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FNB Property Barometer
FNB - South Africa
The December 2010 FNB House Price Index completes the picture for last year, a year which proved to be hard work for those in the property industry, although it was significantly better than 2009.

For December, the year-on-year rate of increase in the FNB House Price Index was 3.6%, which was unchanged from the November revised rate of growth of 3.6%. In real terms, i.e. adjusting for a November Consumer price inflation rate of 3.6% year-on-year, this means that November saw zero percent real change.

Examining 2010 as a whole, though, the picture was better than what the weak year-end figures suggest. The average price level was estimated to be 6.7% higher than the 2009 average price level, which translates into a real price average that was 2.3% higher in 2010 than in 2009, when taking the 1st 11 months of 2010 into account (We still await December CPI stats).

It must be said, though, that 2010 was a "tale of 2 halves", with the 1st half of the year showing an acceleration in average price growth, in response to massive interest rate cuts in 2008/9, while the 2nd half of the year showed a deceleration in price growth in response to the SARB putting the brakes on the pace of interest rate cutting from late-2009.

And then, right at the end of 2010, there were hints at some stabilization in nominal price growth,albeit at a very low rate of price increase.

It is too early to say whether the stabilization in the rate of price increase is any sign of a turnaround in the price trend, and at this stage we think probably not.
FNB Property Barometer

Absa House Price Index
Absa - South Africa
Growth in home values ended 2010 at a low
In the second half of 2010 price trends in the South African housing market differed substantially from the first six months of the year. Nominal year-on-year (y/y) growth in the value of middle-segment homes for which Absa approved mortgage finance (see explanatorynotes) was on a noticeable upward trend to average 11,1% y/y in the first half of 2010. However, price growth peaked around mid-year and slowed down significantly to an average of 2,6% y/y in the second half of the year. Nominal price growth of 6,8% was recorded for the full year (-0,3% in 2009), while in real terms, home values in the middle segment increased by an estimated 2,4% last year after declining by 6,9% in 2009.

The slower pace of house price growth in the last six months of 2010 is related to the base effect of a recovery in house price growth in the second half of 2009, while economic conditions such as slowing economic growth, job losses, stagnant consumer confidence and fewer interest rate cuts than in 2009, also played a role during 2010. Although interest rates are at their lowest level in more than 30 years, a relatively high household debt-to-income ratio, currently at 78,5%, and the effect of the National Credit Act, impacting banks' credit criteria, are limiting many consumers' ability to take up credit and increase the level of debt. This situation is reflected by year-on-year growth in household credit extension, as well as growth in household mortgage finance, which both remained in single digits up to late 2010.
Absa House Price Index

Regulator moves to shut down Wendy Machanik Property
RealEstateWeb - South Africa
Estate Agency Affairs Board hopes to "prevent" WMP from operating as an estate agent.

JOHANNESBURG - The Wendy Machanik Property (WMP) empire and Machanik personally may be prevented from operating as estate agents given that they do not currently have a valid fidelity fund certificate for 2011 and have not made an application for one either, according to the Estate Agency Affairs Board (EAAB).

Agents must have a fidelity fund certificate in order to operate legally. Each year they must comply with certain requirements that include paying a fee and submitting an audit report.

Early last year the EAAB received a tip-off from a whistleblower relating to certain alleged irregularities between the period April 13 2010 to July 9 2010 concerning the business affairs of WMP as well as numerous instances of non-compliance with the provisions of the Estate Agency Affairs Act (EAAA).

Conveyancing is changing
Financial Gazette - UK
Eddie Goldsmith, chairman of the newly formed Conveyancing Association, discusses the challenges conveyancers are facing as lenders cut down their panels
What does 2011 have in store for the conveyancing profession and what might this mean for Mortgage Finance Gazette readers?

In this article, I give you a conveyancer's view of the future landscape and the central challenges facing my industry on which we must work collaboratively with the lending community over the coming year. And there are indeed some big challenges ahead this year.

Having been a conveyancing solicitor for over 25 years I have at many times felt the wind of change blowing through my profession. At times the premature demise of conveyancers has been greatly exaggerated but it cannot be denied that this year is shaping up to be a defining one for my industry.

2011 will see a continued restriction in the size of lenders' conveyancing panels as experienced throughout 2010. This is a reality that is here to stay and serious conveyancers must think carefully (and quickly) about how they demonstrate quality to their lender colleagues.
Financial Gazette

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