House prices have finally started to stabilise and even though the prediction is that they will rise in later 2011, homeownership has become more within reach of the average family.
The banks price indexing shows that while the smaller homes have increased in value / purchase price, the larger homes (closer to the million price range) have decreased in value. The average house price purchase in November (according to First National Bank) was around R780,000.
The National Credit Regulators released a report that showed that over all the national debt rates have improved. They state that 53.7% of credit active consumers are doing well and paying their bills on time. This % has improved since their last quarter report.
In this quarter report the National Credit Regulators reports an improvement of around 97,000 consumers who were previously not paying their bills and are now settled and improving their credit records.
With this type of information coming from the National Credit Regulators and coupled with the information from the banks regarding home prices, people who do have money to spare are once again looking to purchase. The current property markets has a mass of available houses and it is what you would call a “buyers market” with plenty of options aiding negotiation.
According to reports the level of affordability is matched to what it was in 2004, yet we are not seeing the same levels of purchase.
The reasons being are that those households with the income that might allow or qualify for purchasing have already extended their debt loads are currently bringing down their general debt before they are in a position to make use of their total income to purchase property. The income to expense ratio is very different compared to those in 2004.
A high number of job-losses in the past two years also means that there are less income earners who can afford to invest in property.
