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23 February 2012

‘State land grabs distort prices’
Business Report - South Africa
Government intervention is not appropriate in a land redistribution programme based on the willing buyer, willing seller model, according to Minister of Rural Development and Land Reform Gugile Nkwinti.

At a briefing in Boksburg on Friday, Nkwinti said when the government entered the fray, it caused a disjuncture in the market that resulted in land being inappropriately priced.

The media briefing followed a meeting of the National Reference Group (Nareg), which consists of representatives from traditional leadership, organised agriculture, emerging farmers and the government.

The meeting was called to discuss progress on the much criticised green paper on land reform.

Nkwinti said work on the green paper was proceeding at a rapid pace. Nkwinti revealed that the government believed the willing buyer, willing seller process worked only in private transactions between two individuals.
Business Report

December 2011 Residential Building Statistics
FNB - South Africa
OUTLOOK FOR 2012 – VERY MILD POSITIVE GROWTH IN RESIDENTIAL BUILDING COMPLETIONS EXPECTED
At almost exactly 50% of peak completions levels reached in 2007, we believe that the level of building activity will more-or-less stabilize in 2012, and show some mild low single-digit positive growth of around 2-5%. .Building plans passed for 2011 showed single-digit growth, and should interest rates stay at current levels, and the economy continue to grow albeit slower, some growth in completions can be achieved.

However, we would caution against expecting too much. It remains a challenging environment for the residential building sector. Economic growth is expected to be slower in 2012 compared to 2011, and 2011 already saw a growth slowing on 2010. In addition, the existing home market would appear to be well supplied and experiencing mediocre demand.

Until the existing home market achieves a better balance, and more significant house price growth, it is difficult to see any meaningful improvement in building activity. In such a well-supplied environment, it is difficult for the property development sector to bring competitively priced new housing stock to the market.

This is especially so with a 22.1% replacement cost gap, meaning that the replacement cost of the average existing house is 22.1% higher than the values of the existing house. This gap has narrowed slightly, but remains wide given the soft existing home market.
December 2011 Building Stats Update_Feb 2012

Scopa slams lack of land reform figures
News24.com - South Africa
Cape Town - It was "scandalous" that the rural development department did not know how much land the state owned, Parliament's Standing Committee on Public Accounts (Scopa) said on Tuesday.

"Don't you really think that it's scandalous that people who have submitted their claims more than 10 years ago... we still cannot be able to say this is what has been submitted to us, this is what has been processed, this is what is outstanding," Scopa chairperson Themba Godi said, SABC news reported.

"Maybe it's a reflection on the department, maybe it's a reflection on us as Parliament as well, but I'm just saying for the people out there, what a let-down."
News24.com

More 100% bonds granted by banks
iol - South Africa
A surprising number of home loans are being approved at 100 percent of the property price, according to the latest statistics from mortgage originator Betterbond, but this does not necessarily reveal a slackening of credit qualification criteria on the part of lenders.

These figures show that although most home loan applicants are still required to have a deposit of between 10 percent and 40 percent, depending on the type of property they want to buy, almost one in every five (18 percent) of the loan applications processed by Betterbond is now being approved for a 100 percent loan.

In addition to this, says Betterbond chief executive Rudi Botha, 13.5 percent of applicants are obtaining loans for up to 104 percent of the property's value through the special first-time buyers' packages being offered by some banks on affordable houses.

"This means that more people can get a foothold on the property market ladder at a time when interest rates and prices are low. In the case of first- time buyers, the loans sometimes even include transfer and bond registration costs that would otherwise have to be paid in cash.
iolproperty.co.za

 

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