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28 October 2010

ABSA 4th Quarter Housing Review
Absa - South Africa
Outlook
Real economic growth of around 3% is forecast for 2010, expected to rise to just below 4% in 2011. South Africa's economic performance in the rest of the year and in 2011 will to a large extent depend on global economic developments. Inflation is forecast to reach a lower turning point in the near future and to increase gradually during the course of 2011. It is expected that interest rates will be cut once more over the short term, based on rand exchange rate movements and prospects for the economic cycle and inflation, but rates are forecast to remain unchanged for most of next year.

After middle-segment house price growth of a nominal 11% y/y was recorded in the first half of 2010, it started to slow down from the middle of the year and was significantly lower at 5,4% y/y in the third quarter. The slowdown in house price growth in the middle segment was related to the base effect of a recovery in price growth from mid-2009. However, prices declined by 2,6% q/q in the third quarter as a result of developments on the economic front.

Based on the abovementioned trends in house prices up to the third quarter of the year, average nominal price growth of around 7% y/y is forecast for 2010, reflecting the view that the declining trend is set to continue towards the end of the year. Against this background nominal house price growth for 2011 is expected to remain low. Real price growth for 2010 and 2011 will depend on nominal price trends as well as the average consumer price inflation rate for this year and next year.
ABSA 4th Quarter Housing Review

Is your sectional title in breach?
RealEstateWeb - South Africa
You have to form a quorum to conduct business on behalf of the body corporate.

Many trustees of sectional title schemes are not aware that if some trustees resign, those left running the body corporate, in terms of the Prescribed Management Rule 16, have to be able to form a quorum to conduct business on behalf of the body corporate-and the minimum number required even on the smallest schemes is two trustees or 50% of the originally elected trustees.

It quite often happens that after one or two trustees have left a (sometimes as a result of selling their units) the remainder may no longer meet the required quorum stipulations.

Not meeting the quorum requirements is illegal and an outright contravention of the law.
RealEstateWeb

FNB Property Barometer 4th Quarter
FNB - South Africa
OUTLOOK - PRICE DEFLATION FOR 2011 AS A WHOLE IS EXPECTED
After all the factors considered above, we retain the expectation of average price decline for 2011 as a whole, after an expected6.4% increase in the 2010 average price over 2009's average price.

This expectation stems in part from the set of FNB indicators, namely average time on the market and the Valuers' Market Strength Index, which point to a weak level of demand relative to supply or, otherwise put, an unrealistically priced market.

When the market is unbalanced in favour of supply, either demand has to catch up, supply has to drop, or prices have to fall. Indications are that supply of existing property is strong, with high levels of financial stress-related selling. Indications are also that residential demand is weakening. That leaves a price decline as seemingly the logical outcome.
FNB Property Barometer 4th Quarter

Traditional conveyancing seen as unsustainable
My Introducer - UK
OpenConvey, the online conveyancing portal, says that only online conveyancing services will be able to deliver the right level of service and continue to reduce the cost to intermediaries and their clients.

OpenConvey's Commercial Director, Jonathan Hall said:
"Ultimately, in a market like this all businesses are looking to control costs, provide good service and remain profitable. But there comes a point where, unless sufficient investment has been made in automation and new technology, traditional labour intensive practices will be unable to compete as pressure comes to bear on profit margins.

"Those practices that have had the foresight to take their business online and automate many of the administration functions are left with cost bases which will not allow them to compete without compromising service standards."
My Introducer

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