Property Barometer - Former "Township" Markets
FNB - South Africa
Former Black Township house price growth performance remains marginally ahead of the “Suburbs”, sustaining the “Affordability and delivery challenge”
The difference between former Township house price growth and that of the higher priced “Suburban” markets in recent times has been marginal. The 7.6% rate reflects some real price growth, being just above the consumer price inflation rate, and thus a solid market where demand is very well balanced with supply. A portion of the country’s 1st time buyers enter the residential markets via either the established parts of the former “Township” markets or via so-called Affordable Housing Developments, many of which are in or around these Township areas, and a high rate of 1st time buying activity in the past few years has arguably served these markets well.
From the point of view of those already owning homes, capital growth in real terms is normally welcome news.
However, from a point of view of those still wanting to acquire homes, ongoing real price growth caused by relative supply constraints is perhaps less good news at the lower income end of the market.
Property Barometer Townships Mar2014
Tenants liable when missing deadline to move out
IolProperty - South Africa
A landlord is entitled to rent for the whole period if the tenant fails to vacate a property on the due date. If the lease is a monthly one, it is terminable on a month's notice (Scopeful 130 (Pty) Ltd v Mechani Mag (Pty) Ltd 2008 (3) SA 483 (W). The tenant is required to give the landlord one calendar month's notice of his or her intention to move out.
If the tenant moves out after the calendar month's notice, for example, on the first day of the month, the tenant is liable for the month's rent. The tenant would also be liable for rent for the remaining period of the lease if she or he decided to end the lease prematurely.
This constitutes a breach of contract and the landlord can sue the tenant for the rent, unless he is able to find a tenant.
Property Barometer - January Transfer Duty
FNB - South Africa
A strong rate of transfer revenue growth reflects a solid property market, but also a weak economy with tax revenue pressure and rising effective tax rates
January SARS (South African Revenue Services) revenue data was released today, and the property transfer duty revenue component confirms various other data which still points to a solid property market of late. This source of revenue grew by a massive 49.44% year-on-year in January, a further increase from the previous month’s 42.5%.
Nevertheless, for the time being, transfer duty revenue growth continues to reflect what has in recent times been a well-balanced and buoyant property market. However, it also in part reflects a rising effective transfer duty rate due to no recent adjustments for property inflation bracket creep. Such a bracket creep effect also applies to personal income tax revenue, where double-digit year-on-year growth of 15% as at January is well out of line with wage bill growth hovering between 8 and 9% late last year.
This strong growth is largely the result of raising of the effective tax rate at last year’s budget, achieved through not fully adjusting tax brackets for inflation bracket creep. This year’s budget brings “more of the same. Therefore, fiscal policy is currently mildly constraining on residential property purchasing power via both transfer duty and income tax bracket creep
Property Barometer Jan Transfer Duty Revenue
Sectional title estate agents have to be well informed specialists
Rawson - South Africa
The selling of sectional title units requires specialist training – but this is quite often not acknowledged, says Tony Clarke, Managing Director of the Rawson Property Group. “All too often,” said Clarke recently, “sectional title estate agents are not particularly well informed about the legislation governing this sector of the property market. They have also often not studied the body corporate’s house rules, which vary from scheme to scheme and which can contain certain clauses which, had they known about these in advance, would probably have prevented certain buyers or tenants from concluding a deal.”
Quite frequently, said Clarke, it becomes apparent that the estate agent has allowed the buyer or tenant to make certain assumptions which are quite clearly at variance with the contract they are signing. “Typically,” said Clarke, “the buyer will assume that certain garage or storage space, communal areas or other facilities are for his use – only to find that this is not so.”