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Mortgage and household credit
FNB - South Africa
We view the pedestrian growth in household sector credit in a positive light at present, due to SA's currently high household debt-to-disposable income ratio, which keeps the household sector vulnerable to any external shocks. We believe a significantly lower debt ratio is required, given a very high risk of a global double-dip recession, and the resultant threat that such unwanted economic events can pose to household cash flows.

The current growth rate in household sector credit probably remains slow enough to allow for further decline in the debt-to disposable income ratio (78.4% in Q1 of 2010) for the time being, given some recent recovery in nominal disposable income growth. But any slide in economic growth in the near term (and GDP growth has indeed begun to slow) would probably stall the declining trend in the debt ratio, keeping the household sector and the residential property in their fragile state.
FNB July Mortgage and household credit

July Mortgage Advances
ABSA - South Africa
Uptick in mortgage advances growth in July
According to data released by the South African Reserve Bank, the total value of outstanding mortgage balances at monetary institutions, which includes both commercial and residential mortgage loans, increased by 4% year-on-year (y/y) to R1 028,5 billion in July 2010. Year-on-year growth of 3,4% was recorded in June. Outstanding mortgage balances were R5,1 billion, or 0,5%, higher in July compared with June.

Against the background of these developments, the Reserve Bank's Monetary Policy Committee (MPC) is expected to cut the repurchase (repo) rate by another 50 basis points to 6% at next week's meeting. Commercial banks' lending rates to the public, i.e. prime and variable mortgage rates, may also be lowered by 50 basis points, to a level of 9,5%, if the MPC cuts the repo rate as expected
ABSA July Mortgage Advances

FNB Property Barometer - August 2010
FNB - South Africa
The reality is, therefore, that our housing market starts its slowdown off a very weak base. It may still be in a better position than the US Housing Market at present, because unlike the US, where interest rates are almost zero, the SARB does have ammunition in store to cushion the blow of a global economic slowdown.

However, a disappointing US economic performance, the very real risk of a double-dip, and all the while our own weak domestic housing fundamentals, have led us to a downward revision of
our house price growth forecast, and we "pencil in" some renewed decline in the FNB House Price Index in 2011 after an average projected growth rate of +6.4% in 2010.

As yet, there isn't reason to believe that the decline need to be extreme, such as was the case in the US during the last slump, with that country's national house price deflation rate bottoming at near to -19%, because the likelihood of some renewed SARB interest rate cutting in September can provide some support. But it is the unfortunate reality that SA is an open economy, highly exposed to global economic events, and the magnitude of the housing market slowdown does very much depend on the magnitude of the global slowdown.
FNB Property Barometer

Demolishing buildings: a quick history
RealEstateWeb - South Africa
South Africa is in the record books...

CAPE TOWN - Watching Cape Town's Athlone Towers' premature detonation and the hype surrounding the event I thought it worthwhile to investigate the history of imploding buildings and explosive demolition in general.

It is generally agreed that black powder was the first true "explosive", developed around the 13th century. Its first recorded use appears to be in the early 1600s when Hungarians used it for rock blasting, followed by the English in the tin mines and the Swiss using it for road construction.

One of the first attempts to bring a building down using explosives was the good old disgruntled Englishman, Guy Fawkes, whose famous attempt to blow up the British Parliament failed but is still celebrated today every November 5.

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