Not only is there a renewed demand for properties, but the rate of demand for large houses, as opposed to smaller houses in the cities, has increased as well.
As a result, property prices have increased by 1.4% up to July, according to FNB data, when they were initially predicted to fall by 5% and 14.5%.
Another positive development that has contributed to resurgent demand are the interest rate cuts that kicked off the first half of 2020.
In response to the coronavirus, and the damage it was expected to have on the economy, the South African Reserve Bank (SARB) cut the rate by a further 1% on 14 April 2020, after already having cut it by the same amount earlier in March. It was then cut again by 0,5% in May and it was further cut by 0.5% in July. This means five rate cuts within the space of seven months, taking the prime rate to 7%, the lowest level in over 50 years.
So on a bond of, say, R1 000 000, the repayment amount will have dropped from R9 650 at the beginning of January to R7 753 after the rate cut in July 2020.
The lower mortgage rates have naturally created an environment for property investment, with prospective home buyers looking to seize the opportunity before mortgage rates rise again.