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FNB January House Price Index
FNB - South Africa
January was the third successive month of year-on-year increase in house prices after almost a year of decline. This reflects a modest start to 2010, but more importantly an improving trend. Little changes to our expectation that price inflation won't go further than single-digits, with a household sector still under significant financial pressure, and the belief that interest rates are at or near to the bottom.

The SARB Governor did hint at the possibility of interest rate reduction in the not too distant future, but given the "downward stickiness" of consumer price inflation, even were further reduction to happen it would be unlikely to be substantial. The consumer price inflation rate actually rose from 5.8% year-on-year to 6.3% in December, and even though it is expected to return to the 3%-6% target range, both the SARB and ourselves expect it to hug the upper end of the target band, limiting the scope for further interest rate cutting.

Nevertheless, the strengthening in the market is expected to continue until around mid-2010 at least, with the full impact of last year's interest rate cuts still to feed through, and supported by a moderately strengthening economy. It is, however, a mild recovery where primary residential buying is the dominant focus, a view that is supported by the above indices which report a stronger high income metro market compared with coastal holiday markets. In addition, the FNB Residential Property Barometer for the 4th quarter, released last week, continued to show little sign of buy-to-let buying increasing in importance relative to the overall market.
FNB - January House Price Index

Buyers, don't renege on contract!
Property24.com - South Africa
A cause for concern is the casual attitude an increasing number of homebuyers are exhibiting towards sale agreements or the suspensive conditions these contain - even though they can be sued for damages if they renege on these contracts.

So says Berry Everitt, CEO of the Chas Everitt International property group, who notes that all too often these days, buyers seem to believe that they can disregard the contact they have signed and walk away from the deal just because they "changed their minds".

Three property investment styles
RealEstateWeb - South Africa
How to get the best returns

Real estate is right up there as a favourite South African dinner table conversation. Following perhaps sport, crime and politics, our everyday people can spend hours discussing how they intend cashing in on World Cup home rentals or "who got what" when they sold their home.

In real estate investment circles, dinner table banter often focuses on which are the best investment opportunities. Fundamentally, the reason debate arises is because investors have different reasons for choosing property. One investor may speculate for quick profit, another may invest for longer term capital appreciation and yet another for income returns. If one puts these three investors with different investment philosophies around the table, things are bound to get very heated indeed!

Selling property as a 'going concern'
Property24.com - South Africa
The VAT Act makes VAT payable on the supply by a VAT vendor of goods supplied in the course and furtherance of any enterprise carried on by the vendor.

In the case of a property transaction, if the seller is a VAT vendor, and the sale is in the course and furtherance of the seller's enterprise, VAT will ordinarily be payable at the rate of 14%.

If, however, the property is sold as a going concern, the transaction will be "zero-rated", provided that:

Leser wat sommer enige advies glo, hou nou taks
Rapport - South Africa
In an article in Rapport of 31 January, "Raad met jou rande" it was inadvertently written that the window period for the amnesty under the amended paragraph 51 of the Eighth Schedule to the Income Tax Act, read with section 9(20) of the Transfer Duty Act. (Transferring a residence from a company or trust to a natural person) closes in February 2011, it is in fact 31 December 2011.
Rapport article

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