Absa Homeloan Sentiment Index
South Africa - Absa
Sentiment Index Findings
Despite the abovementioned economic and household sector-related trends, consumers were in general still largely positive about the residential property market during the course of 2016, with levels of sentiment improving up to the third quarter of last year, according to the Homeowner Sentiment Index. A total of 83% of consumers surveyed in the third quarter had a positive perception regarding property market conditions.
However, as economic conditions gradually deteriorated during the course of last year, consumers experienced further financial pressure, which caused confidence in general as well as sentiment regarding the property market to decline towards year-end and into 2017, as measured by the Bureau for Economic Research’s Consumer Confidence Index and the Absa Homeowner Sentiment Index. By end-2016 the HSI was slightly lower, with 81% of respondents who were still positive about property market conditions at the time.
Based on the April 2017 survey, the overall HSI score dropped to 75% in the wake of developments in the run-up to and after the country credit downgrades announced by S&P and Fitch in the first week of that month. The second-quarter survey results show that property market-related sentiment has largely stabilised with an HSI score of 74%, despite the widely expected lowering of the country’s credit rating by Moody’s in early June. Although most respondents were in the latest survey still confident that property is a secure asset, there were concerns regarding factors such as the state of the economy, politics and the impact of the country’s junk status. These developments brought the first and second-quarter HSI scores back to a level that were much in line with that of the first quarter of 2016.
Absa HSI Aug 2017
NHBRC faces criticism
South Africa - IolProperty
It started out as most things do: with the very best of intentions and with the hallmarks of making a real difference.
A national building association would be set up to protect housing consumers from unscrupulous and inept builders and the "bakkie brigade" by professionalising the industry and making registration a legal requirement.
In 1998, the National Home Builders Registration Council was established by the Housing Consumers Protection Measures Act, requiring builders to be accredited to ensure best building practice. The council would test builders to determine competency, train those that weren't and conduct professional inspections, at various stages, to protect both consumer and builder.
Consumers who wanted to build new homes would have to register their homes with the council, pay a percentage of the value of their homes over as "insurance" and only use NHBRC-approved builders. Banks would be legally cajoled into scheme by insisting on NHBRC registration before granting bonds.
Credit and mortgage advances
South Africa - Absa
Low growth in household credit and mortgage balances in the first half of 2017, with home loan repayments showing homeowner financial strain
The value of outstanding credit balances in the South African household sector showed growth of 2,9% year-on-year (y/y) to a level of R1 510,6 billion in the first half of 2017. This was the combined result of trends in household secured and unsecured credit balances over this period.
Secured credit balances in the household sector (R1 159,4 billion and 76,7 % of total household credit balances) increased by 2,5 % y/y up to the end of June this year, marginally up from 2,3% y/y at end-May, but down from 3,8 % y/y at the end of June last year. The low year-on-year growth in secured credit balances came on the back of ongoing low growth in household mortgage balances (see below), while instalment sales balances (21,6% of total household secured balances and mainly related to vehicle finance) showed growth of only 0,4% y/y in the 6-month period up to end-June 2017.
Household unsecured credit balances (R351,4 billion and 23,3% of total household credit balances) increased 4,2% y/y in the period January to June this year. The component of general loans and advances (58,6% of total household unsecured credit balances and largely consisting of personal loans and micro finance) increased by 4,8 % y/y over the 6-month period up to the end of June.
Credit and mortgage advances
What to do when you can't afford your bond repayments
South Africa - Rawson
Despite our best efforts, we all hit bumps in the road at times and financial ups and downs can’t always be predicted. So what happens when, as a homeowner, you find yourself under unexpected financial strain and your monthly bond repayments suddenly become more than you canhandle?
“This kind of situation happens all the time,” says Tony Clarke, Managing Director of the Rawson Property Group. “As hard as banks try to ensure that bond holders will be able to meet their repayments, people get retrenched, they have unexpected medical expenses, the interest rates rise – there are all kinds of things that can affect financial circumstances that nobody canpredict. Luckily,” he continues, “because it’s so common, there are procedures in place specifically designed to help bond holders out when they do find themselves in financial trouble.”
As in any recovery process, the first step, according to Clarke, is to admit that you have a problem – and to do it as early on as possible. “Don’t wait until you’ve underpaid or missed your first repayment,” he advises. “Keep an eye on your finances, and as soon as things look like they might get rocky, start making plans to minimise the damage. These things don’t go away on their own, so you can’t just hide your head in the sand and hope for the best.”