Cape holds its own in slow property market
IolProperty - South Africa
The Western Cape's residential property market is holding its own despite reports of growth nationwide being slowed by inflation, say property experts. Nedbank economist Busisiwe Radebe said mortgages accounted for about 40 percent of credit extended nationally, although the growth in the number of home loans taken during the second half of last year had been low. "Not a lot of people are taking out loans.?
Radebe said mortgage growth had been negatively affected by stricter lending criteria by financial institutions, lower consumer confidence due to unemployment, higher interest rates and the expectation that inflation will further erode incomes.
She said house price inflation would be limited as a result. "If there are fewer people wanting mortgage loans there might be more stock of properties for sale which could limit increases in house prices. There will be a lot of stock and less people to buy."
Residential building statistics
Absa - South Africa
Low single-digit growth in residential building activity up to late 2015
Building activity with regard to new private sector-financed housing in South Africa (see explanatory notes) recorded relatively low single-digit growth in the first eleven months of 2015 compared with the corresponding period in 2014, based on data published by Statistics South Africa.
The number of new housing units for which building plans were approved increased by 4% year-on-year (y/y) to a total of just more than 55 600 in the eleven months to November last year. This growth performance was largely driven by the segment for houses less than 80m², which recorded growth of almost 13% y/y over this period, whereas the segments of houses larger than 80m² and flats and townhouses experienced some marginal contractions up to November.
The number of new housing units constructed increased by 5,2% y/y from January to November last year, with a total of more than 36 300 units built over the 11-month period. This growth was the result of an improvement of 7,9% y/y, or 1 879 units, in new houses constructed of smaller and larger than 80m² to a combined total of 25 797 units compared with 23 918 house built in the corresponding 11-month period of 2014. The number of new flats and townhouses built was marginally lower by 0,7% y/y in January to November.
The average cost of new housing built increased by 6% y/y to an average of R6 148 per square metre in the eleven months to November.
Building costs per square metre were as follows in the various segments of housing in January to November last year:
- Houses of <80m²: R3 912, up by 9,1% y/y.
- Houses of ≥80m²: R6 352, up by 3,9% y/y.
- Flats and townhouses: R7 111, up by 10,2% y/y.
Shakeup in conveyancing with more tech startups
LawGazette - UK
Conveyancing startup When You Move became the latest entrant to the e-conveyancing market last week when founders Peter Goodman and Simon Bath obtained an alternative business structure licence from conveyancing regulator the CLC.
The firm’s announcement describes it as ‘the UK’s first technology-led conveyancing service aimed at revolutionising the process of buying and selling property’.
The announcement states that When You Move’s proprietary cloud software platform and mobile app will give estate agents, brokers and consumers ‘full visibility of conveyancing status in real time’.
1st Time and Age group home buying
FNB - South Africa
In short, the FNB Estate Agent Survey continues to paint a good picture in terms of 1st time buying levels when expressed as a percentage of total home buying. It is, however, important to look at absolute levels along with percentages to complete the overall picture. It is difficult to accurately identify true 1st time buyers from Deeds data, but one can group buyers according to age. What we glean from this is that the average age of buyers became noticeably older following the end of the pre-2008 residential price boom. After the price boom, affordability was far more of a challenge for many young buyers compared with before the boom. The result in many cases would be aspirant 1st time buyers having to wait for a few years longer to buy than may have previously been the case, hence a likely older average age of 1st time buyer.
And then, it is also important to understand that overall individuals’ transaction volumes remain relatively low compared to the boom years and even to levels just before that. So, while the estimated 1st time buyer percentage is comparable with that back around 2004 at the height of the property boom, the absolute number of 1st time buyers would probably be nowhere near as high.
The past few years have no doubt been better for 1st time buyers than was the recession period of 2008/9. But affordability remains a challenge, and that is probably reflected in a considerably older average age of home buyer today.
On the positive side, when agents estimate a significant percentage of 1st time buyers to be suffering from “buyer panic”, it really isn’t that large in absolute number terms. By-and-large the market remains a “rational” one..