Insufficient demand for building work biggest constraint
Rode - South Africa
Insufficient demand for building work remains the biggest constraint to a rebound in building activity, which is stating the obvious when considering the current jaded state of the economy.
In one of its quarterly surveys, the Bureau for Economic Research (BER) asks a panel of residential and non-residential contractors to rate the current seriousness of three constraints, namely insufficient demand for building work, shortages of skilled labour and inadequate supply of building materials. As the corresponding graph shows, insufficient demand for work has, since 2009, caused contractors the most headaches. During the building-boom years (shaded area in the graph) demand for work was, naturally, not an issue. Back then it was a shortage of skilled labour.
Although having improved slightly, confidence levels among building contractors remain low. During the third quarter of 2013, half the contractors surveyed by the BER still rated current business conditions as unsatisfactory. Naturally, confidence levels among contractors will only improve on the back of strong demand for work. The graph that follows depicts the near-perfect inverse relationship between the metric insufficient demand for work and the sentiment levels of contractors. Note the sharp drop in contractors’ business confidence as the lack of the demand for work started to become an issue.
Housing review - 4th Quarter 2013
Absa - South Africa
The performance of and prospects for the residential property market will continue to be closely related to economic growth, employment and household 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.
In view of current trends in and prospects for the abovementioned factors, as well as recent developments with regard to house price growth, single-digit nominal price growth is forecast for 2013 and 2014.
Based on the outlook for nominal price growth and headline consumer price inflation in the rest of the year and in 2014, moderate real house price inflation is projected over this period. Against the background of current conditions in and the outlook for the economy, household finances and consumer confidence, growth in outstanding household mortgage balances, which was below 3% y/y in the first eight months of 2013, is forecast to remain well in single-digit territory up to year-end and in 2014.
Residential building activity has picked up gradually during the course of 2013 and is expected to continue to steadily recover along with improved levels of building confidence registered in the first three quarters of the year. In view of a growing demand for housing, changing lifestyles and pressures on the affordability of housing, the focus of the past number of years on the supply of especially smaller-sized houses and the construction of higher-density flats and townhouses, is expected to continue.
Absa Housing Review 2013 Q4
Liquidation order always comes ahead of property mandate
IolProperty - South Africa
If during the process of a transfer of a property, a liquidation order (an application from a creditor to claim monies from a debtor) is passed, the order will be put ahead of the transfer mandate.
It is important for estate agents to check whether there is any chance, however remote, of this happening, says Lanice Steward, managing director of Knight Frank Residential SA.
Consumers, i.e. buyers of property, should be aware that the agent might not have investigated the property and seller fully and possibly does not know about the financial distress or imminent foreclosure of the property by the bank, said Steward.
This is mentioned in a court case, Biz Afrika 104s (In Liquidation) v Fuchs Roux Inc (the conveyancing firm, represented by Hartley), which was mentioned in a Smith Tabata Buchanan Boyes property law update, where the property was due to be transferred on the 30thof May 2012 but on the 11th May the conveyancer received a letter of demand from the attorneys acting for a creditor of Biz. The letter informed them that an urgent liquidation application would be issued and any monies would be paid to the creditor.
Rawson MD warns against high rental increases
Rawson - South Africa
In the current property market, landlords who continue to think that they can raise residential rentals annually by 10% (or even more) are creating a situation in which they are likely to lose tenants – and such lost tenants will be difficult to replace.
This was one of the more important messages delivered recently by Tony Clarke, Managing Director of the Rawson Property Group, to Rawson Rentals franchisees who had convened to plan strategies for the year ahead.
“You have to realise and accept,” said Clarke, “that there will almost always be some other landlord, probably advised by a sensible agent, who will be offering a more favourable, more equitable deal. If your landlord insists on being greedy, they will find that they will lose out.” Really good tenants, those who pay on time and care for the property, said Clarke, are not easily found and in the current market should be cherished and held onto.