 |
| South African Homeowners not in Storm Alone |
|
 |
 |
|
Hard-pressed South African homeowners at least have the consolation of knowing that they are not alone in battling with a poor property market and that inevitably conditions will improve.
That's the view of Mark Friend, vice president of Realogy Holdings, the holding company for a number of leading real estate organisations including ERA.
On a recent visit to South Africa to meet with agents and management of the ERA South Africa group, one of the most successful of the Realogy associate companies, Friend said tough local conditions mirrored the rest of the property world.
His areas of responsibility include Australia, Africa and Asia. His perspective on the markets of these regions is therefore based upon first-hand experience.
"The drivers in these respective markets are uncannily similar, driven mainly by poor business conditions, credit restrictions, high interest rates, mounting inflation and declining consumer disposable income.
|
 |
| Value of Building Plans Passed Down |
|
|
|
 |
The value of recorded building plans passed by larger municipalities at current prices during January to August 2008 decreased by 3,6% (-R1,997m) compared with January to August 2007.
Decreases were reported for residential buildings (-11,4% or -R3,467,800) and additions and alterations (-0,8% or -R114,4m).
These decreases were partially counteracted by an increase reported for non-residential buildings (15.1% or R1 585,2m).
Six provinces reported decreases in the value of building plans passed. The biggest contributor to the decrease of 3,6% was Gauteng (contributing -3,6 percentage points or -R1,997,600), followed by Western Cape (-1,8 percentage points or -R992,4m) and Eastern Cape (-1,8 percentage points or -R975,6m).
However, KwaZulu-Natal counteracted these decreases to a certain extent, increasing by 4,4 percentage points (R2,439m).
The real value of recorded building plans passed by larger municipalities (at constant 2000 prices) during January to August 2008 decreased by 14,9% (-R4,800,800) compared with January to August 2007.
| Statistics South Africa, 17-10-2008 |
Read more |
|
|
|
| Latest oobarometer reports 3,4 percent annual rise in house prices |
|
|
|
|
The latest ‘oobarometer’ price index, first launched by ooba in July this year, showed that average house prices have risen 3,4% in the month of September 2008, year on year.
The oobarometer also found that the average purchase price in September jumped 2,4% from August 2008 bringing the price rise since July 2008 to 1,6%.
The oobarometer recorded price declines in both July and August. September is the first price rise. With residential property sales down around 50% year on year, it is too early to say if this marginal growth in average house prices suggests prices will start rising. It is anticipated that the index will show low or negative growth in future months. With the significantly reduced transaction volumes in the residential market, the transactions mix may also be influencing the price data and increasing volatility.
Saul Geffen, chief executive of ooba, said that the average purchase price in September this year was R794,977, compared to R768,557 in the same month last year, a rise of 3,4%.
|
|
| What are your offshore options? |
|
|
|
|
Many South African property investors are now looking overseas to diversify their property portfolios while others are looking for emigration options.
Mariana Tolken, managing director of offshore property investment specialists, Gas Properties, provides an overview of five international property investment destinations.
Busy and bustling, wealth is largely on display in the vibrant city of New York. Not in the form of big expensive cars (only 20% of New Yorkers have such), top villas or over-the-top jewelled older ladies.
The wealth here is wealth of generations of investment tradition and the wealth of financial planning and preservation. For such people, the difficult financial situation in America of the moment is holding up and they are actually benefiting from this chaotic credit time.
Different destinations offer very different opportunities for property investment. And it is really important to know what it is you want from an offshore property investment.
|
|
| Developers Offer Cheap Deals |
|
|
|
|
Bargain buying opportunities are starting to appear on the market, particularly in new sectional title projects, as it becomes increasingly expensive for developers to keep unsold stock on their balance sheets.
For instance, in the northern suburbs of Johannesburg well-established sectional title developer Summercon is now advertising new studio, one and two bedroom apartments at average selling prices of R10,500/m2.
A search on real estate portals such as Landsdowne Investment Properties and Property Bargain Finder shows a number of new Johannesburg developments with asking prices of less than R10,000/m2.
That is significantly lower than the R15,000/m2 to R30,000/m2 that new sectional title stock was generally selling for in the northern suburbs of Johannesburg 12 to 18 months ago.
Summercon sales director Peter Blanckenberg confirms that pricing has become increasingly competitive, with the substantial slowdown in sales activity forcing developers to absorb building cost increases.
In fact, developers have not been able to pass building cost increases on to buyers for the past two years, says Blanckenberg. He notes this has created great pricing for investors and makes it a good time to increase one's exposure to the buy-to-let market.
|
|
| Changes to Landlords Tax Allowance |
|
|
|
|
The new Revenue Laws Amendment Bill, issued 1 August 2008, includes a proposal to revamp the allowance which applies to residential housing units let out by the taxpayer.
The new Revenue Laws Amendment Bill, issued 1 August 2008, proposes a number of interesting, but fairly complicated amendments to our Income Tax Act. Among them is a proposal to revamp the current section 13ter allowance which applies to residential housing units let out by the taxpayer, or occupied by full-time employees of the taxpayer. Tax Partner at Cameron & Prentice Chartered Accountants, David Warneke, examines the proposal.
The proposal is that, in place of the current write off 12% of the cost in the first year and 2% for the following 44 years i.e. a total write off period of 45 years with an upfront loading of deductions, the write off will be at the uniform rate of 5% over 20 years.
|
|
| Property and Economy Not Strong Yet |
|
|
|
|
The fact that the economy took a marked upward swing in the second quarter of this year (growing quarter on quarter by 4,9% after the first quarter's growth of only 2,1%) should not be taken as an indication that we are now into a strong economic period.
All of us in the residential sector have been watching the economic indicators closely because it is an historic fact that an upturn in the economy ushers in a rise in property prices and, while we all desperately want that, it is still, in my view, not yet here, says Tony Clarke, managing director of Rawson Properties.
Clarke said the improved second quarter growth figures had to be seen in comparison with those of the first quarter, in which mining and manufacturing had been hard hit by power shortages and the exceptionally high fuel prices.
|
|
| How to Qualify for a Bond? |
|
|
|
|
Before the introduction of National Credit Act (NCA), a buyer's affordability was based on 30% of his gross income without taking liabilities into account.
Where this may have been a far simpler procedure than the process used today, it often led to buyers being over indebted. Today, much more weight is placed on the client's surplus income.
"The first thing to do is check the client's gross income and make sure he qualifies for the purchase price of the property. Once the expendable amount required to qualify is determined, the next step is to minus the client's expenses from his gross income to see whether he has the required surplus available. We require the client to sign a declaration for us to undertake a credit bureau check. Information is also acquired by conducting an expenditure interview," says Deon Lessing, marketing director of Betterbond.
|
|
| Membership of GBCSA Growing! |
|
|
|
|
The Green Building Council of South Africa, having opened for membership at the SAPOA Convention in May, has been extremely well supported by the industry.
We are experiencing overwhelming interest and organisations are showing their commitment to the green
building movement by signing up as members. We currently have 100 members registered and this number continues to grow! Have you joined yet? Be a part of the
green building revolution- join now and take advantage of the GBCSA member rate for our inaugural convention which takes place at the CTICC from 2-4 November 2008.
| Green Building Council of South Africa, 09-09-2008 |
Read more |
|
|
|
| Turning Point in Property Market is Close |
|
|
|
|
The much-discussed low point in house sales and house prices could now be far closer than most people realise.
Analysing the Residential Property Price Ranger's (RPPR) latest figures for the Cape Peninsula, Bill Rawson, chairman of Rawson Properties, said that these show that, despite much negative comment from the public and media, prices have held up remarkably well.
"The average house price in the Cape Peninsula from March 2008 to June 2008 was R1,998,874. While this was well down on the R2,565,866 average for the same period in 2006, it was significantly up on the R1,689,617 average for 2007 and also up on the 2005 average of R1,892,220. These figures are not discouraging."
|
|
|
|
