Mortgage advances - February 2012
Absa - South Africa
Subdued growth in mortgage advances continues
The value of outstanding credit balances in the South African household sector increased by 6,6% year-on-year (y/y), to a level of R1 197,8 billion in February 2012. The month-onmonth increase in household credit balances was R11,6 billion, or 1%, in February. The total amount of outstanding private sector mortgage balances, which includes both commercial and residential mortgage loans, increased by 2,3% y/y to R1 072,2 million in February 2012. This resulted in a monthly rise of R3,6 billion, or 0,3%, in February from January.
In the household sector the value of outstanding mortgage balances, mainly related to residential property, was up by 1,6% y/y in January to an amount of R777,5 billion, which came to a share of 64,9% of total household credit balances. Month-on-month growth of R4 billion, or 0,5%, was recorded in household mortgage balances in February compared with January.
Mortgage advances Feb 2012_
Property Barometer - March House Price Index
FNB - South Africa
Although the world and local economy has been going through something of a good period of economic performance over the past 2 quarters or so, the expectation remains for a slower economic growth year for both the world and local economy.
However, slowing global commodity price growth, helped on by signs of global economic mediocrity, suggests that recorded consumer price inflation in SA should not be problematic in the near term from an interest rate point of view (Real life inflation may indeed be troublesome at present). Indeed, CPI inflation for February declined from 6.3% year-on-year in January to 6.1%, and could indeed return to the 3-6% target range within the next few months. This is expected to persuade the SARB to keep interest rates unchanged for the rest of 2012.
Ongoing low interest rates are expected to lead to further increase in borrower and lender confidence alike, as their perceptions of risk continue to improve. As a result, despite expectations of slower global and local economic growth for 2012 as a whole, we are now of the opinion that average house price growth for 2012 as a whole could achieve a higher, but not spectacular, rate of around 6% compared to 3.2% for the year of 2011 as a whole.
FNB Property Barometer_March 2012 House Price Index
'Embrace the property transfer process'
iol.co.za - South Africa
Are you unhappy about how long it takes to transfer your new home into your name? Have you been inconvenienced by transfer delays which meant you had to carry on renting in your old home? Have you had to reschedule your move into your new home due to delays? These are all problems experienced by home buyers on a regular basis, made even more topical now here in Cape Town due to delays coming from the City of Cape Town's Rates Department.
Property transfers almost always take longer than expected. It is a complex process and it can be delayed by many factors. Understanding the process will go a long way in avoiding any surprises and will prepare you for a smooth transition into your new home.
When purchasing a new home, the transfer processes revolve around satisfying the applicable regulatory environments surrounding property transactions. They are the Financial Intelligence Centre Act (FICA), the Transfer Duty Act (SARS), the Value Added Tax Act (also SARS) and the Municipal Property Rates Act. If you need a bond from a financial institution to finance the purchase, then you will of course have to follow that process of satisfying your bank's demand for documentation as well.
Standard Bank grabs crown in home loans
Standard Bank has overtaken Absa to become the mortgage bond market leader in South Africa, increasing the size of its home loan book to R275 billion from R244bn over the past 18 months.
Steven Barker, the head of home loans at Standard Bank, said yesterday that the lender had an overall market share of 32 percent at the end of last year, compared with about 27 percent previously, and it financed about one in three of all new mortgage advances.
The growth in Standard Bank's mortgage loan book is related to it writing a lot more business because not all its bank competitors, particularly Absa, have had as strong an appetite as in the past for providing mortgage finance.
Reserve Bank data showed that at the end of January last year Absa was the market leader with 30.57 percent of new mortgage advances, followed by Standard Bank (30.7 percent), Firstrand (18.48 percent) and Nedbank (16.83 percent).
Property Barometer - Gauteng March 2012
FNB - South Africa
COMMENT - PERCEPTIONS OF THE CITY OF JOBURG RESIDENTIAL MARKET
From our valuations activities in the region, our perception is that Gauteng’s market stability currently lies in and around its key City of Joburg “Northern Suburbs” business nodes. The Northern Suburbs are not immune to recessionary shocks such as the one of 2008/9, but a greater shortage of land for development does assist in supporting the property values in these areas. In addition, during the mediocre economic performance of recent years, the economies of the region’s prime business nodes are believed to hold up better, as many corporates streamline costs by centralizing certain functions to head offices, many of which are in Joburg’s northern business nodes.
By comparison, our feeling is that the West Rand residential market doesn’t quite possess the market strength of the northern suburbs, possibly still dealing with supply overhangs created by a building boom of a few years ago, which we perceive have been far more extreme than the building boom of the northern suburbs, due to greater land availability in parts of the West Rand.
Looking forward, rising congestion and transport costs (helped on by possible SANRAL Toll Road implementation) are also likely to benefit Joburg’s northern suburbs relative to the other major regions of “Greater Johannesburg”, as this sub-region is arguably the province’s key commuter destination.
Finally, also a probable source of support for the overall City of Joburg residential market is the fact that this metro possesses the prime “former township” region around Soweto. Soweto has been at the forefront of the transformation from a “dormitory town” township to a more suburban-like character with major improvements in the area of retail and services. This is significantly improving its popularity as a place to live, which in turn is supporting the “township “ component of the City of Joburg’s property market.
FNB Property Barometer_Gauteng_March 2012 House Price Index