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October House Price Indices
Absa - South Africa
House price growth improves, but set to remain relatively low
October 2012 saw the year-on-year growth in the average value of homes in the middle segment of the South African housing market improving further compared to September this year. Month-on-month price growth, however, is still on a steady declining trend, pointing to eventual subdued year-on-year price growth. These trends are according to the Absa house price indices, which are based on applications for mortgage finance received and approved by the bank in respect of small, medium-sized and large homes in the middle segment of the market (see explanatory notes).

The average value of middle-segment homes increased by a nominal 2,6% year-on-year (y/y) in October this year, after rising by a revised 1,5% y/y in September. The first ten months of the year saw house prices marginally down by 0,6% y/y, after significant price deflation evident in the small segment of the market for most of the year.

Real house price deflation continued up to September, with the momentum slowing down somewhat from August on the back of improved nominal price growth, but faster rising inflation. The headline consumer price inflation rate accelerated to 5,5% y/y in September on the back of upward pressure coming from food prices and transport costs. Consumer price inflation averaged 5,7% in the first nine months of 2012 compared with the same period last year.
House Price Indices - Oct 2012

Do your research on gated properties before you buy
Iol - South Africa
Do your homework thoroughly before you buy into secure gated estate living. If you don't, your lifestyle dream could turn out to be your worst nightmare. That's the advice to first-time estate buyers from Jeff Gilmour, President of the Association of Residential Communities (ARC).

"Homes in lifestyle estates generally come with price premiums that average 30 per cent compared with like-on-like properties on the 'outside'. "Therefore, mistakes can be that much more costly if you fail to carry out fundamental research on the estate itself before closing the deal on your home purchase," says Jeff.

His checklist for investing in a gated estate begins with the Home Owners' Association (HOA):

Student housing: An investment opportunity?
Moneyweb - South Africa
Long-term investors stand to benefit. JOHANNESBURG – Property developers, investors and parents are taking advantage of a massive backlog in student housing to enter what could potentially be a lucrative investment.

There also appears to be a growing trend in the number of private investors and parents climbing on the bandwagon by buying residential units to let out to an annually growing number of students signing up for tertiary education.

This is especially true in academic hubs like Potchefstroom in the North West province, Stellenbosch in the Western Cape and Grahamstown in the Eastern Cape.

Principal of Independent Property Consultants (IPC), Monika Gaybba, says in the past three or five years, Grahamstown has seen a plethora of student developments but these have slowed down considerably. This means, however, that the town now has a healthy supply of potential student housing investments.

Presentation by Dr Andrew Golding
Pam Golding - South Africa
Amid political uncertainty, Moody’s downgrade, talk of dramatically increasing Eskom tariffs, the mining tragedy and ongoing volatility and concerns regarding the manufacturing sector in general to name but a few, South Africa’s image overseas has been negatively impacted and investment into the country affected, not to mention the crisis in the Eurozone.

Within the prevailing sluggish economy, and with sentiment being a key driver of the property market, all these factors ultimately impact on activity in the marketplace. And while interest rates are at historic lows, consumers are burdened with a host of rising costs, including rates, electricity, fuel and food among others. A tribute to the resilience of our property market is that activity – certainly from a Pam Golding Properties perspective – is steady, with some areas seemingly recession-proof, such as Stellenbosch, Clifton, Camps Bay and Fourways. We are even seeing stock shortages in increasing numbers of areas around the country.

While somewhat subdued, the residential property market seems to have settled into a ‘new normal’. Below I highlight some components of this new normal as well as a surprising number of positives that currently make up our market.

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