Absa Mortgage Advances - May 2011
Absa - South Africa
Growth in mortgage advances at a low
Based on the latest data released by the South African Reserve Bank, the total value of outstanding credit balances in the country's household sector increased by 6,9% year-on-year (y/y) and 0,1% month-on-month (m/m) to a level of R1 126 billion in April 2011. In March this year, household credit growth of 7% was recorded compared with the same month last year. Household credit comprises instalment sales agreements, leasing finance, mortgage advances, overdrafts, credit card debt, and general loans and advances.
Growth in the value of outstanding mortgage balances at monetary institutions, comprising both commercial and residential mortgage loans, was virtually unchanged at 3% y/y in April from 2,9% y/y in March. These two months represent the lowest year-on-year growth on record in total mortgage advances since the mid-1960s. Total mortgage balances were up by R2,1 billion, or 0,2%, in April from March.
ABSA Mortgage Advances
Property deals cannot be exited after offer is accepted
RealEstateWeb - South Africa
Many believe, wrongly, that they can exit from a deal after the offer to purchase is accepted.
It may come as a surprise to many that South African conveyancers time and again find themselves faced with buyers who do not appreciate how binding and non-negotiable an offer to purchase is once the seller has accepted it and any suspensive clauses (e.g. the sale of another home or the granting of a bond) have been complied with.
It can be painful to have to point out that there is no escape route for the buyer between his offer being accepted and the transfer taking place other than in those cases where the seller has breached the terms of the contract. We regularly come across buyers who think that they have a right to veto the transfer - they do not appreciate that the registration of the transfer is simply the verification of a fait accompli, the acceptance of the offer.
Should a buyer for some reason (e.g. a sudden financial crisis or the discovery of a better priced, more attractive property) want to get out of the deal he can approach the seller for leniency and the cancellation of the agreement and he can offer to pay compensation.
Real Estate Web
FNB - South Africa
In short, therefore, our indicators suggest that residential demand went through a very mild "mini-recovery" in the summer months, and that, with a lag, this appears to have translated into a slight acceleration in year-on-year nominal (though not real) house price increase, as estimated in the FNB House Price Index.
Looking forward, however, the spectre of high oil prices, and higher consumer price inflation, could lead to possible interest rate hiking later in 2011, while economic growth slowdown is expected in the near term. Our valuers continue to suggest weak demand relative to supply, and this even after huge interest rate reductions since late-2008. This reflects the very weak financial and debt position of the household sector following the 2008/9 recession. As such, we remain of the opinion that, if the residential market cannot achieve respectable house price growth after such a huge interest rate stimulus, a period of house price decline would be the likely outcome of a possible phase of interest rate hiking, or of slowing economic growth, or both.
FNB Property Barometer
SARS land tax ruling shock for developers
Business Day - South Africa
Critics say judgment will deter companies from selling property
COMPANIES selling unused land will now have to pay tax on the proceeds, which the South African Revenue Service (SARS) regards as income.
Paying a hefty tax bill on such sales could retard the development of land, property and tax analysts warned yesterday.
They said a landmark judgment delivered earlier this month by the Supreme Court of Appeal would have profound tax consequences for landowners and property developers.
The Supreme Court of Appeal ruled against chemicals company AECI , which had formed an asset realisation company, Founders Hill, to develop and sell its land.
Absa Mortgage Advances - May 2011