Weekly Property News
19 November, 2010

Dear Reader

Headlines: And who thought Christmas only comes once a year? The Reserve Bank’s Monetary Policy Committee (MPC) at their last meeting for 2010 announcement that the repo rate will be cut with 50 basis points (0,5%) giving South Africans a early Christmas gift. The repo rate now stands at a new record low of 5.5%. This means that the banking institution will lower their lending interest rate to 9,0%.

“The 0.5% repo rate cut announced today comes as no surprise to the Plexus Asset Management investment team. The South African economy is currently operating at a level quite far below trend output and, as such, this output gap requires expansionary monetary policy from the SARB to try and stimulate private sector consumption. It seems at this stage that, in the absence of strong inflationary pressures globally and domestically, and coupled with accommodative policy elsewhere in the developed world, there was sufficient room for the SARB to act. In fact they may have even been conservative as a decent case could have been made for a full 1% repo rate reduction. It is likely, in the absence of a sharply weakening Rand or nasty upside inflation surprises in the next seven weeks, that a further rate cut will be on the cards at the next MPC meeting.” Paul Stewart, managing director of Plexus Asset Management

“Even as the interest rate reached lows not seen in South Africa in decades, consumers continued to struggle with tight budgets and high debt in 2010. The property industry, although showing encouraging signs of improvement, remains constrained by the tight lending criteria of the banks and the affordability of property. This interest rate cut will indeed bring affordability into the reach of many more South Africans, which could provide a welcome boost to the property market.” Adrian Goslett, CEO RE/MAX of Southern Africa

"On a positive note it is apparent that the market is experiencing increased interest with a sound appetite for the acquisition of residential property. This additional reduction in the interest rate is expected to instill further confidence in the market at an opportune time when some are considering relocating for various reasons, including employment transfers in the new year," said Pam Golding Property CEO Andrew Golding.

Market news: South Africa's residential property market is continuing to experience a moderation in price increases, in line with the slower economic growth predicted for the overall economy in the third quarter, according to the October results released by ooba - South Africa's leading bond originator. The oobarometer price index showed the average house purchase price increased by 1.4% year-on-year to R832 705 in October 2010 from R820 885 a year ago. This is substantially slower than the double digit year on year growth recorded in three separate months during the first half of the year. Property price growth continues to slow

The editor

In This Issue
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Western Cape, Somerset West, Boskloof
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CyberProp Property Count: 19/11/2010

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Local News

What the interest rate cut means for your property

The SA Reserve Bank opted to cut the Repo rate by a further 50bps today to 5.50%. This was in-line with the market consensus, although on Bloomberg, a few analyst surveyed had expected no rate change (STANLIB was looking for rates to be cut by 50bps)...

An early gift for SA's consumers

The Reserve Bank’s Monetary Policy Committee (MPC) gave South Africans an early gift, cutting the repo rate by 50 basis points (0,5%) just weeks before Christmas at their final meeting for 2010...

Rate cut to boost property

Pam Golding Property group on Thursday welcomed the rate cut by the South African Reserve Bank, saying it will provide the property market with a positive confidence boost...

Now debt counselling gets a rescue plan

About 92 000 South Africans are more than three months behind in their home loan repayments and are in danger of losing their homes if they don't take action fast...

Property lagging other sectors in carbon disclosure

The property sector in South Africa was found to be lagging when it came to the measurement and disclosure of greenhouse gas emissions, as only two of the twelve JSE-listed real estate sector companies participated in the Carbon Disclosure Project 2010...

Property price growth continues to slow

South Africa's residential property market is continuing to experience a moderation in price increases, in line with the slower economic growth predicted for the overall economy in the third quarter, according to the October results released by ooba - South Africa's leading bond originator...

Office prices are 'boxing' up

Members of the Armoury Boxing Club, which occupies 384m2 of space in national heritage building, The Armoury, in the recently redeveloped Buchanan Square in Woodstock, can enjoy a panoramic view of Table Mountain and Signal Hill while working out...

It's ‘back to the city' now for many semigrants

Property sales show a trend of strong and growing demand in the metro areas, and slow or declining demand in many smaller centres...

Take a long view of property

The last few years have seen detailed property statistics, and comment on them, flood into the media at a pace never before experienced in South Africa, says Tony Clarke, MD of Rawson Properties...

Homes: Why less is more

Unless they focus on what they need, rather than on what they might want, homebuyers are quite likely to end up with too much house...

A bond can be withdrawn up the day of registration

When an application for a bond is granted (which in today’s market happens in only 50% of the cases), the applicant will assume that it is irrevocable – but this is not so, says Tony Clarke, MD of Rawson Properties...

Appetite for vacant land back on track

As development sites sell for R16.7M, a recurring question being asked in property circles is whether vacant land is still haunting investors and financial institutions, or has appetite returned?

Liberalisation of exchange controls

The recent long-awaited liberalisation of South African exchange controls has, said Bill Rawson, Chairman of Rawson Properties, led to a small flood of enquiries from the company's client base as to whether now might be a good time to diversify their property portfolios and buy one or two overseas properties...

Buy to rent market still strong

The latest FNB residential property survey indicates that the percentage of buyers who are buying to rent has dropped from a high 20 months ago of 15% to just above 5%. This suggests that the buy to rent market has fallen apart...

2 700 Joburg properties hijacked

The City of Joburg and the Gauteng Hawks are determined to crack down on building hijackers who are causing financial loss to both illegal tenants, the city council and building owners...

What you must know about your managing agent

One of the biggest growth areas in the real estate industry at the moment is the management of rental property on behalf of landlords – despite the fact that buy-to-let investments now only account for about 7% of property purchases, compared with about 25% in 2004...

IEASA, Western Cape - NQF4 not difficult to acquire

Some older and/or possibly less well educated estate agents have picked up the idea that the new NQF4 qualifications required of an estate agent, which will be compulsory by 2012, are extremely difficult to acquire and they are, therefore, planning to continue working in property only for as long as they can do so without qualifying, says Sandy Walsh, head of training at the Western Cape Institute of Estate Agents South Africa (IEASA)...

Focus On

Somerset West, Western Cape, South Africa

Cape Floral Heritage Site

Named after Sir Charles Somerset in 1819, this is a bustling commercial and residential town at the foot of the magnificent Hottentots Holland Mountain Range, still retaining its village atmosphere...

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In the Area

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

  • Cape West Coast
  • George
In the area 1 - Cape West Coast

The Cape West Coast: an idyllic leisure investment destination

The Cape West Coast is a region of contrast and beauty and is widely considered as an undiscovered gem with unspoilt beaches, mountain ranges and a rich geographical diversity...

In the area 2 - George

R28 billion Garden Route property development on hold

The global recession has forced a multi-billion-rand project for George, which was launched a year ago, to be put on hold...

To the editor

False promises

Dear Sir

I know after 16 years of democracy! The Mayor might claim he handed over title deeds in an historic event in Orlando East on May 2010, but this is not strictly true It is now seven months as Lease holder has submitted their document to the municipality nothing has happened. I have consulate law Society they advice me that the transfer takes not more than three month. You know if residents in Orlando had R1 for every promise that the ANC ward councilors in Joburg has made, they would probably be able to afford their own transfer of Lease Holders to Title deeds. They'd probably even have to make a loan to Joburg!

Another promise has passed, the perfect time to get title deed is within three weeks as per MMC Housing Cllr Mathang in a public meeting in Orlando East. This situation does not have to be like this. And then the ANC gets the money and wastes it. They don't spend it on service delivery. They don't put any extra into supplying houses. They spend it on road shows and talkshops(public meeting). They spend it on bonuses and hiring staff who sit around and do nothing.

Another opportunity has slipped by, but marks my words come January when the ANC want to pull the wool over these residents' eyes there will be lots of more promises and even some movement on provision of housing to residents in Soweto, and it will all stop once the election is over.

Yours sincerely,
Cllr Tsepo Mhlongo

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