Staff Writer
The latest Property Brief showcases some good news for a property market that’s been under strain for the last few months.
Here are some of the highlights:
- The Rand/Dollar exchange rate strengthened by 11% in June and July
- The BetterBond share of Deeds Office registrations increased by 9% since Q3 of 2023
- The Producer Price Index (PPI) dropped off its peak of 18% in July 2022, to only 4.8% in June 2023
Economist Dr Roelof Botha shares his analysis of the economy, and predicts a welcome rise in disposable income:
“July 2023 marked the first time since Nov 2021 that the Reserve Bank did not raise its benchmark repo rate, which was good news for aspirant homebuyers and existing homeowners.
There was even better news with a further sharp decline in the Producer Price Index (PPI), which feeds into the Consumer Price Index (CPI) and acts as a leading indicator of future consumer inflation.
The Reserve Bank Monetary Policy Committee seems to have underestimated the extent and speed at which the PPI dropped off its peak of 18% in July 2022, to only 4.8% in June 2023, which will almost certainly continue to send the CPI lower in coming months.
The fairly spectacular recent performance of the South African currency represents one of the main reasons for impetus to the trend of declining inflation. Since June, no currency of note in the world has been able to match the sterling performance of the rand, which hit a double-digit strengthening against the US dollar between 1 June and 31 July 2023.”
Further rise in household disposable income
In July, there was more good news from one of the key indicators in the Altron-FinTech Household Resilience Index (AFHRI). Although its reading for the Q1 2023 predictably took a slight dip as a result of financial pressures faced by South African households, it also contains some exceptionally good news on the continued resilience of several key indicators.
One of the shining stars in the ensemble of 20 indicators comprising the AFHRI, is the new all-time record for total household disposable income, which also serves as one explanation for South Africa’s ability to avert a recession in Q1 2023. This key economic indicator is on course to hit the R1.1 trillion quarterly level before the end of 2023.
