House price indices
Absa - South Africa
Stable house price growth in the first half of 2014
Nominal year-on-year growth in the average value of homes in the middle segment of the South African housing market remained relatively stable in a close range of between 8,5% and 9% since September last year. Current trends in the domestic macro economy and the household sector do not appear to be supportive of a significant improvement in residential property market conditions over the short term. Economic and employment growth remains subdued, while upward pressure on inflation and interest rates continue. These factors negatively affect consumers’ disposable income, consumption expenditure, saving, confidence and the affordability of and demand for credit.
Based on house price trends in the first half of the year and market prospects, nominal price growth of around 8% this year and 6% next year is expected. Real house price growth will be driven by trends in nominal price growth and inflation and is projected at about 1,5% and 0,5% in 2014 and 2015 respectively, with higher interest rates to adversely affect the affordability of and demand for housing and mortgage finance.
House Price Indices June 2014
Foreigners buying more SA real estate
Sothebys International Realty - South Africa
Foreign buyers purchased almost R6,5bn worth of property in SA last year – and not all of it in Cape Town or Johannesburg.
“The depreciation in the value of the rand over the past two years has definitely made SA property more attractive to those buyers with pounds, euros or dollars to spend,” says Lew Geffen, chairman of Sotheby’s International Realty in SA, “and our own figures show that foreign interest has continue to increase over the past six months, despite the mining strikes that have so badly affected the economy.”
Another factor that is increasingly playing a role in foreign buying, he says, is the steady growth in the number of high net worth individuals (HNWIs) around the world as the global economy recovers. “These individuals generally hold about 25 to 30% of their wealth in real estate and although most of this is in First World countries, an increasing number of them are looking to buy investment properties in developing parts of the world like SA that they view as likely to remain peaceful and offer good growth prospects.
“And in this regard, the fact that our General Elections in May went off without a major hitch and that we have had a consistent economic policy for the past few years definitely count in our favour at the moment.”
Foreigners buying more SA real estate
Many South African residential precincts' price growth way ahead of the national averages
Rawson - South Africa
Reading the many well-researched analyses of South African house price movements, it is possible to get the impression that this is an asset class without exciting potential – but that would be a mistake, says Mike van Alphen, National Manager of Rawson Finance, the Rawson Property Group’s bond origination division.
“The June Absa home sales breakdown, for example, reveals that average nominal annual house price growth over the last nine months was between 9% and 10%. The report then mentions, too, that headline consumer inflation is forecasted to stay above 6% for the rest of this year and that, with an anticipated interest rate hike of 50 basis points in September, the prime bank lending rate is likely to be 9,5%.”
It has to be realized that, the figures quoted by the national lending groups are national averages, said van Alphen.
“In almost all economic conditions, even the worst, there tend to be some high performing pockets where price growth remains stable and price growth is assured. Investment in these areas, obviously, is always highly satisfactory.”
Tshwane council official held over building plan bribe
IolProperty - South Africa
Some of the building plans that catapulted the Tshwane metro to the status of South Africa's building capital standings may have been approved fraudulently.
This is the implication of yesterday's arrest of a City of Tshwane building inspector suspected of accepting bribes from developers to approve plans for their developments.
The official - who cannot be named yet - is spending the weekend at the Silverton police station and will appear in the Specialised Commercial Crimes Court on Monday.
The arrest came barely a week after a survey conducted by Statistics South Africa showed the Tshwane metro recorded the highest value for building plans passed last year compared to any of the country's other five metropolitan municipalities.