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4 March 2010

FNB Ethekwini Property Barometer
FNB - South Africa
CONCLUSION
The near term outlook for eThekwini is one of further strengthening in demand and transaction volumes, and given the perception that this is a more cyclical regional economy than the more services-driven metros of Joburg, Tshwane and Cape Town, it is possible that the rapid manufacturing recovery off a low base may help eThekwini's recovery to slightly greater highs than those metros.

However, as in the case of the national economy, it would be un-wise to think that the residential market, or its key driver the household sector, is in good shape. 25% of total sales is still high percentage of sellers selling in order to downscale due to financial pressure, while the positive impact of last years rate cuts is expected to wear thin in the 2nd half of 2010.

As such, it is expected that high single-digit average house price inflation for 2010 as a whole will be as good as it gets for eThekwini.
Ethekwini Property Barometer

SA ranked 24th on property rights index
Property24.com - South Africa
According to the 2010 International Property Rights Index (IPRI) released on Tuesday, South Africa has retained its position at number 24 out of 125 countries measured.

The index is prepared annually from a study conducted by a Hernando de Soto, fellow at the Washington-based Property Rights Alliance. It is supported by 62 partner organisations worldwide, including SA's FMF.

"SA is in the top 20% of countries measured in this study and this bodes well for the future if the rating improves or even remains at this level, which it needs to do if SA is to fulfil its promise of being one of the world's high growth countries," says the Free Market Foundation (FMF).

"SA has shown that it has the potential to grow and prosper. All it needs is the continued application of policies, such as respect for property rights, which have been shown to play a crucial role in bringing about economic growth."
Property24.com

FNB February 2010 House Price Index
FNB - South Africa
OUTLOOK
Our outlook remains unchanged from recent months. The positive impact of last year's interest rate cuts is still expected to feed into the residential property numbers until the 2nd half of 2010. Economic growth above 3% is expected to positively contribute, too, to property in the near term. Therefore, our forecast of 8% average house price growth for 2010 as a whole remains. Why not higher? The household sector debt-to-disposable income ratio, although now on a declining trend, remains very high for the time being, limiting the household sector's ability to grow its borrowing for home-buying purposes.

2011 is expected to see something of pull-back in house price inflation, as the impact of rate cuts wears off, and given the Firstrand expectation that we may have some mild interest rate hiking next year.

In addition, we emphasise that although we believe that residential property is exiting the proverbial Death Zone, the risks to it remain significant, given the high levels of household debt, and given that we await the withdrawal of stimulus packages in some of the world's major economies, not knowing whether they will be able to stand on their own feet without such fiscal and monetary support.
FNB February House Price Index

Personal finance storm clouds loom on horizon
RealEstateWeb - South Africa
Buy a smaller home, have less fun, get ready for the big financial squeeze.

Looking through the 2010 soccer euphoria gripping South Africa, financial trouble is looming on the horizon for many households.

If you are buying a home now, consider opting for a smaller or cheaper property and keep some slack in your monthly budget to cope with home loan and household costs - which are set to rise, some maybe even dramatically. If you're staying put, revise your spending habits and start thinking of ways to prune your bills. You'll be paying a lot more for the basics in future, is the forecast from some economic experts.
RealEstateWeb

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