Beware: property pain has just begun
Moneyweb - South Africa
Expect this year to go down as the worst this decade for the residential property market. FNB Commercial Property Finance property strategist John Loos, usually optimistic about bricks-and-mortar, says in his latest quarterly property market report that 2007 "could turn out to be residential property's annus horribilis of the current decade".
And, after last week's interest rate hike and another expected by some before the end of the year, agents around the country are reporting taking financial strain.
Earlier this year some bank representatives and their mortgage intermediaries poured cold water on concerns that the National Credit Act (NCA) had severely knocked the property market. Loos' latest report, released this week, suggests the NCA has indeed had a negative impact, though he still expects this to be short-term.
Residential prices outrun rentals
Rode's Property News - South Africa
Residential rentals have not remotely kept up with house-price growth over the last few years.
According to surveys conducted by Rode & Associates, rentals of flats, townhouses, and houses generally grew at a compound rate of roughly 4-8% over the last three years. This should be contrasted with a compounded national house-price growth rate of 19,3% p.a. over the same period. The result of this divergence in growth rates is, of course, the low net-income yields of 4-6% that residential investors currently face.
On the positive side, however, residential rentals did generally beat consumer inflation, which averaged about 4,5% p.a.
FF+ fears property price plunge
Business Day - South Africa
The Freedom Front Plus (FF+) is up in arms over the Tshwane Council's decision last week to approve low-cost housing in traditionally affluent areas in Pretoria and Centurion.
The party said property values would depreciate, but industry experts have a different opinion. Property economist Francois Viruly said yesterday that, when left to the market , the low-cost houses in these areas were likely to increase in value and become unaffordable for the low-income sector.
Conrad Beyers, FF+ city councillor, said he believed that the project, part of the Tshwane Spatial Development Strategy: 2010 and Beyond, had not been properly considered. He called it "an ideological programme of social engineering".
Reasons not to fear bumpy property ride
Residential property prices have hit a wobbly; here's why you shouldn't panic.
Moneyweb.co.za - South Africa
Residential property prices have hit a speed wobble, latest figures show. But don't let that put you off buying, or holding on to, bricks-and-mortar.
According to Standard Bank's latest figures, the median house price fell back to R585 000 in July, down from R620 000 in June - a drop not far off 6%.The figure for May was R600 000.
Property bears were pleased that prices finally seem to be dropping, rather than merely ticking upwards more sedately than two to three years ago, because this serves as confirmation they may have been right. South African residential property, they have been arguing, has been in bubble terrain and is set to burst.
US home loan crisis is a morality tale for SA
Business Report - South Africa
In the US, as the housing boom of 2001 to 2005 drove prices beyond the reach of many households, mortgage originators hit on a brilliant device for pushing their products.
They offered low-income households mortgage loans they wouldn't normally have been able to afford - at what they called "teaser rates".
For a specified period, borrowers were allowed to make monthly repayments, which covered only the interest cost of the loan. When the period expired, the normal repayment schedule kicked in.
At that point, many of these borrowers were hit by a double whammy - depending on when the bonds were taken out. Because in the intervening period, house prices had been falling and interest rates had been rising.
Insider Colour Supplement #1 - Hello and welcome
Welcome to the first issue of the Insider Colour Supplement, a new webzine designed to complement the Legal Technology Insider newsletter's coverage of legal IT developments and events. In particular it allows us to carry longer feature articles that we simply cannot accommodate space-wise within the newsletter and colour photography, which is just plain impossible in a newsletter that uses black ink on orange paper (unless you are David Dickinson).
Beware: property pain has just begun