Phasing out of verbal leases a welcome change
IolProperty - South Africa
Currently, according to rental housing common law, residential leases can be verbal and the only requirement is that the notice periods be given in writing, but this can lead to numerous problems, either in miscommunication or some conditions being forgotten, says Michael Bauer, managing director of the estate agency IHPC.
Verbal agreements have so many interpretations and, because they are based on memory and what 'he and she said', they can become vague when a dispute arises, he said.
The decision to phase out verbal agreements as in the proposed changes to the Rental Housing Amendment Bill, which is currently sitting at Parliament and awaiting approval, will make it law that all lease agreements be committed to writing. The changes proposed will place the onus on the landlord to ensure his lease is in writing, and this will be enforceable in court or tribunal and no oral leases will be valid if the bill is passed.
House price indices
Absa - South Africa
Single-digit house price growth continues
Nominal year-on-year growth in the average value of homes in the middle segment of the South African housing market remained in single digits in February 2014, impacted by factors related to the economy, household finances and consumer confidence. However, base effects caused an uptick in nominal year-on-year price growth in two segments of the market. In real terms, i.e. after adjustment for the effect of consumer price inflation, house prices continued to deflate on a year-on-year basis in two segments, while low single-digit real growth was evident in one segment. These trends observed in house prices 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 middle-segment small, mediumsized and large homes
Residential property market trends and prospects will remain indicative of economic and employment growth, as well as developments with regard to household finances (income, consumption, saving and debt levels), consumer credit-risk profiles, inflation, interest rates, consumer confidence and banks’ lending criteria. These factors will drive the affordability of housing and accessibility of mortgage finance and will be reflected in property demand and supply conditions, price trends, market activity, buying patterns, transaction volumes and the demand for and growth in residential mortgage finance.
Single-digit nominal house price growth is forecast to continue in 2014 on the back of trends in and prospects for the economy, the household sector and related factors. Real house price growth will be a function of the combined effect of trends in nominal price growth and consumer price inflation.
Absa House Price Indices Feb 2014
Residential Property Indices
Lightstone - South Africa
Annual national house price inflation was recorded at 7.87% in January 2014 and increased by about 0.45% from the previous month. This increase in house price inflation was driven primarily by the major metros with Ekurhuleni growing at about 12.08% and Cape Town at 8.78%. From a provincial perspective Gauteng continues to drive national inflation growing at just under 8% while property values in the Eastern Cape have been growing at a lower rate of 2.9% annually.
Sentiment, not interest rates, the prime driver of residential property sales
Rawson - South Africa
The commonly held view that interest rates are a prime factor influencing the sale of residential property in South Africa is very far from true, says Wayne Albutt, Regional Sales Manager for the Rawson Property Group in the Western Cape. “The more one studies the property market,” said Albutt, “the more it becomes clear that what drives the market is sentiment. It is this that leads people to decide whether to buy – and at the moment sentiment in the South African residential sector is very bullish indeed.”
This, he said, is evidenced by the fact that most estate agents in the Western Cape saw sales rise significantly in 2013 – with the bulk of the increases being in the second half of that year – which, said Albutt, augers well for sales in 2014. The Rawson Property Group’s Western Cape franchises, for the record, saw sales rise by 43% in 2013 and, although this was undoubtedly a phenomenal achievement, many other estate agencies have reported sales increases of 20% plus. Asked to explain what it is that is creating this very bullish sentiment, Albutt said that in his view it emanates from the banks, whose sophisticated media activity is designed to improve the amount of ‘safe’ money being loaned on bonds.