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Homeowners urged to budget carefully over Soccer World Cup

Homeowners urged to budget carefully over Soccer World Cup



As thousands of patriotic South Africans queued for hours to secure
newly-released tickets to the Soccer World Cup, RE/MAX of Southern Africa
chairman Peter Gilmour cautioned of a "Christmas in July" knock-on effect.



"People are spending money on tickets that they might usually put towards
paying their living expenses, such as their bonds," Gilmour said. "Even if
it's only a few hundred rand, we are seeing an increase in retail spend and
retail debt.



Gilmour warned that come July, banks could possibly see more homeowners
defaulting on their bond repayments. "With the six-week long holiday parents
will have to pay more for childcare and entertainment. Add high unemployment
rates and increasing utility bills to this and you have an environment where
homeowners are under severe mortgage stress," he said.



The Soccer extravaganza's impact on the real estate market would continue
long after the final whistle. "There is a lot of stock coming onto the
market right now with sellers hoping for a lucky hit. The problem is that
with the United States and Europe still in recession, investors are cautious
with regard to offshore investments," Gilmour said.



RE/MAX sales figures for the year ending in April had showed an increase of
45% over the previous year. "Some branches in Gauteng improved 90% over the
same period."



According to figures from bond originator Betterbond, only 45% of homeloans
are currently being granted, compared to 85% in 2006.


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