FNB Property Barometer - Aspirant home buyers have big disadvantages and banks can help
FNB - South Africa
Home loans banks represent the buyer, be it 1st time buyer or repeat buyer. They do not have a good history of pro-actively supporting their client to improve the quality of his home investment decision-making, nor in improving his ability to enter into property trades due to increased certainty regarding the level of funding availability.
Banks most often get criticized for negatively impacting the residential market due to turning down loan applications, even when the applicant clearly won’t be able to service the debt. We often hear industry people saying that “the demand is there but banks don’t want to lend”. Much of this “demand” that they refer to is NOT real demand. It is people punching far above their weight in terms of their home search, under the mistaken impression that they will get the required finance, and they waste the agent’s time. The banks are blamed even though the bank had not necessarily ever promised these aspirant buyers finance.
But where banks can make a greater contribution to the smooth functioning of the market is through supporting their client, the buyer and future buyer, with far better information, in the form of market information with which to improve the investment decision and the quality of the offer, and information regarding the finance available to the particular client. Better information in this regard is bound to improve efficiencies in the residential market, as a greater number of people adjust their aspirations “upfront” to get them into line with the resources available to them.
Property Barometer_It's tough for aspirant home buyers due to lack of information_Mar 2012
FNB Property Barometer - The foreign impact on the South African property market
FNB - South Africa
Foreign buyers remain, as always, are a relatively small group of buyers of South African residential property. However, there are signs that their contribution to overall buying is on the way up once more, with the effects of the recession of a few years ago gradually passing on.
More noticeable is a significant increase in the African continent’s contribution to foreign buying, according to the agents’ perceptions
. Against this, the outflow of emigrant sellers from the SA market appears to remain subdued, as one would expect in what is still a relatively tough period economically for many developed countries. This restricts job prospects, and thus the limits the attractiveness of certain traditionally popular emigration destinations.
The “net foreign effect” on the South African residential property market thus appears to be improving mildly, according to the FNB Estate Agent Survey.
Property Barometer_The Foreign Effect on SA Property_Mar 2012
Delay in Cape clearing rates certificates costing property owners
Iolproperty- South Africa
Property transactions worth millions have been delayed as the City of Cape Town battles to iron out problems its new electronic database is having in issuing rates clearance certificates.
The city said the period to issue certificates has increased from about five days to 35 days since the launch of its Integrated Spatial Information System in November.
One of the processes the system deals with is the issuing of rates clearance certificates, which must be issued before a property sale can be finalised.
The delays affect home buyers, sellers, estate agents and conveyancing attorneys.
Earlier this year, the city admitted there were "teething problems" with the new system.
In January, it said there were "unforeseen data and technical problems" when it switched over to the new system.
During a finance portfolio committee meeting yesterday, Trevor Blake, the director of revenue in the city's finance directorate, explained that the delays in the beginning were caused by the city's system and that of the attorneys "not speaking to each other".
Last week city officials met the Cape Town Law Society to discuss the issue.
Knight Frank Global House Price Index
Global house prices poised to fall in 2012
The Knight Frank Global House Price Index (GHPI), which tracks the performance of mainstream house prices worldwide, rose by just 0.5% in 2011 and recorded a 0.3% fall in the final quarter of the year, according to Kate Everett-Allen.
The Q4 results represent the index’s weakest quarterly performance since Q2 2009. This suggests that a return to significant house price growth around the world is some way off yet. No improvement is expected until the gap
between house prices and two of its key determinants – incomes and rents – starts to shrink and the excess supply of new homes built in many locations during the boom years prior to 2008 is absorbed.
In the final quarter of 2011 prices fell in 60% of the countries covered by the index. If that trend spreads to more locations, the overall GHPI could easily slip into negative territory during 2012, especially if the slowdown in Asia continues.
Knight Frank Q 4 2011 Index
Absa wants its mortgage market share back
Moneyweb - South Africa
Will target consumers through correct channels and better credit scoring.
JOHANNESBURG – Absa has the money, they are in the market and they want to lend money to property buyers in the market.
Sifiso Shongwe, managing executive of Absa Home Loans, told Moneyweb that the bank would like to debunk the myth that they are not in the market to extend advances for home loans.
He conceded that Absa have lost some market share due to their lower risk appetite in the last year and also because they wanted to position the business for growth, but said that they were looking to do 30% more business this year than in 2011.
The home loan market in South Africa is a R900bn industry and Absa’s book currently constitutes R221bn.
He said the strategy was among other things this year to focus on Absa’s existing customers as it is easier to do business with these individuals because the bank already understands the risk profile of the customers and can price accurately for them.