House Price Indices - August 2012
Absa - South Africa
House prices show marginal growth
Marginally positive year-on-year growth was recorded in the average value of homes in the middle segment of the South African housing market in August 2012, while trends in month-on-month growth point to a continued subdued price performance in the near term. This is according to the Absa house price indices, which are based on applications for mortgage finance received and approved by the bank in respect of small, medium-sized and large homes (see explanatory notes).
Home values in the middle segment of the housing market were up by a marginal 0,2% year-on-year (y/y) in August this year after declining by a revised 0,5% y/y in July. Annual house price growth has been in negative territory since the beginning of the year, largely affected by continued price deflation in the small category of the middle segment of the market. On a month-on-month basis house prices improved gradually since the end of the first quarter this year, but monthly growth is slowing down again in all three middle-segment categories.
In real terms, i.e. after adjustment for the effect of inflation, house price deflation continued up to July 2012, but the momentum is slowing down on the back of nominal price trends and the headline consumer price inflation rate which tapered off to 4,9% y/y in July from a recent high of 6,3% y/y in January this year.
Absa HPI Aug 2012
Shared ownership can be a trap
Chas Everitt International - South Africa
In recent years when home loans have been so difficult to come by, potential buyers have often been urged to pool their resources with friends or family members so that they can qualify for a bond and get on the property ladder as soon as possible.
However, says Berry Everitt, MD of the Chas Everitt International property group, not enough has been said about the problems that can arise in shared ownership or partnership situations, and what needs to be done pre-purchase in order to counter these.
Some of the potential difficulties with this type of purchase were highlighted recently in a study by Cambridge University of the effectiveness of a government-backed shared ownership scheme in the UK, he says.
It found that many homeowners in such schemes had become trapped, unable either to sell their shares in properties they had bought with other people, or to buy out their partners’ shares and “staircase” to full ownership of the properties.
Row over bank sale of repossessed properties rages on
Iolproperty - South Africa
Homeowners, crippled by economic pressures and unable to pay their bonds, have accused banks of selling their repossessed homes for far less than they are worth, and refusing higher prices or renegotiated payments to secure a quick buy.
Online auctioning procedures controlled by the banks have also come under fire for failing to get the best prices for properties.
Recently, The Mercury published an article about eManzimtoti financial adviser Wilfred Hale, who offered R400 000 for a property on online auction site myroof.co.za, only to have his offer declined by Standard Bank, which then sold it at a public auction for R40 000 less.
Hale followed legal procedure and lodged an official complaint with the bank, giving it 15 days to respond, which it did not do. He then lodged a complaint with the banking ombudsman's Financial Services Board on Thursday.
Improved heritage process for renovation of older KZN properties
Iolproperty - South Africa
KZN provincial heritage agency Amafa announced yesterday that all applications to alter or demolish listed buildings, including all buildings more than 60 years old, would be subject to new approval procedures.
This includes the need to advertise in the KZN Government Gazette and to allow for a new 30-day period for objections.
Amafa said in a statement that, until now, the statutory heritage council review committees had decided on a case-by-case basis whether there was a need for public participation.
"However, legal advice we have received is that the Promotion of Administrative Justice Act requires the new procedure."
This meant that all applications for alteration or demolition were likely to be delayed for another two to three weeks, because of the need to bring the permit-issuing process in KZN into line with practice in the other provinces and at national level.