The number of foreclosures initiated on residential properties has soared from about one million in 2006, the year that house prices peaked, to 2.8 million last year. There were 1.2 million foreclosure filings in just the first half of this year.
While it is true that excessively tight monetary policy conditions can undermine growth and employment, the low and at times negative policy rate prevailing in South Africa in recent years is indicative of an accommodative monetary policy stance. The bottom line is this: we cannot solve a structural growth problem with monetary policy, irrespective of our monetary policy framework.