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| Technology Boosts Property Sales |
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Estate agents say technology is playing an increasing role in the residential property market, especially in a buyers' market with prices dropping and purchasers spoilt for choice.
This week The Tribune canvassed agents on the use of technology and all said the internet, internal listing systems, and access to Deeds Office data and municipal rating information were critical for information-hungry buyers.
Chris Tyson of Tyson Properties said his group had invested heavily in technology by designing "the finest back-end system available to agents".
Tyson Properties received more than 300 web inquiries a month.
Mike Bennett, MD of ProProp said his company had tried to install "all the gizmos, from palmtops to laptop computers" and had found the most cost-effective way of using technology was to have a good internal listing system.
"We find we get a good response from web pages for the R1 million-plus market, which probably accounts to 10% of our sales."
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| Now For The Good Property News |
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Property trend analysts are impressed that in the first week of April mortgage loans granted in the US were 77% up on the April 2008 figure.
A similar, though not quite so spectacular, rise was recorded in the UK for the same period.
Drawing attention to this very welcome turnaround in the current situation, Tony Clarke, MD of Rawson Properties, asked the question: "Does this indicate that the recovery has begun? If one accepts the old maxim that USA and the UK set the economic patterns for the world, is it possible that in South Africa the long-awaited revival is not far off?"
Clarke said that although historically it has been accepted that there is a lag period of six months before the SA economy is influenced by the US/UK market, the latest ABSA figures show that, in real terms, the declines in South African house prices have been nowhere near as drastic as those of the US and UK markets.
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| Cape Town Mixed-Use Estate Expands |
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The final phase of a commercial and residential estate in Cape Town's Tygervalley has been launched.
Development started four years ago at Bella Rosa Village on four hectares of previously unzoned land along Durban Road. Now the final stage - offices and retail space - is being offered for sale or rental.
"Both the concept of the development and the partners in the project are first rate, which has been demonstrated by the popularity of the development so far," said Sarita Edwards, sales and leasing manager of Propergation Estates.
The land on which Bella Rosa now stands was bought ten years ago. The Italian village design has drawn high-net worth corporations and individuals who now occupy the office buildings and residential apartments.
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| World Cup 2010 to 'Boost South African Growth' |
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A leading economist says a recent estimate of a 0.8% boost to South Africa's gross domestic product (GDP) thanks to the football World Cup is conservative as the impact should be higher than this.
Chief economist at Econometrix, Dr Azar Jammine, said on Thursday that South Africa is unique in the world thanks to hosting the 2010 Fifa World Cup.
He notes that German GDP improved 2% as a result of hosting the last event and their economy is eight times the size of South Africa.
"A reversal in the decline in foreign tourism is likely - the semi-finals and finals are already sold out. It is mind-boggling what that will do for our economy," says Jammine.
"I think the effect will be higher than 0.8% of GDP."
"No one else has got that and the beauty of this is that it has got our infrastructure investment going long before other countries," says Jammine.
"Our momentum of infrastructure spending is rapid," he adds, saying that other countries are only now talking about investing in this area, while SA is already implementing building.
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| Rate Cut Vital to the South African Property Sector |
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The South African Reserve Bank's monetary policy is now hopelessly conservative and a significant drop in interest rates is essential to the property sector in particular.
So says Ivan Neethling, chairman of the Western Cape branch of the Institute of South African Estate Agents (IEA), who adds that "the release of the dismal fourth quarter, 2008, GDP figures should, in many people's view, have stirred the South African Reserve Bank into action and made them realise that they cannot delay an interest rate cut any longer".
A minimum cut of 2% followed by further cuts in mid-year, said Neethling, had been expected not only by the property sector but also by many economists and the business community as a whole.
"It does appear that the cries of ordinary South Africans, the business sector and leading politicians are falling on deaf ears. Mr Mboweni, it seems, is so determined to fight off the international credit crisis by keeping interest rates high that he is prepared to let the economy shrink further.
| Institute of South African Estate Agents (IEA), 24-03-2009 |
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| Mortgage Advances Growth Slows |
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The year-on-year (y/y) growth in the value of mortgage advances by monetary institutions (the total net outstanding balance on mortgage loans at these institutions) slowed down to 11,9% in January 2009 from 13,2% in December last year, based on data released by the South African Reserve Bank.
This was significantly lower than the 24,5% y/y growth in mortgage advances in January last year and was also the lowest growth rate recorded since May 2003 when it was at level of 11,9%. On a month-on-month basis the growth in net mortgage balances outstanding was only 0,1% in January, down from 0,4% in December.
Growth in mortgage advances to the household sector, largely related to residential property, was at a level of 9,9% y/y in January 2009. The amount of outstanding mortgage balances in the household sector was R700,7bn in January, with a share of 72,4% in total mortgage debt, which includes both residential and commercial mortgages.
Household mortgage advances had a share of 69,6% in total credit extended to the household sector in January 2009.
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| Property Industry Likes Budget, but… |
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The South African property industry's executives overwhelmingly approved of the Budget that was announced on Thursday, but there are also certain reservations.
Finance Minister Trevor Manuel is to be lauded for encouraging banks to extend credit to worthy customers as it has become apparent that generally, financial institutions are currently going beyond even the bounds of the stringent NCA regulations.
So says Dr. Andrew Golding, chief executive of Pam Golding Properties (PGP), who adds that another budget boon to home sellers is the raising the Capital Gains Tax (CGT) exclusion on the sale of a primary residence from a gross value of R1,5m to R2m – ie. those who sell their primary residence for less than R2m will not be liable for CGT.
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| Budget 2009 - The Good and The Bad |
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This year's budget came with good news and bad news. Perhaps the best of the lot was R13.6 billion in tax relief - one of the measures to help soften the blow of the economic crunch.
Under 65s who earn less than R54 200 per year will pay no taxes, as will those over 65 who earn less than R84 200.
Tax brackets have also been adjusted to keep pace with inflation.
Those with an annual taxable income below R150 000 will receive the bulk of the relief. The tax reductions for those under 65 range between 100% for those who earn R54 200 per year to 1.6% for those who earn R1mn.
For example, someone who earns R55 000 a year will this year pay 91% less tax. A person who earns R100 000 15.2% less and R500 000 per annum 3.6% less.
Finance Minister Trevor Manuel also doled out extra money to those who depend on social grants - a total of R13.2 billion over the next three years. He said the government would consider extending the child support grant to 18-year-olds.
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| South Africa Property Beat Other Equities - 2008 |
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South Africa's public property companies delivered the goods for investors, in stark contrast to most other equities. Property bosses crow.
South African listed property stocks continued to outperform local equities during 2008, despite the downturn in global financial markets and the sector's impressive resilience is set to continue in 2009.
SA-listed property outperformed SA equities by an impressive 18% when measuring total returns.
Norbert Sasse, Chairman of the Property Loan Stock Association of SA (PLSA) and CEO of South Africa's largest listed property company Growthpoint Properties Limited notes that many analysts advocate property's defensive qualities in turbulent markets. "The resilience of South African listed property stocks in the current climate may well be evidence of the defensive quality of South African listed property," says Sasse.
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| Economic Growth to Steady Property Market |
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The outlook for the South African property market this year is essentially one of stability. Normal supply and demand will prevail, with the “usual suspects” such as business patterns, changes in family needs and aspirations dictating demand and supply.
In other words, the speculative/investment element that drove the market to dizzy heights three years ago will remain absent, although we have seen the first signs of revival in this respect. However, delve a little deeper into the economic fundamentals and there’s every reason to expect the market to begin recovering in the latter half of 2009.
The numbers tell the story. Public sector spending in 2009 on roads, rail facilities and ports, amounting to about R180 billion, will prime the economic pumps.
World Cup spending is only 5% of this and the Gautrain 2%, so there’s unlikely to be a post-2010 hangover, suggesting that the property market will continue a steady climb out of the doldrums over the coming years.
| Gerhard Kotzé CEO of ERA South Africa, 20-01-2009 |
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