Mortgage stress soars

SOUTH African mortgage distress jumped to a record high in the first half of the year, according to the Alliance Group's Distressed Asset Index.

The index covers homeowners that are at least two months behind in monthly payments.

Alliance Group chief executive Rael Levitt said there had been a sharp increase in liquidations and insolvencies of high end properties and average auction values jumped by 23 percent in the last quarter.

Though distressed sales in all provinces in June was higher than last year, Gauteng and Western Cape were hardest hit with some home prices having fallen by 20 percent.

Standard Bank economist Johan Botha said the weakness in the property market is set to continue.

"The best we can hope for is for price declines to stabilise towards the end of the year as the recent interest rate cuts work their way through the economy and overall sentiment improves."