If South Africa’s bond affordability challenge is not corrected, it can lead to inflationary pressures as the cost of living increases.
This can further strain household budgets and reduce economic stability, says Nondumiso Ncapai, the managing executive at Absa Home Loans.
In response to this publication’s enquiry, she says this will lead to lower consumer spending, affecting businesses and overall economic activity.
“Consumers may struggle to meet their bond repayments, leading to higher default rates. This can negatively impact banks and financial institutions, leading to tighter lending criteria and reduced credit expansion in the private and household sectors,” Ncapai said.
Affordability
Earlier this year, the Department of Human Settlements said the local sector contended with challenges with the housing accessibility opportunities for the gap market.
It said the gap market pressures are felt more strongly in metropolitan municipalities, intermediate cities, and small towns. DHS said all stakeholders in the value chain must find long-lasting solutions to this challenge since the gap market challenges drive the proliferation of informal settlements.
The Department of Public Service and Administration (DPSA), which is responsible for the Government Employees Housing Scheme (GEHS), said the current finance products are too expensive for most government employees who fall within the gap market.
It said as such, a market product needs to be developed for this segment of employees so that they can also become homeowners. This would require collaboration between government, government entities, development finance institutions and the commercial housing finance sector to develop such products that would accommodate these employees' market, DPSA said at the time.
GEHS is mandated to assist employees in accessing housing finance and loans on affordable terms.
At the beginning of this year, one financial institution told this publication that of the home finance applications received in 2024, 20% were approved and registered with it.
However, this week, Absa Home Loans said that they have observed that approvals have gradually improved since the repo rate started to come down from the third quarter of last year. The banking unit said that, in particular, declines related to affordability have reduced since then.
“In determining qualifying criteria for South Africans to afford a bond, factors like good credit score, debt-to-income ratio, affordability and employment stability are essential for securing a bond.
"The credit score reflects the borrower’s creditworthiness and ability to repay the loan, and a healthy credit score can lead to better interest rates and loan terms. A low debt-to-income ratio indicates the borrower has a manageable level of debt relative to their income.”
The financier said banks typically look for a stable and sufficient income to ensure that the borrower can meet the monthly bond repayments. When borrowers have a stable employment history, this generally suggests a reliable source of income.
Having said that, it added that variable income is considered by banks if this can be sufficiently evidenced.
Interest Rates
Ncapai said that further rate cuts by the South African Reserve Bank appear unlikely in the near future. Absa forecasts headline CPI inflation to approach 4% towards the end of this year and going into early 2026, making the case for rate cuts challenging, especially as the MPC looks to solidify its credentials around the 3% anchor.
She said they believe the scope to cut will emerge only from 2027. “As a baseline, Absa has pencilled in 50bp of easing in 2027 and a further 50bp in 2028, taking the repo rate to 6.00% over time.”
The managing executive said that with the repo rate likely to remain unchanged in the near term, property prices may stabilise while borrowing costs are unlikely to rise. This stability may attract more buyers to the market, potentially leading to a gradual increase in property prices, she says.
Ncapai adds that investors may find the stable repo rate environment attractive for long-term investments in the property market. “This could lead to increased demand for both residential and commercial properties.
“The unchanged repo rate may also boost market sentiment, as buyers and investors will have a clearer understanding of the borrowing costs over the next few years. This predictability can lead to more confident decision-making in property transactions,” she adds.
Absa Home Loans says that while banks can play a crucial role in stimulating bond approvals, by adjusting lending criteria to be more accommodating during the unchanged repo rate period, supported by their risk appetites and within the confines of the National Credit Act(NCA), providing financial education to consumers on the stable rate environment and how to manage their finances effectively is critical for growing their confidence in applying for bonds.
National residential property price inflation
Meanwhile, Statistics SA data released this week show that in April this year, the annual national residential property price inflation was 5.9%, an increase from a revised 5,5% in March this year. The residential property price index (RPPI) increased by 0.6% month-on-month in April.
The main contributors to the 5.9% annual national inflation rate were Western Cape (9.3% and contributing 3.6 percentage points) and Gauteng (3.0% and contributing 1.1 percentage points). The RPPI for all metropolitan areas increased by 5.4% between April 2024 and April 2025.
The main contributor to the 5.4% annual inflation rate for metropolitan areas was the City of Cape Town (9.0% contributing 3.3 percentage points). The RPPI for properties sold for the first time increased by 2.8% between April 2024 and April 2025. The index increased by 0.2% month-on-month in April this year.
*This article was first published by IOL News
The NEC is currently meeting at the Birchwood Hotel in Boksburg to assess the state of local government.
African National Congress (ANC) President Cyril Ramaphosa is set to unveil the party’s action plan aimed at turning around local government and service delivery.
Ramaphosa is presenting the action plan to the party’s national executive committee (NEC) in Boksburg on Sunday. The plan will set out the specific roles for ANC councillors in municipalities countrywide.
The NEC is currently meeting at the Birchwood Hotel in Boksburg to assess the state of local government.
Ramaphosa has admitted that many of the problems in local government stem from politicaland administrative leaders who lack the skills needed to improve service delivery.
To address this, Ramaphosa said the ANC has drawn up an action plan that will compile existing strategies and solutions to the challenges faced by municipalities.
He added that the action will prioritise the improvement of service delivery and the maintenance of essential municipal infrastructure.
“The ANC will measure the success of the Action Plan by the clear and visible improvements shown in every municipality and in whether we succeed in regaining people’s trust,” he said.
Ramaphosa said the ANC NEC will discuss and adopt the action plan this afternoon. The plan will be presented to all ANC councillors nationwide on Monday, who will convene in Johannesburg for a roll call.
*This article was first published by Eye Witness News
He was arrested last week when police, based in Worcester, conducted a stop and search on a vehicle, where they found and confiscated various marine life.
A man arrested for the illegal possession of marine life is set to appear at the Worcester Magistrate's Court on Monday.
He was arrested last week when police, based in Worcester, conducted a stop and search on a vehicle, where they found and confiscated various marine life.
Police spokesperson Wesley Twigg said this included the illegal possession of abalone.
“The vehicle, a maroon in colour Volkswagen Beetle, was stopped on the Aan De Doorns Extension Road, Johnson’s Park. The members searched the vehicle and found 287 units abalone, ten galjoen fish and 180 ale kurk in the vehicle.”
*This article was first published by Eye Witness News
The province’s economy has grown at a slow, yet very steady pace
By: Matshidiso Selebeleng
The Free State is continuing to position itself as a prime business location, having projected steady economic growth in recent years.
Despite the poor governance performance of several local municipalities - as highlighted by the recent visit by Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) to the province - the Free State economy has shown to be on an upward trajectory largely due to the stability and resilience of its agriculture and tourism sectors.
According to the economist and deputy president of the Truckers Association of South Africa (TASA), Tony Modise, the province’s economy has shown modest albeit uneven growth recently.
"In 2022, the Free State economy grew by at least 1.5%, after it had dropped by 0.1% in 2023. This makes it one of the slowest-growing provinces in the country.
“The main cause of this weak performance is the decline in mining output, which traditionally played a major role in the province’s GDP.
"Load shedding, ageing infrastructure, and underinvestment in the mining sector have accelerated this decline. Additionally, structural challenges in logistics, inefficiencies in the public sector, and limited private sector investment are further hindering economic progress," he told Journal News.
Modise pointed out that regions such as the Mangaung Metropolitan Municipality, Lejweleputswa District Municipality, as well as local municipalities such as Masilonyana, amongst others, can potentially boost the economic standing of the province as they have vast agricultural and mining areas.
He said the latter can only happen if infrastructure and special economic zones (SEZ) projects are developed at a faster pace, while rolling out efforts to curb unemployment in the province.
“The Free State province stands at a critical inflexion point, and it is also facing structural constraints such as high unemployment and declining mining output, amongst others. It also has increasing opportunities in agriculture, renewable energy, and logistics,” he said.
By: Lerato Mutlanyane
The rapid mushrooming of new black-led political parties in South Africa has sparked debate over whether this trend strengthens democracy through broader representation or weakens collective influence by splintering the black electorate to the benefit of minority groups.
According to the Independent Electoral Commission (IEC) of South Africa, the country had over 600 registered political parties before March this year. Of these, 383 were registered at the national level, while the remaining 226 were registered at either the provincial or municipal level.
Former president Jacob Zuma, who used to lead the ruling African National Congress (ANC), surprised many when he emerged as the leader of the fledgling uMkhonto we Sizwe Party (MKP), whose entry into domestic politics saw them eating significantly into the ANC’s voter base and subsequently unseating them in Zuma’s political stronghold of KwaZulu-Natal.
The MKP garnered almost 15% of the national vote, thus contributing significantly to the ANC’s decline to 40.2% - a record low for the ruling party since it assumed power in 1994.
Afrika Mayibuye Movement (AMM), which was launched by former Economic Freedom Fighter (EFF) and MKP heavyweight, Floyd Shivambu, on 5 September 2025, is now the newest kid on the block. Following a countrywide consultative campaign that began in June this year, AMM has now officially entered the political fray to also establish a voter base within the black electorate.
Seasoned political commentator Professor Sethulago Matebesi from the University of the Free State (UFS) said that despite there being 200 smaller parties contesting general elections in South Africa, their respective impact remains insignificant and often only serves to mislead the electorate.
He cautioned that beyond misleading voters and diluting black political power, many smaller parties risk being influenced by funders with questionable backgrounds who have little interest in advancing the black agenda.
“It is the nature of politics that whoever funds political parties usually has an interest — and in most cases, it is not to advance the so-called black agenda. Rather, it may be to control these parties and dictate terms to them.
“If that is the case, it would be unfortunate, because it carries serious implications for our politics and the future of this country. Even with over 200 smaller parties contesting elections, their impact is negligible. Instead, they mislead their voters and everyone associated with them. I still have to find a funder without vested interests in such a party,” said Professor Matebesi when approached for comment by Journal News.
While electorate fragmentation weakens established movements and supposedly misleads voters, other narratives suggest that it also has the potential to enrich South Africa’s political culture by holding dominant parties accountable, while amplifying diverse voices and strengthening multiparty democracy.
Therefore, the surge of black-led political parties reflects both the vibrancy and the vulnerability of South Africa’s democracy. The challenge for South Africa, therefore, lies in finding a balance between embracing political diversity and safeguarding unity to ensure that democracy remains both representative and effective.
By: Abigail Visagie
Residents of Heidedal, Bloemfontein, were left shocked after the discovery of a decomposed female torso and legs found floating in the flooded basement of a dilapidated nightclub in the area.
The remains were reportedly discovered on Friday afternoon by two children playing near the nightclub, who noticed what appeared to be a body floating in the basement.
They immediately informed nearby adults, who alerted the police.
According to traumatised residents, the abandoned building has been a source of concern for years, with claims that several unidentified bodies were previously discovered inside.
One community member, who asked not to be named, said the building had become a hideout for homeless people and criminals since its closure.
“We don’t know how many people have been killed and dumped in that basement. It is frightening to think our children play around there, not knowing what they might discover or whether they could become victims themselves. I plead with the authorities to demolish the building,” the resident said.
Police spokesperson Sergeant Mahlomola Kareli said the Bloemfontein Diving and Rescue Unit was dispatched to assist in recovering the remains due to the challenging conditions at the scene. He confirmed that the body was in an advanced state of decomposition, consisting only of a torso and legs.
“The victim was wearing multi-coloured leggings and a single Soviet sneaker on her left foot. An inquest has been opened, and a thorough investigation is underway,” Kareli said.
Police have appealed to anyone with information that could assist in identifying the deceased to contact Captain Wilson at the Heidedal police station on 082 553 6307.
