Property Barometer - Reasons for selling residential properties
FNB - South Africa
At 20% of total selling, the percentage of sellers down scaling due to financial pressure remains high, a reminder that there still exists widespread underlying financial pressure in South Africa’s household sector. The 2008/9 recession was a major blow to a highly-indebted household sector, from which is still recovering, and there is also the issue of sharp increases in electricity and other utilities tariffs related to housing as well as municipal rates.
The lower income groups have narrowed the gap with High Net Worth households in terms of percentage of selling in order to down scale due to financial pressure, benefiting to a relatively greater degree from major interest rate cuts since late-2008.
The increased percentage of these “financial pressure-related down-scalers” believed to be intending to buy another property as opposed to rent, reflects a combination of rentals perhaps having outpaced house price growth in recent years mildly, but also possibly some increased confidence in their own financial future.
Property Barometer - Reasons for Selling - Oct 2012
Cut-price deals are no guarantee for conveyancing
Mortgage strategy - UK
Businesses that rely on price cuts and gimmicks may well be struggling for business and should be avoided.
It is frustrating when your client moans that you cannot get them a mortgage deal they have read about in the press.
We are all aware that super-low rates and fee-free deals exist but they are not always accessible to your client, or the most suitable deal for them.
These mortgages make good headlines and appeal to punters because of a gimmick or feature that makes them stand out.
The same happens in the conveyancing sector, but this time the gimmicks and marketing ploys are targeted at you as well the customer. After all, the conveyancers are trying to get your referral business.
Residential building statistics - August 2012
Absa - South Africa
Some strain still evident in residential building activity
Residential building activity in respect of the planning phase of new housing contacted further in August 2012, whereas the construction phase improved compared with a year ago. These trends contributed to year-to-date activity levels, with plans approved showing a noticeable decline compared with the first eight months of last year. The construction phase, however, recorded some year-on-year growth over the same period, although still in single digits and most likely impacted by a strong uptick in growth in plans approved towards the end of 2011 and early this year.
Year-on-year (y/y) growth in the volume of new housing units for which building plans were approved was down by 5 607 units, or 32,1%, to a total of 11 841 units in the three month period from June to August this year, contributing to a contraction of 16,4% y/y in the first eight months of the year. A sharp slowdown in planning activity was evident in the segments for smaller-sized houses and flats and townhouses. Although these categories of housing are popular from an affordability perspective, the latest trends might be a reflection of recent and expected developments regarding household finances and investor demand for buy-to-let properties.
Residential Building stats - Aug 2012
Conditional clauses are key when buying a property
Iol - South Africa
Buying or selling a property comes with a lot of paperwork and legalese. However unlike the fine print in your microwave instruction manual you do need to go through the Offer to Purchase with a fine toothcomb.
All Offers to Purchase contain clauses with criteria that need to be met by the seller, the buyer or both parties. As such you'll find conditional clauses when dealing with a property purchase. The most common conditions include: that the purchase is contingent on the buyer obtaining a home loan or, that the purchase is subject the buyer's current property being sold.
When it comes to new entrants in the market (i.e. first time buyers) the sale will likely be dependent on the procurement of a home loan. Most new buyers don't have large deposits to put down and, more often than not, will not qualify for a 100% loan.
Property Barometer - Holiday town house price performance
FNB - South Africa
After a sizeable price correction in holiday town markets, some semblance of price stability may be returning in 2012.
Due to the non-essential nature of a holiday home, holiday home buying has taken more of a back seat to primary residential buying during the tough financial times of recent years. Now, in 2012, after a very significant real price decline in the FNB Holiday Towns Index, some return to price stability may be being observed.
While a move towards price stability is welcome, we remain of the belief that markets strongly driven by holiday home buying will remain subdued in the coming years. The global and domestic economies look set for a prolonged period of mediocrity, sustaining significant financial constraints on the household sector. In addition, municipalities and utilities (notably Eskom) still look set to ratchet up the rates and tariffs at rates well above consumer inflation. Under these conditions, we would still expect regions dominated by primary residential home buying to broadly outperform the more “non-essential” holiday markets.
Property Barometer Holiday Home Buying - Oct 2012
Property Barometer - Household sector - SARB Leading Indicator
FNB - South Africa
Despite slight monthly growth, the SARB Leading Indicator continues to point to a mediocre economy and flattish new mortgage lending
In short, despite a very slight improvement in the year-on-year growth rate of the Leading Indicator in August, the growth rate remains insignificant and well below the year-on-year growth of 2010.
This slower growth in the Indicator since 2010 has not only pointed the way to slower mortgage lending growth after the 2010 recovery surge. It has also long suggested that growth in real household disposable income and consumption expenditure would subside after a significant recovery out of negative growth back in 2009.
Year-on-year, real household disposable income growth peaked at a very high 5.7% in the final quarter of 2010. Thereafter, its growth has subsided to +3.5% by the 2nd quarter of 2012. This slowing in part explains slowing in new mortgage loan growth, and is also expected to lead to slowing real retail sales growth in the near term after a period of solid growth.
So despite some slight monthly improvement, the Leading Business Cycle Indicator continues to point to a flat economic growth, mortgage and consumer picture in the near term.
Property Barometer - Leading Indicator and new mortgage lending - Oct 2012