House price indices - January 2015
Absa - South Africa
Steady middle-segment house price growth continues in early 2015
January 2015 saw year-on-year (y/y) growth in the average nominal value of middle-segment homes in the South African residential property market remaining relatively stable from late last year. Nominal house price growth of 9,5% y/y was registered in January, slightly down from 9,7% y/y and 9,8% y/y recorded in December and November respectively. Real price growth, i.e. after adjustment for the effect of consumer price inflation, is showing signs of picking up on the back of inflation trending down. These price trends 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, medium-sized and large homes (see explanatory notes).
The continued above-inflation growth in house prices is regarded as a relative good performance against the background of persistent challenging economic conditions and low confidence levels. However, largely normalised demand and supply conditions in the residential property market are believed to be a major supporting factor to price growth.
HPI Jan 2015
What you need to know about renting residential property
IolProperty - South Africa
Tenants who rent residential property through an estate agent are not automatically entitled to receive the interest that accrues on their deposit, so you should carefully check what the lease states about who will receive the interest before you sign the contract.
The situation is different if you rent directly from the owner of the property. If you are required to pay a deposit, the landlord must ensure that interest is paid on the deposit (see "Renting directly from an owner", right). When the lease expires, the landlord must refund the deposit, plus the accrued interest, to you, unless he or she is entitled to use the deposit and interest to offset amounts you owe, including the "reasonable" cost of repairing damage to the dwelling while you occupied it.
However, whether you rent directly from the owner or through an estate agent, the refund of your deposit - let alone the payment of any interest - is directly linked to the inspections of the property before you take occupation and when you move out, as well as your obligation to return the dwelling in "a good state of repair", save for "fair wear and tear" (see "Rental deposits and property inspections: what the law says").
The Rental Housing Act of 1999 governs the letting of residential property in South Africa. It includes sections on how deposits must be managed and the conditions under which landlords may use deposits to cover tenants' liabilities.
IolProperty
Housing Review - 1st Quarter 2015
Absa - South Africa
The property market
The residential property market is set to continue reflecting trends in economic growth, employment and household income, property running costs and living costs in general, interest rates, consumers’ credit-risk profiles, banks’ risk appetite and lending criteria and consumer confidence. These factors are to largely drive the affordability and accessibility of housing and mortgage finance, which are expected to be reflected in trends in property demand and supply conditions, residential building activity, property prices, indicators of market activity, buying patterns, transaction volumes, the demand for mortgage finance and home loan repayment patterns.
Single-digit nominal house price growth is expected to continue in 2015 and in 2016 against the background of the outlook for major economic and household sectorrelated factors (see above), although base effects may cause price growth to be somewhat lower over the forecast period compared with 2013 and 2014 when price growth of 10% and 9,3% respectively was recorded. Based on current expectations regarding nominal house price growth and consumer price inflation, continued real price inflation is projected for this year and next year, after real price growth was recorded in both 2013 and 2014.
Growth in outstanding household mortgage balances, which remained low at just above 2% y/y up to the end of 2014, may improve somewhat this year on the back of abovementioned expected trends in the economy and household finances, which may also lead to an improvement in consumer confidence from its relatively low level of the past three years.
Economic trends, household finances and consumer and building confidence are important factors driving residential building activity and the demand for and supply of new housing, along with trends in the secondary housing market, changing lifestyles, the availability of serviced development land and building costs. The planning phase of building activity for new housing has rebounded strongly in 2014, which is expected to be reflected in the construction phase over the next 12 to 18 months. However, not all housing that are planned are eventually built, mainly as a result of various factors that may have a constraining impact, such as the availability and approval of municipal services, the availability and accessibility of finance and building confidence.
Housing Review 2015 Q1
Leave a comment: