FNB February 2010 Building Stats
FNB - South Africa
OUTLOOK
We are of the belief that one will only see noticeable improvement in building completions of residential property during the 2nd half of the year, and that this will be a moderate recovery at best. Despite over a year’s worth of residential demand increase, as a result or interest rate cuts last year, oversupplies have not fully been absorbed, and stressed sellers of existing properties are still abundant.
On the commercial property side, we have not yet seen a turn in the rising vacancy rate trend, either in industrial property or office space. This is arguably why building plans passed numbers in the commercial segment still look worse than completions (unlike residential where plans passed rates of decline have diminished somewhat), running at -53.7% year-on year for office space, -31.1% for retail space, and -25.8% in the industrial space segment.
The commercial segment would thus seem to lag residential, and the turn for the better may be delayed until 2011.
FNB February 2010 Building Stats
Recovery in house prices above inflation - Ooba
RealEstateWeb - South Africa
The oobarometer price index recorded a year-on-year nominal price increase of 9.7%.
The latest statistics released by ooba, South Africa's leading bond origination company, reveal that the recovery in house prices continued year-on-year in March with above inflation growth.
The oobarometer price index recorded a year-on-year nominal price increase of 9.7% to R850 864 from R775 559, a slight deceleration from the 11.4% year-on-year price growth recorded in February.
According to ooba CEO, Saul Geffen, while there are supply side risks, the improving economic fundamentals, rising levels of activity, along with the surprise cut in interest rates announced in March, should help to sustain the momentum we have already witnessed. "The interest rate cut is also good news for current homeowners still under pressure from the difficult economic environment," Says Geffen.
RealEstateWeb
Market rentals showing impact of tougher economic times
Rode Review - South Africa
The effect of the economic downturn on market rentals has now become strikingly evident.
According to the latest Rode’s Report on the SA Property Market, in the fourth quarter of 2009 the overall growth in market rentals for office space was weak. This was especially evident in Cape Town (-6%) and Johannesburg (-4%) decentralized, where rentals were, on average, lower than what they were a year ago. But, this comes as no surprise in light of the faster northward march of prime-office vacancies in these two decentralized regions.
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