South African House Prices Drop Most Since 1986
South African house prices fell an annual 2.7 percent last month, the steepest decline since November 1986, as a possible recession in the continent’s biggest economy damped demand, said Absa Group Ltd.
The average nominal house price dropped to 941,600 rand ($111,195), the Johannesburg-based lender said in an e-mailed report today. Prices fell 0.4 percent in the month.
Prices in Dubai reaching bottom
The property market in Dubai has undergone a substantial drop in the last few months offering excellent investment possibilities, according to the latest research. Read the rest of this entry »
Light at the End of the Tunnel for Struggling Home Owners
House prices in South Africa decreased significantly and high interest rates are causing a lot of home owners to suffer financially; some even face losing their family homes.
But from this dilemma a solution arise. The ‘Sell and Rent back’ scheme allows struggling South African home owners to sell their homes to financially capable companies for cash and the company then agree to renting the same property to the home owner after the sale.
Interest Rate Cut
Reserve Bank Governor Tito Mboweni announced a 50 basis point cut in interest rates, bringing the repo rate to 11,5%, and prime to 15%.
Mboweni acknowledged that inflation has improved, and that consumer price inflation should fall back within the target range by the first quarter of 2009. He added that global developments, such as the financial crisis and American recession, have contributed greatly to the downward inflation picture.
Credit extension growth has moderated, indicating that the higher rates and tightening credit standards have done their work.
However, he emphasised that risks remain, and must be monitored closely. “The rand is the single biggest upside risk to inflation,” he said. Nevertheless, he said that the South African economy is unlikely to go into recession.
Home Loans – The Qualifying Criteria
South African banks are compelled to conform to the National Credit Act and tighten their policies to weather the global economic downturn. To ensure their long term sustainability as well as the financial well being of their clients, banks must operate as responsible money lenders by tightening up their lending criteria.
The NCA compels the banks to ensure that their mortgage clients do not over extend their credit limit. Prior to the NCA the only criteria that the banks were compelled to meet was that the bond repayments were not to exceed 30% of the applicant’s proven dependable income. The new act makes the banks legally responsible for checking the applicant’s full credit situation. Clients will be required to declare their income as well as their expenses when applying for a bond. Read the rest of this entry »
House prices still not improving
The future of the property market is still very negative. Absa predicts that house prices will drop by almost 7 percent in 2008 and that this trend will continue into 2009 where they anticipate a further 4.5 percent decrease.
A senior property analyst at Absa Home Loans, Jacques du Toit said that the first half of 2009 still holds no prospects for the property market.
House prices still going down
FNB’s House Price Index showed an average deflation for November. It decreased 0.2 percent for the month, but according to the experts it was expected and it does not indicate a crisis.
The index reflex the average value of housing transactions financed by FNB, and according to this November house prices averaged at R743 712, this figure is lower than the previous year when the average house price was R744 935, and house prices also increased by 11,8 percent.
Read the rest of this entry »
South African property market predicted to recover in the next three years
Sales in South Africa’s property market have slowly stopped, but do not worry, experts anticipate a healthy recovery of the real market with an increase of over 50% over the next three years.
According to the latest report from Chas Everitt international, if you find yourself in the fortunate position of being able to invest long term in the property market, the following three months will offer you good properties at give-away prices that will easily sell in the future.
Read the rest of this entry »
First-time property buyers struggle to get into the real market
Jawits Properties’ chief executive officer, Herschel Jawits, says banks and other factors are preventing first time house buyers, below the R1 million level, from entering the property market. But he also adds that the market almost appears to have reached the bottom.
The decrease in property affordability due to the high interest rates has had the smallest amount of impact on the decline in property sales, which is approximately 35% less in 2008 than 2007.
Township housing market outperforms suburbs
The South African property market is declining, but through all this, the township property market is performing better than its suburban equivalent.
The annual FNB Township Property Barometer showed a decline during the third trimester of 2008 (rated on a scale of 1 to 10) in Gauteng townships from 5,73 in 2007 to 4,84. Cape Town and Durban Townships also showed a decreased activity level, but it was still higher than the suburban barometer reading of 4,31 in August 2008.