market is starting to recover.
This is according to the most recent BetterBond Property Brief for April 2024, which shows a 7.8% increase in bond applications over the first three months of the year despite the highest interest rates levels since 2014.
House prices have also recovered, with year-on-year inflation rates for first-time and repeat buyers hitting their highest levels since the SA Reserve Bank began raising interest rates at the end of 2021.
In the first quarter of 2024, the average home price for all buyers increased by 7.2%, outpacing inflation.
“It was also the second successive quarter that average home prices have increased in real terms – suggesting that a more robust growth phase is around the corner. All that is required for this to happen is a relaxation of monetary policy, which may occur in May,” said research economist Dr Roelof Botha.
He went on to say that during the year to March 2024, average property prices in three regions managed to beat the consumer price index (CPI), with the Eastern Cape shining as the stand-out region with a year on year growth rate of 9.6%.
A further sign that the recent market slump is coming to an end is an increase in bond values in four of nine regions.
According to the Property Brief, the Western Cape had the highest average home loan for first-time purchasers, at R1.32 million, which was 83% higher than the Eastern Cape’s average home loan of R719,000.
Only the Free State, Northern Cape, Eastern Cape, and North West have typical home loan values of less than R1 million for first-time purchasers.
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