Latest Housing Review by Absa Bank

ABSA housing market

Many consumers, according to the latest Absa Housing Review, continued to experience financial pressure in the first quarter of 2014. With a slow-down in disposable income and spending by clients, this is a direct result of restrained employment growth as well as a rise in inflation.

Savings per household is not on the up-and-up plus credit-active consumers with credit-impairment still remains on an all-time high.

Consumer confidence is still low, and has been since 2013 with many patrons still being rather pessimistic about the economy as a general rule of thumb and how this is impacting on their finances in general as well as how it will impact on their spending.

Real year-on-year prices in the housing market were marginally lower in the first quarter of 2014 than that of the last quarter of 2013; these figures are taken from the affordable housing market as well as figures from more luxury homes.

Housing market prices are driven by property market conditions and factors directly related to these; these include macroeconomic conditions, the state of household finances as well as a general feeling of pessimism amongst consumers.

Based directly on current trends in the housing market, continued single-digit  as well as insignificant house price growth is forecast for the year 2014 as well as 2015.

3 main factors that can be expected to impact strongly on the housing market in 2014 and 2015:

  • Nominal price trends
  • Inflation
  • Real price deflation

What to expect from the property market in 2014 and 2015:

The aspects of economic growth, employment, household running costs and living costs as a whole as well as interest rates, consumers’ credit risk profiles, banks’ risk appetite in addition to lending criteria as well as consumer confidence will impact largely on the housing market.

All these factors as well as others, will impact heavily on the housing lending criteria additionally the prices of properties sold, and these will have the final say as far as supply and demand is concerned in the property market. Furthermore, price trends, market activity, patterns of buying properties, transaction volumes, and at the end o the day, finance for mortgages will all have a say in property trends.

At the end of the day, everyone has to have somewhere to live, and if you are looking for a home whether in the down- or up-turn in the housing market, chances are you will find a way and means to secure a home loan for that much-desired property.