The committee is widely expected to raise rates to 6.75%, which would in turn raise the prime lending rate to 10.25%.
The
Bank’s latest data show that mortgage advances to the private sector
rose 0.8% in November, compared to 3.81% during the same month in 2014.
"We could conceivably get to slowing demand (in home purchases)," said First National Bank property strategist John Loos.
"This,
I believe, will ultimately lead to slowing house price growth, at least
to rates below CPI inflation, which would mean declining real house
prices."
However, fewer house purchases — and the fewer mortgage
applications that go with this — are not expected to encourage lenders
to offer "prime minus" loans to attract consumers and stoke demand.
"Lenders’ costs of funding (and) capital requirements these days
probably don’t allow for such lending on a larger scale.
"The
average differential above prime rate has come down somewhat over the
past two years, according to Ooba statistics, but I’m not sure it will
easily get back to prime minus," Mr Loos said.
Mortgage originator Ooba found lenders charged the current prime rate of 9.75% plus 0.24% on average last November.
SA
Home Loans CEO Kevin Penwarden said the firm had seen clients who sold
their properties mid-mortgage, irrespective of whether their accounts
were in arrears, indicating changes in their financial circumstances.
"It’s
difficult to answer the question on whether clients are selling their
properties below their property value — a forced sale scenario," said Mr
Penwarden. "It is true that in some cases the purchase offers that some
of our clients receive are below the market value that our valuers
determined the last time they visited the property.
"But that does
not necessarily mean the sale is below the intrinsic market value at
the time of sale. The sale price achieved is sometimes even less than
the amount owed to SA Home Loans. Again, this does not necessarily mean
the sale is below market value. In such instances, we do try to enter
into an agreement with the client for the repayment of the shortfall."
Standard Bank said it had not observed these trends.
Nedbank
said clients who could not afford instalments had avoided sales in
execution by using its assisted sales programme. More than 6,000 Nedbank
customers had benefited from this.
"From experience, between 20%
and 30% of market value is usually saved by choosing this option. In
addition, we also ‘forgive’ a portion of the shortfall or residual
balance after the sale," said Nedbank Retail Home Loans’ Thozama
Mochadibane.
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