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31 January 2013

Property Barometer - affordability, 1st time buying and racial buying
FNB - South Africa
Better Economy, Faster Rate of Residential Property Ownership Transformation
The results of improved economic performance, and some years of affordability improvements, can be seen in the improved ability of new entrants to enter the residential property market.

The FNB Estate Agent Survey has pointed to some years of improved 1st time buyer activity, with 1st time buyers in 2011and 2012 estimated at 23% of total buyers. This is significantly higher than the 15% low of 2008.

In terms of race-based home buying, what are we seeing? Well, bear in mind that the FNB Estate Agent Survey is dominated by the “high-volume” former Apartheid-era white suburban areas. Therefore, transaction volumes could still be expected to be dominated by members of the so-called White population group. Indeed this is still the case.

However, since 2005 when our survey question regarding estimated percentage of buyers by race was introduced, we have seen the estimated total percentage of Black, Coloured and Indian buyers in these “suburban” areas broadly rising. From 43% in 2005, the percentage of buyers from these 3 “previously disadvantaged groups” rose to 50% of total buyers by 2008.

And the simple lesson? The faster the country can grow its economy (in a sustainable manner of course), the more rapidly it can racially transform residential property ownership. This was noticeable in the boom times up until 2008. We’ve made progress in racially transforming property markets no doubt. But when the economy stuttered in 2008, estate agents started to suggest thereafter that the process had gone backwards a little,2012 saw the progress resume once more.
Property Barometer_Affordability_1st Time buying and Racial Buying_Jan 2013

eThekwini takes years to register properties
Iol.co.za - South Africa
There are many cases of tenants and residents waiting for years for the eThekwini municipality to process their property ownership rights.

Registering a transfer with the deeds office takes between a few weeks and a few months.

The municipality, as discussed in this column last year, takes more than three years.

After two articles published last year, more people have come forward in an attempt to get their plights addressed.

One resident, Emmanuel Mabija, has been waiting almost nine years for the title deeds to his Cato Manor house.

Last month, questions were put to the eThekwini municipality's deputy head of housing, Yunus Sacoor, regarding the three cases mentioned below.

The municipality's responses appear below for each case.
Iol.co.za

Housing Review - First Quarter 2013
Absa - South Africa
The residential property market
Based on current trends in and prospects for the economy and the household sector, the outlook for the residential property market this year remains subdued.

Factors such as the performance of the economy, growth in employment and income, living costs, interest rates, consumers’ credit-risk profiles, banks’ risk appetite and lending criteria, and property running costs are set to remain important with regard to the affordability of property. These factors, in conjunction with the aspect of consumer confidence, will determine the showing of the residential property market this year, which will be reflected in demand and supply conditions, market activity, buying trends, transaction volumes and the demand for mortgage finance.

Against this background, the relatively low nominal house price growth of the past two years is forecast to continue in 2013. Further real house price deflation is projected for 2013 on the back of expected low nominal price growth and headline consumer price inflation forecast to average around 6% this year.
Absa Housing Review 2013 Q1

Property Barometer - Emigration and foreign buying
FNB - South Africa
Looking longer term, I believe that South Africa is likely to see further increase in the African foreign buyer percentage, as Africa’s economic fortunes continue to improve and its household wealth grows too.

In short, therefore, with regard to emigration selling of local property we do not appear to be seeing any negative impact (increase) from recently heightened domestic tensions. But it is important to understand that our “brain drain” problem has probably NOT permanently subsided. In different (better) global economic times, the negative impact may have been far more significant, as was the case in pre-recession early-2008 during the Eskom load shedding period, when many feared that the “lights were going out”.
Property Barometer_Emigration and Foreign Buying_Jan 2013

December 2012 Mortgage advances
Absa - South Africa
The residential property market
In view of trends in and the outlook for the economy, household finances and consumer confidence, growth in mortgage balances is forecast to remain in single digits in 2013. Although consumer price inflation is expected to rise to above 6% this year, interest rates are projected to remain at current levels before rising around mid-2014. Low interest rates will continue to support the property market and the affordability of mortgage finance.
Mortgage advances _Dec 2011

The bureaucratic hurdle in exploiting a R50bn property sector
Moneyweb - South Africa
JOHANNESBURG - Millions of South Africans have RDP houses and technically should have access to an asset that would allow them to create wealth: either by using it to get a loan to start a business, mortgage their home or to sell them. However, according the Centre for Affordable Housing and Finance (CAHF) only 36% of the 3.25 million RDP homeowners have a title deed indicating ownership of the property.

In 1994 the government implemented the Reconstruction and Development Programme (RDP) in order to address the housing inequality and shortages in townships. The building of RDP houses was also initiated to address the lack of property ownership in townships because of the 1913 Land Act that limited the amount of property black people could own to 7%.
Iol

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