Residential building statistics
Absa - South Africa
Planning phase of residential building activity showed strong growth in the first quarter, whereas construction phase lagged
The first quarter of 2014 saw the planning phase of residential building activity in the South African market for new housing showing relatively strong growth on a year-on-year basis. The construction phase of new housing, traditionally lagging the planning phase, continued to contract in the first quarter compared with a year ago. These trends in private sector-financed residential building activity are based on data released by Statistics South Africa.
The number of new housing units for which building plans were approved by local government institutions increased by 2 204 units, or 18,6% year-on-year (y/y) to 14 036 units in the first three months of the year after year-on-year contractions in the third and fourth quarters of last year. On a month-on-month basis the number of plans passed was up by 695 units, or 14,6%, to 4 983 units. At a regional level the volume of plans approved with regard to new housing was largely driven by Gauteng (44,6% of the national total and growing by 20,5% y/y) and the Western Cape (23,6% of the total and growing by 60,4% y/y), while the Eastern Cape and the Northern Cape also recorded strong year-on-year growth in the number of plans approved, but from a relatively small base.
Building stats Mar 2014
Bank valuations for bonds can derail bond applications
Rawson - South Africa
While it is true that those South Africans hoping to buy a home – or are simply investing in residential property – these days tend to have a better understanding of how the banks’ loan criteria work when they apply for a bond, they are often surprised by the banks’ valuation procedures and the figures they arrive at, says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance.
“Although it is generally accepted that bank valuers are very carefully trained and work to internationally accredited criteria, this does not mean that they will all come up with the same valuations. Neither does it mean that they will agree with the valuations of highly professional estate agents with many years of experience operating in that particular market.”
The important point to grasp about bank valuations, said van Alphen, is that their aim is to assess whether the property is worth the price being paid for it so that should the bond borrower default on his bond payments they will be able to recover the full value of the money outstanding by selling the home.
Time for share block properties has gone
IolProperty - South Africa
There is really no good reason now for any block of flats or group housing scheme to be run as a share block company, and those that are should be converted to sectional title without delay.
The tax advantage of purchasing in a share block instead of a sectional title scheme was eliminated by SARS way back in 2002, and share block companies are tricky to run in terms of the requirements of the new Companies and Intellectual Property Commission (CIPC), says Andrew Schaefer of property management company Trafalgar.
'By contrast, conversion is a relatively simple process, especially if the share block company has an experienced managing agent and an attorney on hand to assist with the legalities of drawing up sectional plans, opening the sectional title register, transferring the new sectional title units to their owners and then removing those owners as shareholders of the share block company.'
Some shareholders, he says, may be reluctant to embark on this course because there are certain legal fees and costs involved. 'However, many laws and regulations have changed since share block was introduced to SA, and these shareholders should be aware that they could shortly come up against some very real - and possibly very expensive - problems if they stay as they are.'
Residential property is back on top
Moneyweb - South Africa
Sector contributed R191.4bn to the economy in 2012 - council.
JOHANNESBURG – South Africa’s property sector contributed R191.4 billion to the economy in 2012 – with residential property leading the pack.
The residential property sector contributed R104 billion to South Africa’s economy and the country’s fiscus benefited to the tune of R20.1 billion in taxes – extending to transfer taxes in property transactions and monthly rates and taxes.
This was revealed by the Property Sector Charter Council on Tuesday, in the release of its 14-month long research to gauge the size of economic activity in the country and the contribution of the property sector. Using research from Statistics South Africa, the council pegs the overall size of the property sector (including different sectors) at R4.9 trillion.
Investment Property Databank (IPD) compiled the research. Executive director Stan Gaurran describes residential property as having a “bigger slice of cake”. It also has an upper hand compared with the non-residential property sector. The value of property transactions, referred to as ‘direct expenditure’ in the research, sees the residential property industry come in at just over 46 billion, while the non-residential property industry records just over R43.9 billion.
South African house prices take a battering in dollar terms
House Price South Africa - South Africa
So we have been hearing all the good news recently. The broad message? The property market is steadily recovering. Experts have pointed to house price growth in 2013 at 9.92%. This after an almost zero growth 2011 and 2012 was welcome news indeed. Even better news is that with inflation being under control in 2013 at 5.7% this meant that house prices grew faster than inflation meaning a real growth of wealth after inflation.
However, this is correct only within the SA microcosm. It would be negligent to not consider the global picture at the same time. Over this same period the Rand has weakened significantly v the Dollar, Pound and Euro.
House Price South Africa