Web Bytes 212

SA real house prices set for further decline in 2009
RodneyHayter.com - South Africa
Nominal year-on-year house price growth in the middle segment of the market in October as measured by Absa was at its lowest level since January 1993.

In all three categories of housing (small, medium-sized and large houses) Absa reports that nominal price growth edged lower in October compared with a year ago.
In real terms (i.e. after adjustment for inflation) house prices dropped further in September to their lowest level in almost three years.

The financial difficulties South African consumers are currently facing as a result of trends in domestic inflation, interest rates, real household disposable income, household debt and debt servicing, as well as the effect of the National Credit Act and the tightening of credit criteria by banks, have caused the housing market to cool off to levels not seen in many years.
RodneyHayter.com

Sars "misses a property trick"
Realestateweb.co.za - South Africa
How to cut tax and make everyone's money go much further - expert

Realestateweb's guest columnist and tax Partner at Cameron & Prentice Chartered Accountants David Warneke revisits the Revenue Laws Amendment Bill of 2008 - which has implications for property investors. He says a new housing allowance is only second prize.

The Revenue Laws Amendment Bill of 2008 proposes an allowance for employers who sell low cost housing to their employees.

Briefly, the general idea is that the sale of the low cost housing to the employee has to be on interest-free loan account, for a price that is no higher than the cost of the housing to the employer. The allowance granted to the employer is 10%, per annum, of the loan balance outstanding at each tax year end of the employer.

For example, if the employer sells a low cost house to an employee for R100 000 and does not demand any repayment for 10 years, the employer would enjoy an allowance of R10 000 each year for 10 years.
Realestateweb

Property crash puts future of law firms in doubt
Belfast Telegraph - Ireland
The future of many Northern Ireland law firms could be in doubt after a dramatic slump in conveyancing work.
One firm has already been declared bankrupt and staff at others have been laid off or taken pay cuts.

The Law Society, the regulatory body for solicitors, revealed that conveyancing work had dropped by two thirds in just six months following the collapse of the residential property market.

Society president Donald Eakin said more lawyers could lose their jobs before the situation improves.

"There has been a significant decrease in the volume of conveyancing work," he said.
"We would estimate a two thirds drop since Easter alone - that's when it really started to kick in.
Belfast Telegraph

George Bull: A practical approach is needed now
legalweek.com - UK
These are tough times for law firms. Formerly buoyant business streams are in the doldrums, prompting a war for talent in the recruitment of individuals with counter-cyclical skills, such as recovery and restructuring. Firms are looking hard at how previously busy transactional specialists can be put to good use in a downturn - with restructuring work offering the most obvious opportunities for the reassignment of lawyers.

The fact that skills are being successfully transferred illustrates that most firms can, with a little ingenuity, do something to improve their position. Although some commentators believe that total UK law firm revenues will increase in the current financial year (or, more cautiously, decline only modestly), one should not underestimate the devastating impact of the financial crisis on the legal sector; particularly on those firms that have historically specialised in residential conveyancing and other hard-hit areas. The latest projections suggest that the combined effect of the credit crunch, the ensuing recession, and the reforms brought about by the Legal Services Act will see some 3,000 law firms disappear over the next four years in the UK.
Legalweek.com