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6 September 2012

Property Barometer - House Price Index August 2012
FNB - South Africa
OUTLOOK
So where too from here? After a few months, it is becoming more evident that the slowing FNB House Price Index inflation rate is something of a short term trend, and not just a “once off”. This slowing growth comes as little surprise given signs of global and domestic economic weakness that have been building for some time.

On the labour remuneration front, the SARB has reported mediocre growth rates in the country’s nominal wage bill growth, in the order of 7.6% and 8.1% year-on-year for the 1st and 2nd quarters respectively. These growth rates are lower than the 9.6% average wage bill growth in 2011. In addition, 2011’s household disposable income growth was boosted by very strong growth in household net income from investments (termed income from “property” by the SARB), to the tune of 16.6%, as dividend income and the like “normalized” last year off a very low base after the 2008/9 recession. This growth in household income from investments is not expected continue at such a rapid pace.

It is quite likely, therefore, that household disposable income growth is currently slowing.

Therefore, in the coming months we anticipate further slowing in the year-on-year rate of increase in house prices, with the FNB House Price Index expected to end the year on lower year-on-year growth of between 3-5%.
FNB Property Barometer August 2012 House Price Index

Property Barometer - The 30 Year Loan
FNB - South Africa
Is it the right thing to do?
Given the tight economic conditions and post recession hangover, creative thinking is required to get ahead in the game. I have seen some interesting alternatives to the standard home loan being offered, one of which is the 30 year loan term. This alternative is marketed as an added benefit and is sold on the premise that it's a good thing.  Is it?  Well, perhaps, in the sense that a 30 year loan can make a loan immediately more affordable, with the monthly instalment on a 30 year loan being less than the monthly instalment on a 20 year loan granted at the same interest rate, at least in the current low interest rate environment.  However, one will pay the price of this benefit in the longer term.

I am under the impression that there exists a strong awareness of the "additional" interest charge that one will pay in total over the full 30 years, compared to the full 20 years on a shorter term home loan.  However, very little seems to be mentioned about the "other" potential risks of extending one's credit term.
30 Year Loans - August 2012

New Act will place greater responsibility on estate agents
iolproperty - South Africa
The new Consumer Protection Act (CPA) exposes agents to a greater risk than ever before says Elana Hopkins, an attorney with the Cape legal firm Dykes, van Heerden, Slabbert and Hopkins.

The new Consumer Protection Act governs the relationship between the buyer and the seller (if the seller is a "supplier" of properties) and the relationship between the estate agent, the buyer and seller in any residential property transaction.
iolproperty.co.za

Cutting corners on conveyancing can be dangerous
Mortgage strategy - UK
A good-quality law firm may not always offer clients the cheapest quote but it will provide peace of mind

Like a lot of things in life, you get what you pay for with legal property services. Of course, most clients naturally want to part with as little money as possible when it comes to conveyancing. After all, they have their savings pot mentally earmarked for soft furnishings or a flat screen TV in their new dream home.

And it isn’t surprising that most homebuyers consider it a job well done by their solicitor if the sale goes through smoothly and they move into their new home quickly. Of course, all may be well. In most cases it probably is, but not in all.
mortgagestrategy.co.uk

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