About Me

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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
Please visit our website at www.prop-law.co.za for more details.
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

03 February 2014

Bond repayments set to keep rising

The table in the article below gives an interesting perspective to the exact practical impact that the rather theoretical 50 basis points will have for property owners.

Gareth Shepperson
Commercial and Property Attorney

Bond repayments set to keep rising

Property owners will have to brace themselves for higher monthly mortgage bond repayments, with analysts forecasting that Wednesday's decision by the Reserve Bank to increase the repo rate by 50 basis points could be the first of several rate hikes this year.

The major banks have increased their prime home loan rates by 0.5 percentage points to 9 percent. This will result in monthly repayments on 20-year mortgages rising by R96 a month on a R300 000 loan, R160 on a R500 000 loan, R319 on a R1 million loan and R638 on a R2m loan.

Ian Watson, the chief executive of debt counselling company DebtBusters, expected the rate hike to result in a 'large spike in defaults on the banks' home loan books in the months ahead'.

Over-indebted consumers were already faced with price hikes in electricity, rates and petrol but many of them were also overloaded with unsecured debt, which might be the final straw for many of them, Watson added.

John Loos, a household and property sector analyst at FNB, dismissed this alarmist view, stressing it was difficult to see a 0.5 percentage point increase in home loan rates having such a big impact.

Jacques du Toit, a property analyst at Absa Home Loans, said that the rates hike would not have a major impact on the home loan books of banks and only a moderate impact on the consumer and broader economy. However, Du Toit said there was a risk of further rate hikes.

Business Report

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