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Absa 2010 Mortgage Advances
Absa - South Africa
The latest trends in household credit extension, including mortgage advances, are a reflection of the state of household finances and the consequent demand for credit, despite the fact that banks' lending rates are at a 30-year low. Labour market statistics published by Statistics South Africa indicated that employment dropped further in the 3rd quarter of the year, bringing the total number of job losses to 275 000 for the three quarters up to September. According to the National Credit Regulator, 47% of the 18,3 million credit-active consumers in South Africa had impaired credit records in the 2nd quarter of 2010, compared with 36,4% in the 2nd quarter of 2007. Consumers' ability and willingness to spend and take up credit will be influenced by economic growth; employment trends; income growth; interest rates; the level of debt; the National Credit Act; the state of their credit records; and banks' lending criteria.
Absa 2010 Mortgage Advances

FNB October Property Barometer
FNB - South Africa

The average house price growth slowdown continues, with the October FNB House Price Index recording a year-on-year inflation rate of 4.4%, lower than the previous month's revised 4.9%. This is the 5th successive month of decline since the May "mini-peak", but the pace of decline in the price growth trend was slower than preceding months. The average house price for October was R783,621.

Using deeds data of transactions by individuals (therefore not entirely comparable with the FNB House Price Index for which FNB data is utilised), we estimate the relative price performance by area value bands in the country's 6 major metros. In the 3rd quarter of 2010, we saw a superior average price increase for the so-called affordable areas (average price = R409,760) to the tune of 19.7% year-on-year. The 2nd best inflation rate of 12.5% was witnessed in the Middle Income Areas (average price = R713,768), followed by the High Income Areas (average price = R1.131m) with 11.3%, and lastly the "Top End" areas (average price = R1.915m) on 10.7%.

3 possible reasons for a better performance at the more affordable end of the market can be advanced. Firstly, this segment is arguably more credit-driven and thus interest rate sensitive, possibly benefiting more from the 2008-10 interest rate cuts. Secondly, the affordable segment specifically appears to have been less oversupplied in the boom years and, thirdly, financial pressure across the household sector has encouraged a certain group to seek more affordable homes.
FNB October House Price Index

The world's top performing property market
RealEstateWeb - South Africa

Plus Cape Town's new bark laws.

CAPE TOWN - Israel is known for its difficulties but when it comes to property, alls fair in love and war, and Israel, having seemingly sidestepped the worst of the recession, now enjoys the position of top performing real estate market in the world.

That is according to the Global Property Guide, a US trade magazine that monitors international housing markets. It reports that real estate in Israel has been the best performing for the last two years since the global housing crash in 2008. Israel's housing prices rose sixth-fastest among 36 countries in the second quarter of 2010 but after adjustments in the top five countries for economic crashes and rebounds, and reviewing the data for the past two years, Israeli real estate came out top.

Absa October 2010 House Price Index
Absa - South Africa
Lowest house price growth in twelve months
Price growth in the value of middle-segment homes for which Absa approved mortgage finance (see explanatory notes) continued to slow down up to October this year. The growth in the weighted average nominal value of small, medium and large houses came to only 1% year-on-year (y/y) in October, bringing the average price of a middle segment house to R1 005 800. Revised price growth of 3% y/y was registered in September. On a month-on-month basis the average nominal value of middle-segment homes declined further in October, but the pace of monthly contractions slowed down somewhat over the past three months.

In real terms the average value of homes in the middle segment of the market was down by 0,2% y/y in September this year (up 1,9% y/y in August), based on consumer price inflation tapering off to 3,2% y/y in September from 3,5% y/y in August. The September year-on-year drop in real price levels was the first since November last year, with prices declining in real terms on a month-on-month basis since May this year.
Absa October House Price Index

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