More 1st-time home buyers as expectations of rate cuts grow - Standard Bank

There's been a resurgence in first-time buyer activity in South Africa's property market, reports Standard Bank SA.

This is potentially driven by expectations of imminent interest rate cuts, says Toni Anderson, head of Home Services.

In May, nearly half of the home loans registered by the bank were for first-timers, with Gauteng, Western Cape and KwaZulu-Natal showing the most activity in this bracket.

A Standard Bank survey shows that the average loan value approved for first-time buyers in the past three years came in at just under R1 million.

40% of these buyers could afford to pay a deposit, says Kabelo Makeke (Head of Personal and Private Banking) on The Money Show.

"We continue to offer 100% loans, in fact we give them 108% subject to risk assessment...

"...but the amazing trend is that even some first-time home buyers are people who can actually fford to take out the deposit. We've seen an average of about 24% deposits (of the selling price) that are coming through from about 40% of them."

Kabelo Makeke, Head: Personal & Private Banking - Standard Bank SA

Standard believes we're at the peak of the rate cycle and a coming downward trend opens up affordability for customers.

He cites factors like stabilisation of electricity supply and green shoots in terms of the normalisation of the inflation rate as positive drivers.

"We're focusing on two cuts at a maximum of 50 basis points for this year, in the second half."

"I still believe there is optimism in the economy, especially post-elections, that also gave us an indication of where we're going."

Kabelo Makeke, Head: Personal & Private Banking - Standard Bank SA

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