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eThekwini Municipality embraces the future with electronic rates
Korbitec Municipal Services - South Africa
Many industries and businesses are turning to technological solutions to streamline systems and speed up processes. eThekwini Municipality is a leader in this forward-thinking trend within the property transfer process, and is embracing electronic solutions for rates clearances.

Obtaining a rates clearance certificate is an essential step in the successful transfer of a property, and this process has historically been the cause of many delays in registration. After a number of years of a sluggish property market, transfers are once again on the rise, and all parties involved in the property transfer process including sellers, buyers, estate agents and attorneys, benefit from a smoother, more efficient process.

With many municipalities striving to speed up the process for obtaining rates clearance figures and certificates, eThekwini Municipality has taken charge of the situation in the KwaZulu-Natal region. The municipality is upgrading their electronic system for rates clearances, which promises to be an incredibly positive step in moving the council forward.
eThekwini Electronic Rates

Household sector financial vulnerability
FNB - South Africa
In the 2ND quarter of 2013, our Household Sector Debt-Service Risk Index rose mildly once again. I regard this as an unwelcome move in the Index, which remains at high levels by historic standards. This implies a still-high level of household sector vulnerability to “unwanted shocks”. Such shocks can either be in the form of rising inflation and/or interest rates, or through weaker economic growth which in turn can exert pressure on disposable income growth.

Through 2012 and the 1st half of 2013, nominal household disposable income growth has been slowing to a year-on-year growth rate recently below 8%, and given our modest expectations for economic growth in 2013, it is not expected to be too much different in the near future.

Therefore, monthly household credit growth of 8.7% year-on-year as at July 2013 would appear unlikely to be meaningfully below household disposable income growth. However, calculating a seasonally adjusted month-on-month annualised growth rate, we see that a recent loss of growth momentum in household credit to around 6.25% by July (3-month moving average,) and this would suggest that the year-on-year growth rate in household sector credit will soon be significantly lower.

This is positive news, suggesting that we may soon get it right to slowly “engineer” a decline in the debt-to-disposable income ratio to lower and safer levels without having to hike interest rates to do the job, provided disposable income growth does not dip too much lower. This slowing household credit growth is largely due to slowing non-mortgage components of household credit growth, which may be the result of successful “verbal intervention” by the authorities.

In late-2012, we saw increasing concern being expressed by the Minister of Finance as well as the Credit Regulator, around strong growth in unsecured credit, and it would appear that some lenders may have taken heed of these “verbal interventions”, slowing certain lending components’ growth rates down. Such measures are important in terms of being able to get to a lower level of household indebtedness, and therefore lower debt-service risk, prior to the next interest rate hiking cycle.

But slower household credit growth needs to continue for a prolonged period in order to reduce the debt-to-disposable income ratio, preferably before the next interest rate hiking cycle.
Household Consumer vulnerabilty Sep_2013

Property 'agent' must provide proof of mandate
IolProperty - South Africa
A person has the right to bring legal action and the right to proceedings as the landlord, owner or relevant interested party to the contract. A resolution of the directors of a company, members of a close corporation or of trustees sets out the authority given to a person (an agent) to act on their behalf.

A person representing an entity (tenant or landlord) at the Rental Housing Tribunal is required to provide proof of its authority and the extent of its mandate. In the absence of such authorisation, the agent does not have the legal standing ( locus standi).

Landlord-tenant disputes can be resolved between parties themselves and they should be encouraged to do so.

Where an 'agent' (for example an attorney, a community organisation or an estate agent) acts for a party, it is incumbent that the agent places the interest of the client above its own.

Housing Affordability Review
FNB - South Africa
Some may find it strange that we point to affordability measures back down at relative lows last seen around 2003/4, but yet those years were a time of extreme house price growth whereas the current period is not. We believe that there is a good explanation for this, and it relates to a very different market psychology. Around 2003 to 2005, there was far stronger evidence of speculative property buying as well as far higher levels of buy-to-let buying than in more recent times. In addition, we believe that there was significantly more buyer panic back than now, which increased the sense of urgency of aspirant new entrants to the market, believing that if they “didn’t buy now it may be too expensive later”.

Neither of these features seem prevalent in the current market environment, and this is largely due to what happened in years prior. The pre-boom interest rate cuts from late-1998 came at a time where property prices were extremely affordable, thus precipitating massive demand surge and strong price growth which would later attract speculators and less sophisticated buyto- let buyers to the market in large numbers, along with “panicky buyers”. By comparison, the sharp interest rate cuts from late-2008 precipitated a far less extreme demand surge because they came at a time when housing was at a relatively inaffordable level. Therefore, the initial price growth momentum was never going to be sufficient to attract such groups of people. It remains a very “sane” market where buyers shop around and bide their time. Therein lies the key reason for such a difference in price growth performance between the present and a decade ago, despite similar affordability levels.

A few “secondary” explanations for the difference in price growth between then and now also emanate from certain other affordability measures. These point to a deterioration in recent years in affordability in some key housing related costs in the form of municipal rates and utilities tariffs. In addition, competing expenditure items in the form of consumer goods and services have improved their affordability since a decade ago significantly, thus making housing less “price competitive” over the past decade or more. Yes, the reality is that housing has to compete with other household expenditure priorities for a “slice of the disposable income pie”.

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