The worst is probably over for loans in South Africa: Nedbank
BusinessTech:
Credit demand in South Africa weakened further in July, with private sector credit extension (PSCE) growth dropping to 3.5%. Despite the current slowdown, Nedbank forecasts improvement as lower inflation, interest rate cuts, and the introduction of the two-pot system boost disposable income and consumer confidence, expecting credit growth recovery by August.
Durban woman reclaims home after bank illegally sold it at auction
Moneyweb:
The Durban High Court ruled that SA Home Loans unlawfully sold and transferred Valerie Naidoo’s home, overturning the 2021 auction where her R800,000 house was sold for R100,000. The court reinstated her title deed, criticized the bank’s conduct, and ordered SAHL to reimburse the buyer’s legal and transfer costs.
Good news for South African homeowners
Daily Investor:
South Africa’s property market is set to improve due to anticipated interest rate cuts and increased bank lending. Standard Bank and Capitec foresee renewed growth as inflation eases, boosting consumer confidence and loan demand. Despite recent challenges, long-term trends suggest resilience and potential recovery in the residential property sector.
FNB property barometer for August 2024
FNB:
Global inflation is easing, allowing central banks to halt rate hikes. In South Africa, interest rates have peaked, with cuts likely in late 2024, though risks persist. Global house prices are moderating due to inflation and debt costs, while in South Africa, house price growth slowed, with mortgage volumes and bond amounts declining.
Good news for South African interest rate cuts next month
Daily Investor:
The Federal Reserve’s signal to cut interest rates in September may prompt the South African Reserve Bank to ease its monetary policy by late 2024. Lower US rates can positively impact South African markets, encouraging the Reserve Bank to lower its rates, which could relieve indebted households and businesses.
Good news for inflation and interest rates
Daily Investor:
South Africa’s inflation rate slowed to 5.1% in June 2024, a six-month low, potentially prompting the central bank to consider interest rate cuts. The Reserve Bank’s policy committee left rates at 8.25%, with a split vote indicating a possible shift towards easing later this year. Key contributors included slower rises in food and transport costs.
Interest rate cuts anticipation spurs first-time home buyer resurgence: Standard Bank
Property Review:
Despite high interest rates, Standard Bank reports a resurgence in first-time homebuyer activity in South Africa, driven by anticipated rate cuts. In May 2024, 50% of Standard Bank’s home loans were to first-time buyers. The average loan approved was R975,000, with Gauteng, Western Cape, and KwaZulu-Natal leading in activity.
Big interest rate changes expected next year
Daily Investor:
South Africa’s benchmark interest rate, JIBAR, will be replaced by ZARONIA in 2025, promising more accurate and transparent interest rate calculations. ZARONIA, based on actual overnight transactions, will enhance market stability and integrity. Financial institutions must prepare for this shift by updating systems, valuation models, and renegotiating existing contracts.
Standard Bank keeping the taps closed
Daily Investor:
Standard Bank is tightening lending due to rising credit impairments, as clients struggle with elevated interest rates and living costs. While higher rates initially boosted revenue, prolonged high rates have increased defaults. The bank anticipates a year-end credit loss ratio around 100 basis points and continues to limit loan growth.
Interest rate relief may come sooner than expected
Daily Investor:
Traders anticipate South Africa’s first interest-rate cut in four years in September, following potential ANC-DA alliance talks after inconclusive elections. This expected political stability, alongside improving US economic indicators, has bolstered the rand. The South African Reserve Bank may lower rates as inflation nears the 4.5% target midpoint.