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11 October 2012

House price indices
Absa - South Africa
Further uptick in annual house price growth
Year-on-year growth in the average value of homes in the middle segment of the South African housing market improved somewhat further in September this year from August. However, month-on-month price growth tapered off to some extent, pointing to a subdued near-term price performance. These trends are 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 in the middle segment of the market (see explanatory notes).

September 2012 saw middle-segment home values rising by a nominal 1,2% year-on-year (y/y), after marginal price growth of 0,3% y/y in August. In the first nine months of the year house prices were down by an average 1% y/y, affected by continued annual price deflation in the small segment of the market. Month-on-month price growth, however, slowed down in recent months after being on a gradual rising trend up to mid-year. The slowing momentum in monthly house price growth is attributed to the household sector still experiencing a fair amount of financial pressure.

Real house price deflation continued up to August 2012, but the momentum has slowed down on the back of some improvement in nominal price growth as well as a lower headline consumer price inflation rate, currently at 5% y/y, compared with a rate of above 6% early this year.
House Price Indices Sept 2012

Number of home loans fall to all-time low
iolProperty - South Africa
The number of mortgage bonds issued fell to an all-time low of about 9 000 a month in the third quarter from a peak of more than 50 000 a month in 2007, according to property analysts Lightstone.

Tony Clarke, the managing director of the Rawson Property Group, said yesterday that while this might look discouraging, those in the property market took heart from other data that showed the loan to value ratio was improving steadily for all the major banks except Investec, which was coming off a very high base.

Clarke said this data showed banks were willing to approve bigger loans and the average value of bonds approved had risen steadily, from about R400 000 in 2004 to about R800 000 this year. The value of second bonds had also increased, to an average of R350 000 from about R300 000 last year, he said.

Clarke said the government would be encouraged by the 16 percent year-on-year increase in the number of bonds issued in the affordable category, where house values range from R250 000 to R700 000. The number of bonds approved for township properties had also increased by 13 percent.
iolproperty.co.za

Cape Town 2012 General Valuation Roll (GV2012)
City of Cape Town
Council approved the production of a 2012 General Valuation Roll (GV2012), which means that the GV2012 project is officially under way.

In terms of legislation, a valuation roll remains valid for the financial year in which it is produced, and then for one or more subsequent financial years as the municipality may decide, but in total, not for more than four financial years.

It is best to conduct regular valuations, as long periods between valuations results in significant shifts in values. Due to the fact that there have been shifts in the property market since the GV2009 valuation roll, the City has chosen to have its next General Valuation Roll – GV2012 - after only 3 years.

The date of valuation of the GV2012 is 1 July 2012. All the properties are valued as at the same date of valuation in order to ensure fairness. The City’s valuations are based on actual property transactions (sales) that have taken place in the open market around the date of valuation. The Local Government: Municipal Property Rates Act, no 6 of 2004, states that all properties on the valuation roll must be valued at market value. Market value is defined as “the amount the property would have realized if sold on the date of valuation in the open market by a willing buyer to a willing seller.”
capetown.gov.za

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