Mortgage finance in South Africa slows to a crawl

SHOOT: The headline in fin24 is a mixed up one. 'Mortgage advances slow further'. It should be no surprise that mortgages [house buying] will first dry up, and then reverse. In this article Jacques du Toit, senior property analyst at Absa's home loan division says he doesn't expect those numbers to turn negative. Ja, that wouldn't be very good for ABSA. Unfortunately Jacques is incorrect on this one. The trends in the US are soon to haunt our shores. As the number of unemployed swell, we'll see more and more selling their homes and renting. That's not going to change for some time. Years.

FIN24.com: He said the poor employment figures seriously harm households' confidence levels and they don't see their way to spending much at this point.

Householders remain under financial pressure owing to high indebtedness, despite the interest-rate cuts amounting to 4.5% points since December 2008.

Although he does not expect the figure to turn negative on an annual basis, it will still trend towards lower levels in the second half of this year.

clipped from www.fin24.com Johannesburg - Annual growth in total mortgage advances (the net outstanding balance of residential and commercial mortgage loans) has slowed to a snail's pace. New data from the Reserve Bank indicate that growth in the value of total mortgage loans in June slowed to an annualised 8.2%, from an annualised 9.4% in May. "This was the slowest annual growth since the 8.4% in July 2000," said Jacques du Toit, senior property analyst at Absa's home loan division. Month on month growth was an insipid 0.1%. He attributes this to a weaker demand for mortgage finance.