Banking group FNB says the rising cost of living and high interest rates are forcing consumers to consider alternative ways of buying homes.FNB said that it has seen this type of homebuying setup increase by 36% on its loan books in the six months ending 31 December 2023 .
This demographic have been hit hard by the tough economic environment in South Africa, he said, and are looking for affordable housing. Due to the rising cost of living and persistently high interest rates, they have to “cope” together. “Interestingly, while collective buying is popular in the affordable housing market, there is also a lot of uptake from affluent customers and families buying holiday houses and financing semigration homes,” he said.South Africa’s interest rates have been stuck at a 15-year high for almost a full year, with the repo rate hitting 8.25% in May 2023.
The main drive behind rates remaining higher for longer is sticky inflation – which has not yet been able to sustain at the South African Reserve Bank’s target point of 4.5% – as well as a more hawkish viewpoint from major international central banks, particularly the US Fed.