KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES
Category Investments

Mortgage advances growth at record high in March

05 May 2006 Jacques du Toit Senior Economist

According to data released by the South Africa Reserve Bank, mortgage advances by the monetary sector increased by 30% year-on-year in March 2006, up on the increase of 29,5% recorded in February this year. The March growth figure was the highest since 1965, and brought the total amount of mortgage advances to R560 billion.

As expected, the impact of lower transfer duty on property became visible during March. Activity in the property market dropped significantly in the second half of February after the Budget announcement on 15 February of a major cut in transfer duty, to be effective from 1 March 2006. As from this date, no transfer duty is payable on a property with a value of
up to R500 000 (see table below). As a result of these adjustments, transfer duty on a property of, for instance, R770 000 (the average price of a house in the middle segment of the market in April 2006 in respect of which loan applications were approved by Absa), will amount to R13 500, which is 68% lower than the amount of R42 200 that was payable before 1 March. This comes to a saving of R28 700 in transfer duty. Against this background, many property transactions were probably temporarily delayed in the last two weeks of February, especially on the part of buyers, in an attempt to benefit from the lower transfer duty applicable from 1 March this year.

Against this background, both the year-on-year and month-on-month growth in mortgage advances may still be affected over the short term by the effect of the lower transfer duty on property. The expectation is that this factor will support activity in the property market in the next few months. In view of these developments, mortgage advances growth of at least 25% can be expected for 2006 as a whole, compared with 27,6% recorded in 2005.

This article was originally published in : ABSA Property Trends

Disclaimer:
The information in this publication is derived from sources which are regarded as accurate and reliable, is of a general nature only, does not constitute advice and may not be applicable to all circumstances. Detailed advice should be obtained in individual cases. No responsibility for any error, omission or loss sustained by any person acting or refraining from acting as a result of this publication is accepted by Absa Group Limited and/or the authors of the material.

Quick Polls

QUESTION

Do you believe this is the toughest period for financial advice in many years?

ANSWER

Yes, it’s hard to navigate the challenges and difficult to adapt. I’m struggling.
No, I have managed to navigate the challenges and have adapted. I’m good.
50/50. I just feel like whether we like it or not, we have to ready ourselves for change… be resilient and scale for the future. It’s not about survival of the fittest anymore but survival of the quickest. We just have to move on with life.
fanews magazine
FAnews October 2021 Get the latest issue of FAnews

This month's headlines

IFA nuggets: Prospecting for clients
FSCA weighs in as universal life policy premiums rocket
No short cuts for the short term broker
Investment lessons worth sharing
Tightening of policy wordings… likely in the future?
Subscribe now