Property Barometer – Residential buy-to-let and rental market
FNB - South Africa
Buy-to-let buying remains weak, with the FNB Estate Agent Survey pointing to only very slight improvement, and agents don’t appear to expect much to change in the near term.
As mentioned on various occasions, in an environment where the household sector is under significant financial pressure, basics are key, and primary residential demand is king. This is visible in ongoing weakness in buy-to-let demand for residential property, as reported in the FNB Estate Agent Survey.
The 1st Quarter 2012 FNB Estate Agent Survey points to an only marginal improvement in buy-tolet buying. When expressed as a percentage of total buying, by-to-let buying edged up slightly to 9%, from 8% in the previous 4 quarters. From a 7% low point late in 2010, agents are thus suggesting that there has been very slight improvement in the level of buy-to-let buying, given that overall buying volumes in the residential market have also risen mildly in recent years.
But this percentage remains weak in comparison to the estimated 25% back in early-2004 at the height of the property boom. Besides widespread household financial pressure still being in existence, and often only “masked” by very low interest rates currently, the mediocre performance of the rental market would also not appear to make buying to let an overly attractive option at this stage.
Property Barometer_Buy_to_let_and_rental_Apr 2012
Lawyer fees ‘stifle home ownership’
Business Day - South Africa
Aaron Stanger, chairman of Aaron Stanger & Associates, says home ownership in SA is stifled by the high cost of legal fees as attorneys fear being accused of touting if they advertise discounts for conveyancing.
Home ownership in SA is stifled by the high cost of legal fees as attorneys fear being accused of touting if they advertise discounts for conveyancing, says Aaron Stanger, chairman of Aaron Stanger & Associates.
Conveyance is the only service that still has a recommended fee structure set by law societies. It ranges from about R3200 for a property valued at less than R80000 and R13000 for property of up to R1m. This does not include transfer duties, drafting and deeds fees, and the cost of clearance certificates.
Mr Stanger spoke out after a recent meeting between the Competition Commission and the Law Society of SA where unresolved issues about the rules of the attorneys’ profession and competition concerns were addressed.
How to make sure your agent is “for real”
Aida - South Africa
Although both homebuyers and sellers have the legislated power to stop bogus estate agents in their tracks, many are not aware of the steps they can take – or of the dangers of dealing with people who are not properly qualified or registered to handle property transactions.
“Much publicity has been given to the new compulsory qualifications for estate agents,” notes Ester Odendaal, operations manager for Aida National Franchises, “and since most of the national real estate groups like Aida have gone to great lengths to ensure that all their agents attain these qualifications, there has been a significant increase in professionalism in our industry.
“In addition, the past few difficult years in the property market have brought about a steep decline in agent numbers. But these two factors taken together don’t mean that there are no unqualified and unscrupulous people out there, acting as agents and taking homebuyers and sellers for a ride.
How to make sure
House sizes feel the effect of urban land shortages
iolproperty - South Africa
Many people don't realise just how radically the residential property market has adjusted to the tougher economic conditions and the land shortages of the past four years, says Lanice Steward, managing director of Anne Porter Knight Frank.
"We have read a great deal about the 'more realistic' prices of homes today - coupled with ongoing admonitions to sellers to accept this situation. But the latest FNB Property Barometer reveals that new residential stands, which in 1970-1974 averaged just over 1 000m², dropped by 2010 to the present to just over 500m² - half the size - on new developments.
"Similarly, average building sizes have dropped from 203m² in 1970-1974 to 146m² in 2010 to the present, and this figure is still declining."
Also affected, said Steward, have been the sectional title units, where the average size of new units today is 90m².