Shaun Rademeyer, CEO of BetterLife Home Loans, says that the next six months are going to be a critical time for first-time property buyers.<\/p>\n
Rademeyer said that the best time to buy is usually when everyone else is selling or sitting on the fence, and the rate of price growth is very low or non-existent.<\/p>\n
“Our statistics show that the rate of price growth is definitely slowing currently, especially in the first-time sector of the market.”<\/p>\n
Data from the\u00a0bond originator showed that at the end of April, the year-on-year growth rate in first-time buyer prices was 4.38%, compared with a year-on-year growth rate of 4.84% at the end of March \u2013 and 5.06% at the end of April 2016.<\/p>\n
In the overall market, the year-on-year rate of price growth was 5.02% at the end of April, compared to 5.41% at the end of March, and 6.97% at the end of April 2016.<\/p>\n
“At the moment, the affordability of homes is improving,” Rademeyer said. But to take advantage of these developments, buyers are going to need access to home loans, \u201cand we anticipate that it is going to become significantly harder to obtain such loans after the end of this year.<\/p>\n
“The banks will naturally become increasingly cautious about extending any kind of credit as the effects of the ratings downgrade become more evident, and in fact are already starting to apply stricter loan qualification criteria,” Rademeyer said.<\/p>\n
\u201cOur statistics show that in the 12 months to the end of April, lenders turned down an average of 65.5% of all loan applications submitted,”<\/strong> the property expert said.<\/p>\n He said that there is still a very healthy demand for first-time home ownership, with the percentage of home loan applications coming from first time buyers having increased by 2% year-on-year at the end of April to 47.25%, and first-time buyers still accounting for 36% of all formally granted home loans.<\/p>\n Local data published this week however, gives the market cause for slight optimism.<\/p>\n Annual consumer price inflation was 5.3% in April 2017, down from 6.1% in March 2017, Stats SA announced on Wednesday – better than market expectations, and boosting hopes for rate cut in 2017.<\/p>\n The South African Reserve Bank, is due to announce its latest interest rates decision on Thursday.<\/p>\n Economists polled by Reuters expect the repo rate to remain unchanged at 7% in May, however a cut later in the year is being priced in.<\/p>\n
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