'Voetstoots' and the Consumer Protection Act
IolProperty - South Africa
Since the Consumer Protection Act 68 of 2008 (CPA) came into operation there has been much interest on the position of the voetstoots clause in relation to the CPA.
The general view is that one would no longer be able to include a voetstoots provision in contracts if the transaction falls within the protection of the CPA. A 'transaction' in terms of the CPA refers to agreements concluded in the ordinary course of business by a supplier and a consumer. For example, a property company in the business of buying and selling property may not include a voetstoots clause in its sale agreements when disposing of such properties.
However, where a company, not engaged in the business of buying and selling property chooses to acquire a property for one of its employees for instance, it may nevertheless include a voetstoots clause when disposing of the property, as the disposal is not in the seller's ordinary course of business.
65% of home owners are bond free
Homebid - South Africa
There are 6.1 million formal homes in South Africa and 65% do not have a mortgage bond according to Homebid, the low commission estate agency. These fortunate homeowners will be less affected by the looming interest rate hikes over the next 18 months as they have no bond repayments to make.
Property economist Neville Berkowitz, advisor to Homebid says "Over 3.5 million freehold single residential homes, 300 000 sectional title properties and over 120 000 homes in estates are not bonded and these home owners will be less directly affected as interest rates rise."
Homebid has researched Deeds Office registrations and obtained further information from the Census 2011, ABSA, Lightstone, and the Centre for Affordable Housing Finance for Africa to compile this research.
The bulk of the 65% home owners who are bond free come from two market segments -government subsides homeowners and empty nesters.
65 Percent are bond free
Absa survey reveals the need for pre-application consultation by home mortgage loan applicants
Rawson - South Africa
The recently published ABSA Home Owner Insights Survey has, says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, confirmed what he and his team members have regularly advocated, i.e. that the majority of home buyers should seek the guidance of an experienced mortgage bond originator such as Rawson Finance prior to entering the market in search of a new home.
“I would go so far as to say that those who go ahead with hunting for a home without first consulting a bond originator or a bank are setting themselves up for severe disappointments, considerable extra stress and much loss of time,” said van Alphen.
“The survey, which, as is usual with ABSA,” added van Alphen, “was very comprehensively carried out, revealed that 37% of buyers have to reassess their choices on account of having initially aimed too high above what they could afford. This would not have happened if at an early stage they had consulted with a bond originator rather leaving it to later when they may well have looked at and grown interested in a number of properties.”
Residential Building Statistics
Absa - South Africa
Divergent growth trends in residential building activity at segment level
Based on data published by Statistics South Africa, building activity in the South African market for new private sector-financed housing (see explanatory notes) has not performed particularly well in the first five months of 2015 compared with the same period last year. The planning phase, as reflected by the number of building plans approved by local government institutions, contracted somewhat up to May, whereas the construction phase, i.e. housing reported as being completed, showed some single-digit growth over the same period. There are, however, divergent trends at segment level that influenced the year-on-year growth in both the planning and construction phases.
The number of new housing units for which building plans were approved was marginally down by less than 1% year-on-year (y/y) to almost 23 700 units in January to May this year. This was the net result of growth of just below 4% y/y in the segments for houses larger than 80m² and flats and townhouses, whereas the segment for houses smaller than 80m² showed a contraction of 8,6% y/y in the number of plans approved.
Building stats May 2015