Property Barometer - House Price Index
South Africa - FNB
FNB HOUSE PRICE INDEX 2017 TO DATE
8 months into this year, it still appears increasingly likely that 2017 will represent the 3rd consecutive year of slowing average annual house price growth, and the 2nd consecutive year of house price decline in consumer inflation-adjusted real terms.
For the period January to August 2017, the average year-on-year growth rate in the FNB House Price Index was 3%. This is in line with our 3% average price growth forecast for the entire 2017. It is lower than the revised 4.9% recorded for 2016, and well down on the post-2008/9 recession high of 7% reached in 2014.
In real terms (CPI inflation-adjusted), the average year-on-year rate of decline was -3.1% for the period January to July 2017, a weakening from the -1.3% average rate of decline for 2016 as a whole.
FNB Property Barometer
Historical debt saga: What happens next?
South Africa - HomeTimes
It was always an insane situation and it was always going to be challenged legally, but it took years for the courts to eventually rule that homeowners couldn’t be held responsible for historical debt.
South African homeowners undoubtedly breathed a collective sigh of relief when the Constitutional Court ruled that municipalities couldn’t withhold services or sell a new owner’s home in an effort to get them to settle debt which had been run up by previous owners.
The logical thing for municipalities to have done when they were owed money would have been to force the person who ran up the debt in the first place to pay. However, because of municipalities’ mistaken belief that the debt was owed by the property and not by the owner, there was no onus on it to do its job and track down the person who had actually defaulted on the payments. It was simpler and often more effective to target the current owner – and let’s be honest here, most would pay up if a municipality cut off essential services until the debt was settled.
HomeTimes
Price properties correctly to mitigate rental lag
South Africa - Pam Golding
It’s common knowledge that house prices in the Cape remain strong, with the metro being the country’s top performing property market in terms of price inflation, but are these trends being reflected in our rental prices? Pam Golding Properties area manager for Western Seaboard, Emarie Campbell, says rental prices in many areas are falling short of market trends, creating a perilous ‘rental lag’ that could have long-term repercussions for investors and the property market.
“Property prices have increased by 75% in Blouberg in the past five years, but we are not seeing the same escalation in our rentals. This needs to be remedied or else we will fall into a trap where these properties no longer yield a realistic return on investment,” explains Campbell. The knock-on effect of disparate rental rates is that tenants are loathe to move or buy their own properties, because of the comparative affordability of renting. A two-bedroom Blouberg beachfront property of R2.65 million can bring in a rental income of R14 000 a month, or R1 500 a day in-season.
Pam Golding
Most Cape Town properties have right to second dwelling
South Africa - Lew Geffen Sothebys
Recent changes to Cape Town municipal bylaws give individual land owners the right to unlock the value in their land. Lara Colananni, Specialist Conveyancing Attorney at Guthrie Colananni Attorneys, says: "The City of Cape Town's Municipal bylaw was recently amended to create an automatic right to build a second dwelling on almost all properties in Cape Town, even if the zoning is single residential, rural or agricultural.
"The beauty of the amendment is that it creates opportunities to unlock value in almost every property in the Cape without going through the tedious process, costs and stress of obtaining a departure from Council to erect a second dwelling on your property.
"The value is unlocked by selling the second dwelling or the rights to construct a second dwelling on the property and this can be done by subdivision or by opening a sectional title scheme on your property."
Subdivision
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