The recent ruling by the Supreme Court of Appeal where the body corporate of Gardens Lodge in Cape Town was found to have charged a “patently exorbitant” interest rate on levies that were outstanding.

The Residential Mortgage Market is weak in terms of transaction growth, but solid in terms of debt repayment performance under weak economic circumstances.  

Perhaps one contributing factors to the formation of residential property “bubbles” or “overshoots” across the world over the years is the lengthy leads and lags between the start of a “negative” economic event, such as an interest rate hiking cycle, and the start of a rising trend in bad debt levels.

John Loos, Household and Property Sector Strategist at FNB observes 'a tougher year for residendial mortgage lending ahead, as the residential property market slowly moves into its super-cycle “Correction”.'

The half point increase in the repo rate announced by the Reserve Bank on Wednesday (29 January 2014) certainly sent a shock wave through markets.

With many consumers drowning in debt, the National Credit Regulator has called on consumers to monitor their budgets closely over the festive period.