FNB - South Africa
Western Cape my finally be starting to run lower on price growth steam
Examining the FNB House Price Indices for the country’s major regions, slowing price growth in the country’s recent star performing region, the Western Cape, has begun to emerge. The 4th quarter 2016 year-on-year average house price growth of 8% for the Western Cape remains a strong one, and still far above the other major regions, but has slowed for 3 consecutive quarters from a 10-year high of 10.6% reached in the 1st quarter of 2016.
It is likely that, after a recent period of very strong house price growth in the Western Cape, a mounting affordability challenge in the region, especially for aspirant 1st time buyers, has started to put some brakes on demand growth. Since the beginning of 2010 (the start of the post-2008/9 recession recovery), the average house price for the Western Cape has risen cumulatively by 76.6%. By comparison, the next strongest growth was in KZN, with a far more moderate 45.3% and Gauteng with 41.3% over the same period.
The Western Cape has benefited from a period of strong confidence in the region’s long term economic prospects, and has attracted a very strong net inward migration of repeat home buyers from other provinces on recent years.
However, ultimately affordability has to play a role, and perhaps this is becoming evident when we examine our FNB Estate Agent Survey results to observe a low level of 1st time buying in the region.
FNB Property barometer
Cape Town's planning by-laws require caution
IolProperty - South Africa
The latest revision of Cape Town's Municipal Planning By-law has as many permutations as a Rubik's cube, and signing an offer to purchase can be a very costly mistake if you haven't done your homework.
Owning property in Cape Town is a dream for many, but if you're not well-versed in the city's stringent planning and zoning by-laws which are more complex in areas where there are overlay zonings like a declared heritage protection area, or scenic drives or certain historic special controls including Llandudno, Constantia, Clifton, Strand, Gordon's Bay, Harfield Village, St James, Boyes Drive, and parts of the CBD.
Heritage plays a significant role in determining how a property can be altered and as a rule of thumb, all structures older than 60 years are protected in terms of the National Heritage Resources Act.
Residential building statistics
Absa - South Africa
Continued subdued residential building activity up to late 2016
Building activity with regard to new private sector-financed housing in South Africa (see explanatory notes) remained much subdued in the first eleven months of 2016 compared with the corresponding period in 2015, based on data published by Statistics South Africa.
The number of new housing units for which building plans were approved, was down by 8,5% year-on-year (y/y), or 4 756 units, to 51 137 units in the period January to November last year from the same period a year ago. The drop in building plans approved in the 11-month period was mainly the result of a decline of 25,5%, or 5 514 units, in the planning of new houses of less than 80m². Plans approved for houses larger than 80m² contracted by 6,7% y/y, or 1 062 units, in January to November, whereas the flat and townhouse segment recorded growth of 9,9% y/y, or 1 820 units, over the same period.
The volume of new housing units built showed relatively low growth of only 1,1% y/y in the 11-month period up November last year, with only the segment for flats and townhouses registering some noticeable growth of 9,5% y/y, or about 1 000 units, over this period. The two segments of houses, however, both contracted on a year-on-year basis in terms of the number of units built up to November.
Residential building stats Nov 2016