Affordable housing finance – the safe bet for lower defaults
Moneyweb - South Africa
FNB defaults in lower-income housing repayments at all time low.
Pretoria: Developers may start building lower cost housing units now that they see the government’s Finance-Linked Individual Subsidy Programme (FLISP) is working. FLISP is an instrument to assist qualifying households by providing a once-off down payment to those who have secured mortgage finance to acquire a residential property for the first time. Depending on the income level a qualifying beneficiary will qualify for a subsidy of between R10 000 to R87 000 for a property to be financed to the tune of and not exceeding R300 000 purchase price.
According to Marius Marais, CEO of FNB Housing Finance, there are very few housing units available for under R300 000, all inclusive of cost. He said now that developers have seen that the money is available through FLISP, they might deliver some of these units quickly by adapting the specifications of their existing pipeline of planned developments.
In the different income segments, those households earning less than R3 500 per month is covered by the social net of government, offering RDP houses to these households. Marais calls this the first layer. The second layer is where affordable housing and the finance thereof comes into play, where households earn an annual income of up to R307 600 (about R25 000 per month) – the gap market as it is below the level where banks traditionally offered mortgage finance. But inside that second layer, there is still a segment that is struggling to get access to housing finance and is not covered by either the government’s social programme or players in affordable housing finance. This is where household income is up to about R6 000 per month. Too much to qualify for an RDP house, too little to access finance – the gap in the gap market.
June House Price Indices
Absa - South Africa
Middle-segment house price growth slowed down from a year ago
Nominal year-on-year growth in the average value of homes in the middle segment of the South African housing market slowed down in June 2013 from May. Base effects and subdued monthon- month price growth are having a moderating effect on 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 middle-segment small, medium-sized and large homes (see explanatory notes).
Price growth in middle-segment housing was recorded at a nominal 11,8% year-on-year (y/y) in June from a revised growth rate of 12,2% y/y in May this year. The first six months of 2013 saw the average value of middle-segment homes rising by 11,2% y/y. The declining trend in year-onyear price growth continued in the categories of small and medium-sized housing, with monthon- month price changes remaining under pressure. Price growth in the segment for large homes appears to be near an upper turning point. Real price growth in middle-segment housing, i.e. after adjustment for the effect of consumer price inflation, came to 5,3% y/y in May on the back of an inflation rate of 5,6% y/y in the month.
Absa House Price Indices June 2013
What happens if there's an interdict on a property for sale?
IEASA Western Cape - South Africa
The Institute of Estate Agents, Western Cape, is often called in to assist when buyers, sellers and estate agents experience problems and they, in turn, says Annette Evans, regional manager of the Institute, will enlist the help of specialists in that particular field to answer any questions or deal with queries.
One query in particular that has come up recently, said Evans, is whether an estate agent is responsible for checking whether the seller's property has any interdicts over it.
With the crash of the property market very recently the above question has become more and more relevant, says Storme Heath, a director at C & A Friedlander Attorneys who often sponsor training sessions and events held by the Institute.'All around us we see boards affixed to the gates of properties, alerting us to an upcoming auction to be held on these properties. It seems that properties in a broad spectrum, from Salt River to upper end Constantia homes, have been affected by the fall in the economy,' she said.
Soaring costs of Durban's billing system
IolProperty - South Africa
Durban's new billing system continues to cost ratepayers an inordinate amount with it now emerging that an IT consultancy is being paid R650 000 a month by the eThekwini Municipality to oversee its implementation.
To date, the incomplete Revenue Management System has cost Durban ratepayers about R505 million to develop, far more than the cost estimates of between R90m and R150m approved by council in 2004.
Municipal spokesman Thabo Mofokeng confirmed that the project manager, IT Advisory, was being paid R650 000 a month as of January 1 this year for the next two years to oversee the implementation of the project.
Councillors were initially sold on the idea of an in-house billing system by then city manager Michael Sutcliffe, and were convinced that no commercially available product met eThekwini's requirements. Another advantage was that in-house development would negate the need to pay annual licence fees.
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