Interest rate hikes put strain on SA home owners

SA home owner's lose properties due to rate hikes

Home owners in South African are coming under increasing strain following several interest rate hikes in recent months. Analysts say some home owners cannot cope with bond re-payments and are ultimately losing their properties.

Meanwhile in Polokwane, the number of houses going on auction is increasing.

"Two years ago there was nothing. There wasn't really any auction for property but now at this stage the sheriff is sitting with more than 60 on the books. There's definitely a hike in the liquidation that's taking place now," says Johan Bezuidenhout of Bynes Asset Auctioneers.

The high interest rates, coupled with soaring fuel and food prices are adding to the pressure on consumers. Sizwe Nxedlana, a Standard Bank economist, says there has been a 4.5% of 450 basis points increase in interest rates which means that mortgage installments have probably increased by 35%.

"People don't only have debts on mortgages, but on vehicles and credit cards which also means that these are up by 35% as well. If you couple that to the higher interest rate which erodes peoples disposable income you would expect that people would start to come under some sort of strain," Nxedlana said.