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31 August 2017

Property Barometer
South Africa - FNB
Western Cape...Strong, Booming or Bubbling

Compared with the pre-2008 National Housing Bubble, the Western Cape of recent time is seen as “strong”, but not “booming” or “Bubbly” in appearance.

How is the “health” of the Western Cape housing market in terms of being aligned to the region’s economic fundamentals?

We compare the Western Cape housing market of the past few years with the pre-2008 national housing “bubble”, and find the region to be “strong” by recent national standards but not characterized by any credit-driven “speculative or over-exuberant” spending spree.

Rather, the region’s recent strength has been driven to a significant degree by housing demand from external sources, including foreigner buying in the region but more significantly “semi-grant” buying by South African repeat buyers from other provinces.
FNB-Property-Barometer

Potential disruptors to the commercial property market
South Africa - Rawson
“Disruptors in the real estate market may be described as new developments, trends or technologies which alter the way business is done and understood in the existing market,” says Leon Breytenbach, National Manager of the Rawson Property Group’s commercial division. Breytenbach discusses a few of these disruptions in order to better understand their workings and how they may be capitalised upon. The commercial property market has undergone some great changes in the past, and there could be major changes in the pipeline due to the occurrence of constant technological advancement.

Change in distribution and logistics
As online shopping drastically increased in popularity, customers expect faster execution of their orders, even same day delivery in many instances. Some retail properties may look to evolve to dual functioning entities which receive consumers in person as well as managing on-line orders and deliveries. This may, in some cases, require a smaller visible retail presence but increase the need for more localised warehousing in order to speed up the delivery process. “Owners of suitable industrial spaces may potentially benefit as they redesign their properties to facilitate this new market,” Breytenbach suggests.
Rawson

Durban considers blocking sale of indebted properties
South Africa - IolProperty
The eThekwini municipality is mooting interdicting the sale of properties in cases where there is debt owing now that historical municipal debt can no longer be passed on to the new property owner.

Briefing members of the executive committee on the implications of Tuesday's watershed Constitutional Court ruling, the deputy head of the city's legal unit, Malusi Mhlongo, said the city would make amendments to its credit and debt collection policies.

He said this would be to ensure that conveyancers acknowledged debt each time they transferred a property that had municipal debt owing.

Mhlongo said this would be among steps taken "to ensure that we are protected
IolProperty

Credit and mortgage advances
South Africa - Absa
Continued low growth in household credit and mortgage balances

Outstanding credit balances in the South African household sector increased by 3,3% year-on-year (y/y) to a level of R1 514,8 billion in the seven months up to the end of July 2017 on the back of trends in secured and unsecured credit balances.

Household secured credit balances (R1 163,9 billion and 76,8 % of total credit balances) increased by 3,1 % y/y up to the end of July, up from 2,5% y/y at end-June. This year-on-year growth in secured credit balances was the result of ongoing relatively low growth in household mortgage balances (see below), with instalment sales balances (21,6% of total household secured balances and largely related to vehicle finance) rising by 3,9% y/y in the 7-month period up to end-July.

Unsecured credit balances in the household sector (R350,9 billion and 23,2% of total credit balances) increased 4,1 % y/y in the period January to July this year. General loans and advances balances (58,9% of total unsecured credit balances and largely consisting of personal loans and micro finance) showed growth of 4,8 % y/y up to the end of July.
Credit and mortgage advances (Jul 2017)

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