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26 January 2012

FNB Home Buying Estate Agent Survey by Segment
FNB - South Africa FNB Estate Agent Survey by Segment suggests that the “lower priced” market segments looked the healthiest in 2011

CONCLUSION – What’s troubling the High Net Worth Segment?
It would appear that the lower end of the market had the healthier “fundamentals”, in terms of demand and market balance, while the High Net Worth segment continues to be the weak part of the market.
 
The FNB Estate Agent Survey suggests that the metro market segment that agents define as the Lower Income Segment (with average value at R679,000), showed the strongest demand-supply “fundamentals” of the 4 “suburban”
income segments during 2011. It recorded the highest average agent demand rating for the year, and was the only segment to see its demand rating for 2011 at a higher level than 2010. It was also the only segment whose average
estimated time of homes on the market did not rise in 2011, compared to 2010.
 
When it comes to financial strength, however, it would appear that the Middle Income Segment, with average price around R1.2m, took the honours when comparing the levels of selling in order to downscale due to financial pressure with selling in order to upgrade, between the different segments.
 
FNB Property Barometer – The strongest and weakest of 2011
FNB - South Africa
Holiday property buying may have mildly improved in 2011, but insufficient to turn holiday town property price performances significantly for the better yet. Former Black Townships, on the other hand, arguably had far less shortage of support given the need for primary residential affordability.
 
Looking forward, the major metros, and other primary residential demand-driven regions, are expected to continue to outperform the more holiday-driven regions. This expectation is based on signs that the global and domestic economy are forecast to show slowing growth this year, while the Reserve Bank appears increasingly unlikely to cut interest rates any further in the near term. Under “tight” economic circumstances the focus should continue to be “basics”, and thus primary residential buying, which benefits the metros to a greater degree. The other key challenge still facing holiday markets are the very sharp hikes in municipal rates and utilities tariffs associated with housing. This is believed to be making the owning more than one non-income generating home significantly less attractive for many.
 
Residential property industry faces another challenging year
Moneyweb - South Africa
Estate agencies are facing a challenging twelve months.

With another sluggish year likely for residential property in South Africa, estate agencies are facing a challenging twelve months.

“As with 2011, property prices are just holding their own which impacts on agents’ commissions,” says Herschel Jawitz, CE of Jawitz Properties. “Unlike other industries where professional fees are charged, our commission doesn’t go up with inflation each year.  The only ways our earnings increase is if property prices increase, or we sell more properties.”

If property prices only go up by two or three percent in 2012 then, in real terms, commission earnings will decline. “Added to this, costs are increasing by at least 10%, and the equation becomes  interesting.  Normally, if you are sacrificing margins you can try to make up the numbers with higher volumes but the numbers of sales for the most part are going to be flat year-on-year and in some areas may even decline.”

The economics are simple – fewer sales, flat prices, and homes taking longer to sell equates to  estate agencies spending more money with less return.
Moneyweb

Pity the poor conveyancer
The Guardian - UK
Dwindling fees, higher insurance premiums, a flat property market - but at least the public like their high street conveyancer

The legal element of buying a house is regarded as a necessary evil, the part that always slows the transaction down. This isn't necessarily true, of course. But conveyancing is proving to be just as much of a pain to the legal profession as it can be to the public.

Back in the 1960s conveyancing accounted for around half of the profession's income; now it is probably less than 10%, even though most legal practices in England and Wales register at least one dealing at the Land Registry each year. The recession is not the only thing to blame. Lawyers have not been slow to undercut each other and drive down fees, especially with a growing number of volume conveyancing operations that are able to process straightforward transactions in a systemised, low-cost manner.

The challenge of licensed conveyancers – a 1980s creation to break solicitors' monopoly – is also significant and indeed two firms of licensed conveyancers, MyHomeMove and Countrywide Property Lawyers, handle more transactions than any solicitors' practice. And the relatively recent practice of paying estate agents for referrals has eaten into profit margins, and conveyancers want the government to extend its proposed ban on referral fees in personal injury work to cover them as well.
The Guardian.co.uk

 

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