Credit and mortgage advances
Absa - South Africa
Continued subdued growth in household credit and mortgage balances
2015 started off with continued low growth in the total value of outstanding credit balances in the South African household sector, with year-on-year (y/y) growth below the 4% level for the sixth consecutive month in January. Growth in household unsecured credit balances was lower compared with December last year, while growth in secured credit balances was at its lowest level since January 2012.
Household secured credit balances, with a value of (R1 076,6 billion at end-January and 75,8% of total household credit balances, recorded growth of 2,9% y/y at the end of January, virtually unchanged from October last year. Secured credit includes instalment sales, leasing finance and mortgage loans.
Growth in household unsecured credit balances, amounting to R343,6 billion at end-January and 24,2% of total household credit balances, came in at 5,3% y/y at the end of January (5,6% y/y at end-December 2014. Unsecured credit consists of general loans and advances, credit card debt and overdrafts.
Credit and mortgage advances (Jan 2015)
South Africa's low growth rate will limit prospects of an all-out housing boom
Rawson - South Africa
Although it has become traditional for the leaders in the residential development and marketing sector to comment on South Africa’s budgets, Bill Rawson, Chairman of the Rawson Property Group, said that on this occasion he did so only because he has received many enquiries on the subject.
“I dislike,” he said, “being in any way negative about South Africa and those who know me will know that I am generally positive. However, the current budget, although largely anticipated, does leave us very little ground for being wholly positive. One has to accept that the Finance Minister, Nhlanhla Nene, was faced with an incredibly difficult task and has acquitted himself well.
“I and many of those who work with me had been concerned that a growing deficit in relation to GDP would unsettle international opinion about South Africa. I am told now that in 2015/2016, the GDP deficit growth will be 3,9% and that this will be cut back to 2,6% in 2016/2017 and to 2,5% in the following year."
Is it illegal to claim a spotter's fee?
Knight Frank Residential - South Africa
According to Section 34A of the Estate Agency Affairs Act, any person who does not hold a Fidelity Fund Certificate may not earn commission on the sale of a property.
This rule would apply to those who try to claim or earn commission by referring agents to a buyer or a seller, thereby thinking they can earn a "spotters" or "finder's" fee, says Lanice Steward of Knight Frank Residential SA.
In a recent case mentioned in a Smith Tabata Buchanan Boyes property law update, Haigh Farming (Pty) Ltd ('Haigh Farming') instituted action against EG Elliot Real Estate CC ('Elliot Real Estate') for payment of a consultancy fee, which was a portion of commission Elliot Real Estate earned on deals given to it by Haigh Farming.
How show days can help you sell faster
RealNet - South Africa
In these days of online listings and video tours that are accessible even from a cell phone, home sellers may question the value of show days – but they should know that these events are still among the most effective ways to market real estate.
In fact, says Jan Davel, MD of the RealNet estate agency group, serious sellers should ensure that their agent holds at least one show day as soon as possible after listing, in order to give keen buyers the opportunity to view the home in person and envisage themselves living there.
“A show day also tends to be more relaxed environment for prospective buyers in which they feel less self-conscious about asking questions and having a really good look at the property than during a private viewing when the seller will most likely be present,” he says.
“The biggest advantage of a show day, though, is that it gives you an opportunity to show your home at its best to many prospective buyers at a time, and hopefully generate several offers to purchase once they have seen it. Indeed, multiple offers are quite common at the moment because of the shortage of homes for sale in popular areas – and this can save you weeks of “tidying up” every time your agent needs to bring an individual buyer round for a private viewing.”
Good credit habits for prospective tenants
BetterBond - South Africa
With buy-to-let investors and new rental stock both being in short supply, it is becoming increasingly difficult for prospective tenants to secure the homes they want – especially if they have a less-than-great credit history.
So says Shaun Rademeyer, CEO of SA’s leading mortgage origination group, BetterBond Home Loans, who notes: “SA landlords are quite understandably cautious when letting their properties to new tenants because legislation such as the PIE Act and the Consumer Protection Act make it very difficult for them to dislodge those tenants even if they default on their rent or damage the property.
“And to limit their risk, the first thing most landlords or managing agents will do now is draw a credit report to establish whether the prospective tenants have a history of paying their paying their bills on time and in full, and whether they have any current major debts outstanding or debt judgments against their names.”
Good credit habits for prospective tenants