Weekly Property News
03 February 2012

Dear Reader

"It already appears that parts of the eurozone have fallen into recession - how wide it will spread and how severe it will be remains uncertain." This was said by Johann Els, economist at Old Mutual Investment Group SA after the International Monetary Fund this week announced a sharp cut in its forecast for South African economic growth for 2012. They forecast of 3,6% that was made in September last year has now come down to 2,5%. On the other hand the director of Ernst & Young Africa Business Centre, Michael Lalor was more optimistic stating that if the basic fundamentals in the economy remained sound a growth rate close to 5% can be on the table for next year.

The same goes for the property industry. There are those that predicts a bad year in the property industry for 2012 and there are those that no matter what is said stays positive.

Despite mild improvement in year-on-year growth for January, FNB still expects further real house price decline. The January 2012 FNB House Price Index showed a slight acceleration entering the new year, rising from a revised year-on-year growth rate of 4.7 percent in December to 5.6 percent in January. This was the highest year-on-year growth since August 2010. Real house prices to fall more

House prices, in real terms, i.e. after adjustment for the effect of inflation, are set to deflate further in 2012, based on expected low nominal price growth and headline consumer price inflation to remain above the 6 percent level according to Absa Home Loans. Nominal price growth in the middle segment of the housing market was expected to remain relatively low in 2012 after coming in at 2.2 percent in 2011. Prices to fall more - Absa

In the latest issue of the Rode Report on the South African property market, Erwin Rode, CEO of Rode & Associates, said real house prices — excluding inflation — were still 25% higher than suggested by their trend line of the past 44 years. SA property prices 25% ‘overvalued

Residential property agencies this week scorned comments by economist Erwin Rode that house prices were still 25 percent overvalued and a downward adjustment in real house prices was inevitable. Seeff chairman Samuel Seeff said Rode's view was one-dimensional and sent the wrong message to ordinary buyers. Property price remarks misleading - agents

The assertion that SA home prices are likely to fall another 25% in real terms over the next few years should not go unchallenged. So says Rudi Botha, CEO of SA’s leading mortgage originator, BetterBond, who notes: “For this to happen, there would either have to be a very large differential between nominal house price growth and the rate of inflation for the next few years, or a very long period of no real growth, neither of which seems likely at this time.” House prediction off the mark says Botha

The editor

In This Issue

Featherbrooke Estate, Krugersdorp
Bedrooms 4 | Bathrooms 3
Notes: Next to Botanical Garden, in Cul de Sac, Lovely view!

CyberProp Property Count: 03/02/2012

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Local News

Real house prices to fall more

Despite mild improvement in year-on-year growth for January, FNB still expects further real house price decline...

Prices to fall more - Absa

House prices, in real terms, i.e. after adjustment for the effect of inflation, are set to deflate further in 2012, based on expected low nominal price growth and headline consumer price inflation to remain above the 6 percent level according to Absa Home Loans...

SA property prices 25% ‘overvalued’

South African house prices are cheaper than ever — and have some way to fall, says report by property economist...

House prediction off the mark says Botha

The assertion that SA home prices are likely to fall another 25% in real terms over the next few years should not go unchallenged...

Minimal house price growth predicted for 2012

With predictions on how the residential property market will perform in 2012 coming off South Africa's press almost daily, it was interesting hear from Dianne Brock, General Manager of the Western Cape branch of the Institute of Estate Agents of South Africa, that, despite a marked upturn of sales in November, early December and early January, she predicts "absolutely no fireworks for the foreseeable future"...

Mortgages not viable - SAIRR

About 83 percent of the nearly 14-million households in the country do not earn enough to qualify for bank housing loans, according to the latest SA Survey, published by the South African Institute of Race Relations (SAIRR) last week...

Equilibrium in property market is around the corner

Commenting on the latest FNB property barometer, Sean McCauley, a Rawson Properties director, has added his voice to those of many spokespeople in the property sector who have welcomed the Monetary Policy Committee’s decision to leave SA’s repo rate unchanged (at 5,5%)...

Selling distressed property 'important for South African market recovery'

Quickening the process of selling distressed real estate assets in South Africa is vital if the country's property market is to recover...

Distressed properties in 2012

Economic conditions around the globe have remained depressed, and as such, consumers the world over are still battling to control their levels of debt and adjust to the financial demands of the increased cost of living...

Demand strong at lower end of market

Estate agents countrywide are now saying that the recovery in the residential property market is being initiated by increased sales at the lower end of the market, especially in what is known as “affordable” housing...

Hot demand for affordable family homes

Affordability will remain the name of the game during 2012, says Mark Brickles, Broker/Owner of RE/MAX Ultra Select, which operates in regions Grassy Park, Strandfontein, Zeekoevlei, Muizenberg, Ottery, Lansdowne, Rondebosch East, Plumstead and surrounding areas...

If you go into the Joburg 'woods' today, are you in for a big surprise?

Not really; although JLL suggests a cautiously optimistic improvement is in sight...

Honest payers sometimes penalised when inefficient bodies corporate fall behind in payments

The latest Gunstons Attorneys online newsletter (which says the firm’s senior director, Grant Gunston, is proving surprisingly popular), contains an article headed “When the lights go out, even though you paid your account”...

7 deadly sins of property investment

Purchasing an investment property can be an intimidating and often risky business, but it is also a way to have a future free of financial worry for those who can master it, says Adrian Goslett, CEO of RE/MAX of Southern Africa...

How to be a successful landlord

Owning rental property has long been regarded as one of the best ways to safeguard a long-term investment and achieve a decent return, but current conditions in the property market mean that landlords now really have to “work smarter” to come out ahead...

Focus On

Krugersdorp, Gauteng, South Africa

Krugersdorp owes it's origin to two important events in the history of South Africa,namely The Transvaal War of independence (1881) and the discovery of the Witwatersrand Goldfields (1886)...

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>> Properties in Gauteng

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In the Area

The areas we are going to take a closer look at this week are;

  • Cape Town
  • Durban
  • Moot
In the area 1 - Cape Town

Thanks to its beautiful beaches, great restaurants, friendly communities and wide choice of properties, Cape Town has just been voted one of the 10 best places in the world to live in a survey conducted by the UK Telegraph and Sotheby’s International Realty...

In the area 2 - Durban

Durban heritage property in illegal alteration row

A listed heritage building on Durban's Berea is under threat of losing its historic status as neighbours accuse the city of dragging its feet in enforcing municipal bylaws to prevent illegal renovations and business operations at the premises...

In the area 3 - Moot

Moot market ‘exciting’ says new franchisee

Top performing estate agent Antoinette Hoeksema has decided the time is right to open her own business, so has acquired the RealNet franchise for the Moot East area of Pretoria...

To the editor

Share your comments with us by sending it to news@cyberprop.com

Local news continue

Insurance Assurance

With 2012 back in full swing, many homeowners will be looking at their finances for the year ahead and considering renewing or changing their current home insurance policies, says Adrian Goslett, CEO of RE/MAX of Southern Africa...

Business rescue procedures and leases

The ‘business rescue procedure’ now made possible by the Companies Act for ‘financially distressed’ companies is likely to be used with increasing frequency in the next year or two, says Garth Watson, a director of Gunstons Attorneys...

Double commission claims

The publicity given recently to the danger (for the seller of a property) of finding himself having to pay double commissions is timeous and much needed, says Anton du Plessis, CEO of Vineyard Estates...

Buyers sometimes not prepared for costs involved in a property transaction

Quite frequently, says Ulrik Strandvik, a director of Gunstons Attorneys, inexperienced homebuyers are ignorant about the total costs involved in a property transaction or – if they are aware of them – they may not realise when such payments become due...

Johannesburg commercial property market overview for q4 2011

Global professional property services firm Jones Lang LaSalle today released its Q4 2011 Research Report on the state of Johannesburg’s office and industrial real estate market...

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