Residential building statistics
Absa - South Africa
Little change in residential building activity in 2013 from 2012
Building activity in the South African market for new housing remained largely subdued in 2013, showing very little change from 2012.
Residential building activity will in 2014 continue to be affected by economic trends, household finances, property investment sentiment with regard to buy-to-let properties, and consumer confidence in general. These factors, together with trends in building costs and changing lifestyles, are expected to be reflected in the future demand for and supply of new housing, which will also be affected by activity in the secondary property market. Housing affordability is set to remain an important factor in view of households’ financial position, property prices, transaction costs and property running costs. Against the background of the above mentioned factors, it is expected that the focus in the South African market for new housing will largely remain on the segments for smaller-sized houses and higher-density flats and townhouses, as reflected by the trends in residential building activity since the mid-1990s.
Building stats Dec 2013
Assets do not necessarily assist in obtaining a bond award
Rawson - South Africa
One of the common mistakes made by potential home buyers is that they have somehow picked up the idea that if they have substantial assets, e.g. two or more properties, these will qualify them for a mortgage bond.
However, says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, the banks will almost certainly rate the bond applicant not on his assets but on his income. Bond-free properties can, however, sometimes be used as additional security or as a means of raising the necessary deposit and the legal fees. The banks will always, says van Alphen, take a very conservative view in examining the income sources and will prove particularly careful if they deem these to be unreliable.
“There are, in fact, no laws stipulating how and when a bank can issue a bond,” said van Alphen. “It is always their decision as to whether or not to do so. These days they will be guided by the National Credit Act and it has to be remembered that if they do act irresponsibly and allow a creditor a loan which clearly involves a significant risk they can be heavily penalized for contravening the act.”
Exorbitant rates loom for Joburg high-rise properties
IolProperty - South Africa
Tenants in the inner city of Joburg could be forced to pay 300 percent more in municipal rates than residents of Sandton if the City of Joburg has its way in a potential landmark case. The city plans to apply commercial rates to residential buildings when the building is a mixed-use one and there are shops on the ground floor.
This is what the Property Owners and Managers' Association (Poma) chairman, Renny Plit, said following a Supreme Court of Appeal (SCA) hearing in which the city has applied to overturn the previous rulings of the Valuations Appeal Board and the Johannesburg High Court.
'This is affordable housing that cannot afford to carry these costs. It's not just and fair,' said Plit. 'It would mean a tenant in town is paying 300 percent more than those in residential areas in Sandton. The problem we are facing is that commercial property tariffs are 300 percent more than residential tariffs.'
The city brought its case to the SCA this week against Connaught Properties, which owns a block of flats in Hillbrow called Park Mews. Previous rulings stated that the building should be paying 80 percent residential rates and 20 percent business rates.