Standard Bank says the residential property market has been dampended by high interest rates, but a shift is expected for September.
The South African residential property market has faced significant challenges over the last two years, but lower interest rates should boost it.
“However, amidst this challenging climate, our Standard Bank house view offers a glimmer of optimism – we anticipate that the projected rate will lead to a more robust recovery.” The group’s home loan registrations significantly exceeded the pre-pandemic level since the second half of 2020. The shift resulted in a massive drop in home loan applications since last year, with the market registering an average of R14 billion in home loans a month in 2023, continuing into 2024 with further muted levels.“Despite this downturn, Standard Bank maintains a cautiously optimistic economic outlook. Our modest 1% growth in the lending book for the first half of 2024 was in no way indicative of a shift in our risk appetite,” said Standard Bank.
Standard Bank is not alone in this expectation. Many economists now expect the first cut in September after two of the six members of the SARB’s Monetary Policy Committee voted to cut rates by 25 basis points in July.Inflation also dropped from 5.1% in June to 4.6% in July – only a percentage point above the SARB’s target midpoint of 4.5%, giving the SARB scope to cut rates.
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