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Transfer duty cuts on cards
Fin24.co.za - South Africa
The transfer duty on property is expected to be cut further when Finance Minister Trevor Manuel unveils the 2007/2008 National Budget on February 21, managing executive of ABSA Home Loans, Gavin Opperman, said in a statement on Monday.

"From a property market point of view, the Budget has become increasingly important in recent years, as transfer duty on property has been reduced for the five successive years up to the 2006/07 Budget," the statement said.

These adjustments resulted in the maximum value of a property exempted from transfer duty being increased from R70 000 in 2001/02 to R500 000 in 2006/07.

SA property - opinion
Business Day - South Africa
A recent article in the Financial Mail by Pauline Larsen says global investors on the prowl for untapped property investment opportunities are starting to discover South Africa. Classic Business Day gets independent property economist François Viruly on the line for his opinion.

GIULIETTA TALEVI: The South African listed property sector has been the top performer over the past three years in the Ernst & Young 2006 Global Real Estate Investment Trust Report, where South Africa returned around 34%, and in the past year South Africa racked up returns of 23% that were only outstripped by New Zealand. François, can these returns be sustained? I believe you're slightly sceptical that the great returns we've seen from the listed property sector can actually continue into the future…

FRANÇOIS VIRULY: The point to bear in mind first of all is that when we make international comparisons in South Africa we start with a long bond rate of about 8% so that's the first point to bear in mind. The second point to bear in mind is returns have been in the twenties and so on, but one has to bear in mind that in many emerging countries like China for example the sector performed at around 140%. So I think there is a lot of competition out there, and we will have to really push those returns upwards if we are going to compete with emerging countries. One also should bear in mind that much of the listed sector is sitting at yields of 7% or 6% at the moment, which means that we are going to have to show very significant capital growth if we are going to repeat the returns we've had in the past.
Business Day

Understanding the estate agent's code of conduct
Buzzz Magazine - South Africa
This is the eighth in a series in understanding the Code of Conduct. We continue with Section 5 - "Duty not to make misrepresentations or false statements or to use harmful marketing techniques".

No estate agent shall -

5.1 in his capacity as an estate agent publish or cause to be published any advertisement which could create the impression that it was published by the owner, seller or lessor of immovable property, or by a prospective purchaser or lessee of immovable property;

his clause advises that an estate agent must clearly indicate in all advertisements that he/she is in fact an estate agent.
Buzzz Magazine

Crouch before the leap
Financial Mail - South Africa
A shortage of development land, construction skills and materials combined with relentless growth of the black middle class mean that house prices and rents will grow for at least the next five years.

This is despite a slowing US house market, the effects of which have yet to be felt; the danger of risk aversion spreading among investors; and lower commodity prices which could drag down SA's economy.

Standard, ABSA and FNB property economists all believe that high local interest rates will be the only real influence in a slowdown of property price growth by the end of 2007, to between 6% and 12% above 2006 prices.
Financial Mail

Can you afford the average house?
Moneyweb.co.za - South Africa
Not if you're earning under R30k a month, apparently.
If you're not earning at least R30 000 a month, the "average" house is out of your reach, at least according to a back-of-a-matchbox calculation.

On Wednesday ABSA released its quarterly residential property market report, which found that the average house price is about R811 000. This is for the so-called middle segment of the residential property market (houses of 80m²-400m² and priced at up to R2,7m).

FNB provides a home loan affordability calculator on its website. If one enters a gross monthly income of R30 000, a repayment term of 20 years and the prime interest rate, the calculator returns a maximum home loan of R793 000 and a repayment amount of R9 000 per month (excluding insurance and administration fees).

Quotas for low-cost housing won't help, warns Sapoa
Business Report - South Africa
Pretoria - The SA Property Owners' Association (Sapoa) is unconvinced that the low-cost housing crisis in South Africa will be resolved by a legislated percentage quota for affordable housing in all developments.
Chief executive Neil Gopal confirmed this yesterday, adding that Sapoa was happy that the government had moved away from the "blanket" 20% quota it had previously proposed. "It's more the carrot than the stick approach."

Intensive discussions had taken place between Sapoa and the housing ministry. "What we'd like to see is a more consensus-based approach…I can't give you the formula because that will depend on what the local authorities and developers decide for every development."
Business Report

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