JOHANNESBURG - South African house prices have fallen despite an increase in demand as shown by a rise in home loan applications after the government eased lockdown regulations relating to Covid-19, a industry player said.
MultiNET Home Loans, which represents over 50 percent of all home loans in the South African market, said it had seen an "unprecedented" increase in loan submissions after the lockdown was scaled down from the initial 'level 5' stringent restrictions which had grounded most business activity except for essential services.
The company said submissions were up 36.57 percent in June compared with the same period in 2019, while home prices had declined by 12 percent so far, taking inflation predictions into account.
“Whilst the market looks to be recovering sooner than expected, it is important for home owners looking to sell their properties to get the best advice possible on what they can expect during these times when it comes to property prices," MultiNET Home Loans chief executive officer Shaun Rademeyer said.
Graphic: Supplied by MultiNET Home Loans
Residential mortgage books for South African banks were poised to perform better than expected, the company said.
Falling house prices, combined with a low interest rate, had created one of the best times for those consumers not impacted by the pandemic to enter the housing market in over 50 years.
MultiNET Home Loans said the price drop was an indication that many consumers had either been forced to scale down on investment properties or needed to sell their homes due to reduced income as a result of the coronavirus pandemic.
President Cyril Ramaphosa warned on Monday that South Africa's economy was set for a tough period ahead in the fallout from the global health crisis, saying predictions of businesses shutting down and people losing their jobs were now materialising.
Graphic: Supplied by MultiNET Home Loans
- African News Agency (ANA)