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Pieter Prinsloo Hyprop CEO
July 20, 2017

Hyprop Investments subsidiary acquires flagship shopping centre in Sofia, Bulgaria

in Africa, International Property News
UK-based Hystead Limited (Hystead), co-owned by Hyprop Investments Limited (Hyprop) and PDI Investment Holdings Limited (PDI), today announced the Euro 156 million acquisition by its subsidiary Balkan Retail NV of all the shares in Bulgarian company AP Retail I EOOD (AP Retail), which owns The Mall…
Andrew Golding Pam Golding
July 20, 2017

Encouraging news for home buyers - repo rate now 6.75%

in Office, Retail, Industrial, Hotels and Residential
Home buyers and those with mortgages will be encouraged by today’s announcement by the Monetary Policy Committee of a 25 basis point reduction in the repo rate, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
Arnold Shapiro Trematon
July 20, 2017

Trematon Capital Investments diversifies portfolio with investment in UK Real Estate Private Equity Market

in Africa, International Property News
JSE listed Trematon Capital Investments Limited, the Western Cape focused actively managed Investment Holding Company, today announced that it has invested in the UK real estate market via ASK Partners (ASK), a boutique real estate private equity start up, based in London.
Lesetja Kganyago SARB Governor
Jul 20, 2017

Reserve bank reduces repo rate by 25 basis points to 6.75%

The Reserve Bank’s Monetary Policy Committee (MPC) on Thursday reduced the repo rate by 25 basis points to 6.75%.
Izak PetersonDipula
Jul 19, 2017

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Stuart Chait Chairman of Land Equity Group Med
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The evolution of Cape Town’s skyscrapers

Lofty, proud and soaring, the first skyscraper buildings in Cape Town were built more than 40 years ago.
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Jul 18, 2017

Growthpoint Properties breaks ground on R600 million prime office development in…

Leading SA REIT Growthpoint Properties has commenced its multi-million Rand development of a new head office for…
John LoosFNB
Jul 18, 2017

The FNB Holiday Town House Price Index continues its recent slowing growth trend

The FNB Holiday Towns House Price Index, comprising towns (both coastal and inland) whose housing markets are deemed to…

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Dairybelle properties sold to Giant Sweets for R66 million

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Company Profile

Rates Watch

Rates Watch (Pty) Ltd was established in 2008 with the main purpose of monitoring and watching municipal valuations and property taxes. The services offered to the individual property owners are:1. Valuation audits;2. Valuation appeals;3. Valuation…

Property Leader

Chris_Smith

Chris Smith

Dr Chris Smith is a consultant medical microbiologist based at Cambridge University, a visiting professor at Murdoch University, Perth Australia, and the managing director of the Naked Scientists, a science, medicine and technology-focused radio show, podcast…
Monday, 29 October 2012 10:08

Why a recovering US property market bodes well for SA

Written by eProp Commercial Property News
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The United States has long held sway over the global economy and as such its welfare has had far reaching implications for the rest of the world. Cue the sub-prime mortgage crisis in 2007 which effectively crashed the US housing market, and of which the effects are still very much in evidence, particularly in America and parts of Europe.

Bruce Swain"Due to the US's incredible economic power we've often noticed that the local property market tends to lag between three to six months behind the American market", says Bruce Swain, MD of Leapfrog Property Group. As such local estate agents and buyers are inclined to keep an eye on developments in the US. "Of course South Africa is a different kettle of fish and one would be foolish to assume all movements in the US market will be mirrored in ours but, it does often give one an indication of what could be headed our way", says Swain.

Even earlier in 2012 many still doubted as to when the US real estate market would begin recovering. Now it would seem that revival is in sight; JP Morgan & Co and Wells Fargo & Co, the principal home lenders in the States report double-digit quarterly earnings growth last week. According to Sterne Agee, a banking analyst from Todd Hargeman as reported in the LA Times, both companies "clearly expressed a view of signs of recovery, if not stabilization".
The "Improving Markets Index" as compiled by the National Association of Home Builders and First American Title Insurance indicates that a 103 housing markets across the US now qualify to be listed, up from 76 in January 2012. Barry Rutenberg, chairman of the National Association of Home Builders (NAHB), believes that; ""This is an encouraging sign that the housing recovery is proceeding at a steady pace as firming prices and employment help spur new building activity, which in turn generates new jobs and more home sales."

Whilst improving markets are still a far cry from stable or even better, growing markets, it is the first sign that the American housing market is recovering. Broadly speaking any recovery in the States is bound to filter through to the rest of the world, which should eventually lead to rallying of exports from SA to Europe and other economic corrections. These corrections will hopefully lead to more job creation, increased earnings and ultimately, the amelioration of the local property market.

That being said, there are local factors that have a greater, and more immediate, effect on the SA industry such as the recent wild cat strikes and the tragedy that took place at Marikana, the staggering level of unemployment and the downgrading of our sovereign debt. These circumstances shake investor confidence, decreases international funding, threaten our exports and ultimately culminate in an impoverished economy.

Factors that contribute more directly to the property market include the lack of household savings, the high level of household debt-to-disposable income ratio, the increase of municipal rates and the difficulty of obtaining a home loan.

Bruce Swain believes that the South African Reserve Bank has done what it can to aid the property market by keeping the repo rate at a low 5%. According to John Loos, Household Sector and Property Strategist at FNB, the greatest problem the market now faces is the lack of household savings. At present the household debt-to-disposable income ratio stands at 76.3% (an increase over the first two quarters of 2012). Loos states that: "This savings shortage is a serious structural issue not only constraining the housing market but also many people's ability to retire financially sound."

Combined with the fact that banks' lending criteria are now considerably more stringent than four or five years ago the reality is that many potential buyers cannot amass the deposit needed to secure a loan.

Of course saving isn't the only problem. Municipal rates and tariffs have increased: Loos points out that where the average house price/average remuneration ratio fell by -24.4% since 2008, the rates and tariffs/remuneration has increased by 6.54%. Savings are less and properties are costing more to maintain – hardly a recipe for a sound property market.

That being said, the local property market is still stable, if sluggish, and there are slight indications that it's picking up. Yes, South Africans need to start saving there's no doubt but, our market didn't take the hit many of its international siblings did and with the stable repo rate and banks easing their lending criteria somewhat there is hope. Sellers are still placing their homes in the market and the buyers are there. "Remember, regardless of the current global and national economic situation, property is a long term game and the industry will correct itself in time. Patience is key during this period", advises Swain.

Last modified on Wednesday, 14 May 2014 19:32

Listed Property, REIT, Real Estate Funds

Izak PetersonDipula

Hedged debt, low gearing and offshore exposure make REITS well-placed to weather SA’s current economic and political volatility

July 19, 2017 Listed Property, REIT, Real Estate Funds eProperty News
Downgrading to junk status and ongoing political tomfoolery might make South African investors a little anxious about protecting their investment portfolios against the market volatility resulting from the uncertainty created by the current environment.

Office, Retail, Industrial, Hotels and Residential

Andrew Golding Pam Golding

Encouraging news for home buyers - repo rate now 6.75%

July 20, 2017 Office, Retail, Industrial, Hotels and Residential eProperty News
Home buyers and those with mortgages will be encouraged by today’s announcement by the Monetary Policy Committee of a 25 basis point reduction in the repo rate, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

Green Building and Sustainability

Thulani Kuzwayo

Green Building Council South Africa's public sector head appointed Regional Chair of WorldGBC's Africa Regional Network

July 13, 2017 Green Building and Sustainability eProperty News
Thulani Kuzwayo, public sector managing executive of the Green Building Council South Africa (GBCSA) has been appointed Regional Chair of the Africa Regional Network – a group of Green Building Councils working to advance green building within the region.

Commercial Property Auctions

Dairy Belle CT Aerial

Dairybelle properties sold to Giant Sweets for R66 million

June 29, 2017 Commercial Property Auctions eProperty News
Following the liquidation order of Dairybelle, two Epping properties belonging to the company went under the hammer recently for R66 million. Giant Sweets was the successful bidder.

Africa, International Property News

Pieter Prinsloo Hyprop CEO

Hyprop Investments subsidiary acquires flagship shopping centre in Sofia, Bulgaria

July 20, 2017 Africa, International Property News eProperty News
UK-based Hystead Limited (Hystead), co-owned by Hyprop Investments Limited (Hyprop) and PDI Investment Holdings Limited (PDI), today announced the Euro 156 million acquisition by its subsidiary Balkan Retail NV of all the shares in Bulgarian company AP Retail…

Construction, Energy and infrastructure

Sandton Gate4

Abland and Tiber Bonvec Construction join forces to develop Sandton Gate

July 13, 2017 Construction, Energy and Infrastructure eProperty News
Companies and residential buyers who are looking for a prominent but convenient address, quality office premises or state-of-the-art apartments that still offer good value for money, need look no further than Sandton Gate.

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