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1 August 2013

August 2013 Property Monthly
FNB - South Africa
EXECUTIVE SUMMARY – RESIDENTIAL SUPPLY CONSTRAINTS HAVE BECOME A KEY THEME
In recent times, the gradual residential rental and home buying demand growth of recent years has started to catch up with slower supply growth of residential stock. The economy had a good period up until mid-2012, but since then has not been setting the world alight. But investment in new residential stock since 2008 has also been slow, thus constraining supply growth and allowing demand growth to catch up somewhat. Therefore, varying degrees of stock constraints in home buying and rental markets have become a key theme.

Supply constraints have been mounting, and slow supply growth is not only an issue in the home buying market. There are clear signals from the residential rental industry that the rental market fundamentals are strengthening. While the CPI inflation rate for rentals increased only marginally in June, low levels of buy-to-let buying since 2008 have gradually led to mounting supply constraints in the rental market. The major portion of letting agents are now reporting shortages of rental stock. Get set for stronger rental inflation, which could see yields resume their rising trend of recent years, but the downside risk is possible upward pressure on CPI inflation and possibly interest rates.

On the home buying side, our 2nd quarter Estate Agent Survey showed 13% of respondents citing stock constraints, not yet severe but higher than a year or 2 ago. And so FNB House Price Index growth continued to accelerate mildly in July, From a revised year-on-year growth rate of 6.7% in June, the July growth rates reached 6.9%. In real terms (adjusting house prices for general inflation in the economy using the CPI), as at June we were still seeing mildly positive year-on-year house price inflation to the tune of +1.12%.
FNB Aug 2013 Property Monthly

Third Quarter Housing Review
Absa - South Africa
Taking account of economic and household finance trends and prospects as well as recent developments regarding house prices, single-digit nominal price growth is forecast for 2013. As a result of expected trends in nominal prices and headline consumer price inflation in the rest of the year, relatively low real house price inflation is projected for 2013.

The performance of and prospects for the residential property market will continue to be closely related to economic growth, employment and income growth, property running costs and living costs in general, interest rates, consumers’ credit risk profiles, consumer confidence and banks’ risk appetite and lending criteria. These factors will impact the affordability of housing and mortgage finance and will be reflected in property demand and supply conditions, price trends, market activity, buying trends, transaction volumes and the demand for mortgage finance.
Absa Housing Review 2013 Q3

If no date is set for rental payment, common law applies
IolProperty - South Africa
Sections 5 (6) (d) of the Rental Housing Act (the act) states that a lease must include, among several requirements listed, 'the frequency of rental payments if not paid monthly'; in other words, whether rental is payable daily, weekly, yearly or whatever period agreed between the parties.

The act does not mention what parties ought to do if the date of payment is not stipulated, or agreed upon.

Here, one has to turn to the common law, since the act did not change the common law rules relating to payment of rentals.

In terms of section 13 (6) (g) of the act, the Rental Housing Tribunal in its deliberations to formulate a ruling, must have regard to the common law if a particular matter is not specifically addressed in the regulations or a lease.
IolProperty

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