House Price Indices - April 2015
Absa - South Africa
Slowing trend in house price growth continues
The downward trend in the year-on-year growth in the average nominal value of middle-segment homes in the South African residential property market, which started in the fourth quarter of 2014, continued up to April this year. It is believed that economic conditions and factors related to household finances, such as economic growth, inflation, interest rates, consumer credit-risk profiles, confidence as well as the outlook for these variables, are currently some of the main driving factors of property market conditions and trends in house prices.
The slowdown in nominal year-on-year house price growth over the past six months was also affected by a declining trend in month-on-month price growth since early 2014. With nominal house price growth trending down, real price inflation also tapered off, despite the relatively low inflation rate of 4,1% y/y in the first quarter of the year.
Nominal house price growth came to 5,7% year-on-year (y/y) in April 2015, declining further from a revised 6,7% y/y in March, after touching on 10% y/y in August to October last year. On a monthly basis, prices deflated marginally by a nominal 0,1% in April.
House Price Indices Apr 2015
Protect your investment with a proper lease
Trafalgar - South Africa
If you’re the owner of any kind of residential property that is being rented out to someone else, you need a proper written lease to protect your interests as well as those of your tenant.
“Whether you have a garden cottage to let, a house at the coast or a high-end, fully-furnished apartment, a clear and detailed lease agreement is your best defence against misunderstandings and disputes with unreliable tenants that could result in you losing your investment,” says Andrew Schaefer, MD of leading national property management company Trafalgar.
“And in terms of the pending amendments to the Rental Housing Act, every lease agreement will soon have to be in writing in any case. Verbal agreements or ‘handshake arrangements’ will no longer be valid in any respect.”
Protect with a proper lease
Repeat buyers give real estate a big vote of confidence
BetterLife - South Africa
The household income required to buy the average home has increased by less than 2% in the past 24 months, despite the fact that the average home price has risen by more than 17%.
According to the latest statistics from BetterLife Home Loans, SA’s leading mortgage origination group, the difference has been accounted for by homebuyers putting down bigger cash deposits, and by a 16% increase in the average approved bond size, from R672 000 two years ago to R782 000 in the 12 months to end-April.
“And both these adjustments,” says BetterLife CEO Shaun Rademeyer, “indicate households that are in much better financial shape than they were in 2013, with less debt and more discretionary income available to cover bigger monthly mortgage instalments.”
What is more, the figures show that repeat buyers now account for some 53% of new home loan applications compared to 46% two years ago, and that many of them are upgrading to more expensive properties, he says.
Title deed plan gets Wiese's help
IolProperty - South Africa
Christo Wiese, who led a $1 billion (R12bn) takeover last month, says he was also focused on helping millions of South Africans make a more modest purchase: The R1 850 they need to secure the title to the land on which they live.
Wiese, South Africa's fourth-richest man with a personal fortune of R84bn according to the Bloomberg Billionaires index, says that more than two decades after the country's first democratic elections millions of South Africa's citizens have no legal right to their dwellings.
"The terrible irony is that after 21 years of postapartheid rule not a heck of a lot has been done in this respect," the 73-year-old said last week.
"I'm hoping that we can get to the objective of having every house being entitled. Be it a modest shack or a little home in a township."
Five ways to shorten the home loan application process
BetterLife - South Africa
Good preparation is the key to success in most endeavours – and home loan applications are no exception, says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator.
Although you can expect your mortgage originator to ask you lots of questions, he says, you can make the process easier and faster if you have the following information and documents ready:
Your credit record
You are entitled to a free credit report every year and it is a good idea to get yours and check it well before you think of applying for a home loan, because you may need some time to clean it up. It is definitely worth doing this and improving your credit rating, as that will usually not only improve your chances of being approved for a home loan, but also of securing a better interest rate – and that can save you many thousands of rands over the life of the loan. In addition, you need to remember not to apply for any new credit until your home loan application is approved and your new home is transferred into your name.
Five ways to shorten