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FNB House Price Index
FNB - South Africa Article
- Rapid strides towards the end of HOME LOANS price deflation -
The FNB House Price Index's year-on-year decline continued to diminish at a steady pace, and it looks likely that year-on-year price increase will resume in the next few months. The deflation rate for September was -4.4% year-on-year, significantly less than a revised August rate of -6.5%. At this rate, year-on-year deflation will probably be a thing of the past before year-end.

This diminishing price deflation trend is a strong sign that the positive impact of 500 basis points' worth of interest rate cuts since December 2008 is starting to be felt in terms of residential market performance.

It is becoming clearer that the recent months' diminishing price deflation is indeed the start of a trend back towards price inflation, following on an improving trend in demand and transaction volumes, which started earlier in 2009.

The improvement in the market to date has been very much due to interest rate cuts, which have improved the household sector's ability to service debt. However, there has been no real help from the economy, which remained in recession until very recently, exerting huge pressure on household disposable incomes.
FNB House Price Index

Standard Bank Residential Property Report
Standard Bank - South Africa
Standard Bank's property book for the first nine months of 2009 revealed an average monthly decline of 4.2% in the median house price. This brings the number of monthly declines to 16 consecutive months. The September smoothed data yielded a rate of contraction of 5.2% y/y, the same decline as in August. In real terms, using our estimate of the CPI in September to deflate nominal house prices, the decline in real house prices comes to approximately 11.5%. The smoothed growth rate for September shows that the value of the median residential properties financed by Standard Bank was R550 000.

Important drivers of overall growth in the economy, such as the level of household income and debt, as well as the medium-term economic and financial outlook, are such that a quick turnaround in the housing market is improbable. The most that we can hope for is for price declines to stabilise towards the end of the year as the recent interest rate cuts work their way through the economy and consumer and business sentiment improve.
Standard Bank Residential Property Report

UK Law Society Proposes Conveyancing Reform
e1buytoletmortgages - UK

The Law Society - a British organisation representing the interests of solicitors - has published a paper lately, which is called "Improving Residential Conveyancing" and which is aimed at the improvement of the process of selling and buying properties (conveyancing) that has not been revised since 1925 (the year the Home Information Pack Regulations were introduced).

However, if the paper is assessed critically, it becomes clear that the conveyancing reform, for which the Law Society is calling upon, is not supposed to benefit consumers.
Rather, it is aimed at securing the financial interest of UK solicitors, who might find themselves disadvantaged next year, when Tesco, Sainsbury, and the likes will be allowed to offer conveyancing services.

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