Gross Domestic Product for the 2nd Quarter of 2016 showed some mild improvement, returning to positive growth after a 1st Quarter contraction.

In recent months, the FNB Valuers’ Residential Market Strength Index (MSI – see page 2 for description) has been through a short bout of mild demand-driven strengthening. However, month-on-month demand growth started to slow once more in August, which possibly means a near term weakening coming in the MSI.

The July Consumer Price Index (CPI) year-on-year inflation rate slowed from a previous month’s 6.3% to 6.0%, thus sitting virtually in the 6% upper limit of the SARB’s (Reserve Bank) 3-6% inflation target range.

June Retail Building Statistics complete the 2nd quarter building picture, and pointed to a still-brisk pace of Retail Space building activity for the 2nd quarter as a whole.

Tuesday, 16 August 2016 12:26

How common are 100% home loans?

A question often asked is to what extent mortgage lenders still provide “100% loans”, meaning mortgage loans that amount to 100% of the value of the home being purchased.

Some may perceive the Commercial Property Sector not to have “boomed” to the extent of the Residential Sector over the past 2 decades, with the Residential Market having experienced an extreme price growth boom prior to 2008.

According to John Loos, a mild slowdown for the Consumer and Retail Property sector is projected based on an FNB macroeconomic scenario where recession is avoided, inflation is moderate, and interest rates have just about peaked.

Retail sales growth remains solid in real terms, having averaged 3.3% for the 1st 5 months of 2016, similar to the average growth for 2015 as a whole.

The FNB Estate Agent Survey has begun to record a mild weakening in agent perceptions of home maintenance and upgrades, following a broad improving trend through 2013 to late-2015.

While the South African residential property market is showing signs of strain, prices in the Western Cape just keep going up.

Page 5 of 11

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