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Mortgages not viable - SAIRR
iAfrica.com - South Africa
About 83 percent of the nearly 14-million households in the country do not earn enough to qualify for bank housing loans, according to the latest SA Survey, published by the South African Institute of Race Relations (SAIRR) last week.

In 2009, approximately 60 percent of households earned R3 500 or less a month and qualified for a full state housing grant while 16 percent of households had to make their own contributions to government-subsidised houses based on their income (R3 500 —R7 000).

About 7 percent of households earned between R7 000 and R10 500 — enough to disqualify them from government housing programmes, but not enough to get a bank mortgage.

About 5 percent (700 000 households) fell in an income bracket high enough to qualify them for bank finance in the affordable housing sector.
iafrica.com/

Absa House Price Indices - January 2012
Absa - South Africa
House price growth remains low and is slowing down
The slowdown in nominal year-on-year house price growth, evident towards the end of 2011, continued in January 2012. On a monthly basis nominal price growth remained in negative territory up to the first month of the year. In real terms, i.e. after adjustment for the effect of inflation, house prices deflated further up to December last year against the backdrop of a consumer price inflation rate of 6,1 year-on-year (y/y) at year-end.

The slowdown in the pace of house price growth can be attributed to the combined effect of the following factors, which affect consumers and eventually impact housing demand, growth in mortgage finance and house price trends:

After interest rates were cut by 50 basis points in late 2008 and another 450 basis points in 2009, rates were lowered by a further 150 basis points in 2010. Last year saw interest rates remaining unchanged, not providing any further stimulus to the housing market.
Many consumers continued to experience some financial strain up to late 2011 against the background of a low level of household savings; rising consumer price inflation, impacting spending power; relatively high levels of household debt in relation to income; and damaged consumer credit records, affecting the accessibility of credit.

House Price Index_No 50 _Jan 2012_

Cape Town goes high-tech to monitor property transgressions
Iol.co.za - South Africa
Cape Town property owners beware: with the click of a button, the City of Cape Town can check that you do not contravene any building by-laws.

The city is using "eye-in-the sky" aircraft to produce hi-tech imagery to watch over, warn and even prosecute Cape property owners.

Property owners are being "watched" by council officials using sophisticated systems which combine maps and photographs, enabling a tight aerial view of any property in the city in seconds.

While aerial photographs have been taken by the municipality since 1997, dramatic recent improvements in IT, including image resolution and navigability, have significantly enhanced the use of the technology.

The Cape Argus had firsthand experience of the system last week when a municipal official was able to access aerial images of an Argus staffer's property and, within seconds, was able to explain over the telephone the details about a small garden shed that required planning permission.
iolproperty.co.za and City Map Viewer

4th Quarter 2011 FNB Segment House Review
FNB - South Africa
CONCLUSION
Since 2007/08, the two measures of home affordability have improved significantly., and this precipitated a significant increase in transaction volumes in 2009/10. However, in 2011 we saw these affordability improvements coming to an end, and with it the growth rate in property transactions by individuals slowed as 2011 progressed.

The residential property sector mini-recovery of 2009/10 lacked the intensity of the also credit-driven motor vehicle sector, and this is believed to be due largely to, firstly, the fact that vehicle affordability never deteriorated quite as

badly during the boom years of last decade, and secondly because the replacement cycle of a car is shorter than that of a home.

Financial pressures on the household sector are still significant from other sources. These include sharp municipal rates and tariff increases related to housing, but also big increases in petrol and food costs in 2011.

Rising consumer price pressures, and an economy not strongly supportive of household income growth, means that the search for affordability in the housing market is probably still continuing.

As a result, we have previously mentioned that more affordable areas are generally outperforming higher priced areas in terms of house price growth. Split by property type, too, we see evidence of the affordability search. The Full Title segment is outperforming the Sectional Title segment in terms of price growth, with each sub-segment of the Full Title market (split by room number) still being cheaper than the comparable sub-segment of the Sectional Title market. Split by size of home, too, we see the smaller-sized more affordable segment mildly outperforming the larger-sized units on average.

This “affordability drive” is expected to continue for the foreseeable future as households continue to repair their somewhat fragile balance sheets.

FNB Property Barometer_Segment Price Review _ Q4 2011

Ask the right questions

Moneyweb - South Africa
Important factors buyers need to think about when searching for property.

As the biggest investment decision many South African consumers will ever make, purchasing property is not one to be taken lightly and it is important for buyers to ask the right questions before committing to such a large investment, says Adrian Goslett, CEO of RE/MAX of Southern Africa.

Goslett says that with the increase in home loan approvals and increased activity in the property market in recent months, it seems likely that many more buyers will be entering the market looking to buy their first home. “While purchasing a home is an exciting venture that many South African consumers aspire to, there are a number of elements that buyers should consider and query before they make their final decision,” says Goslett.

He highlights the most important factors that buyers need to think about when searching for property in which to invest:
Moneyweb

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