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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
 
Please visit our website at www.prop-law.co.za for more details.
 
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
 
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

03 May 2012

Property market ticks up as supply and demand rebalance

Property market ticks up as supply and demand rebalance

The residential property market is showing tentative signs of a slow recovery despite activity levels still being significantly lower than during the previous house market boom in 2006 and 2007.

Mortgage originator ooba revealed yesterday that it had experienced significant growth in bond applications and approved home loans last month, with the value of its home loan approvals increasing by 49 percent year on year.

Saul Geffen, the chief executive of ooba, said this was the company's best performance since April 2008, but stressed it still represented only 34 percent of the value of approvals recorded by ooba in May 2007.

Geffen attributed these increases to a rise in buyer activity and easier access to finance, together with ooba's increased market share and the slow improvement in the domestic economy.

He said the Adcorp employment index revealed that about 108 000 jobs were created last month, the strongest growth witnessed since the 2009 recession. This compared with the 24 000 jobs created in February and 80 000 in January.

Geffen stressed that employment opportunities and job security played a big role in whether consumers could afford to apply for home loans.

Statistics from mortgage originator BetterBond also indicated that the market was improving and gaining momentum, with approvals rising in the past three months by about 20 percent year on year and the approval rates by the banks currently at about 50 percent and rising.

Bruce Swain, the managing director of the Leapfrog Property Group, said Absa in particular seemed to have a renewed appetite for home loan finance and had, for example, re-engaged with mortgage originators, which was bound to increase competition.

"Estate agents have willing and able buyers. Our market is much better than perceived. The dampener was to a large extent the availability of finance and things are improving in this sphere," he said.

First National Bank's (FNB) estate agent survey for the first quarter of this year revealed agents predominantly in the major metro regions were more positive because of an improvement both in demand and the balance between demand and supply or "pricing realism".

John Loos, a property and household sector strategist at FNB, said the residential demand activity indicator rose noticeably in the first quarter to 6.05 on a 10-point scale from 5.66 in the previous quarter.

He warned that some care should be taken with interpretations because the first quarter was generally a seasonally strong period.

However, Loos said South Africa did experience better economic growth late last year, which was supportive of employment and disposable income growth and, therefore, of residential purchasing power, and this may also have played a positive role.

Loos said the survey also suggested there was an improvement in the balance between demand and supply in the residential market, something that was driven by demand and by the availability of stock for sale. "This is mildly encouraging from a price performance point of view," he said.

However, Loos said survey respondents also pointed to financial pressure among households remaining high.

Estate agents estimated that 20 percent of sellers in the first quarter were selling to downscale due to financial pressure, which was lower than the 21 percent of the previous quarter.

On the other hand, Loos said the percentage of sellers selling to upgrade remained unchanged at 17 percent of total sellers in the first quarter.

He said these two reasons for selling were arguably the two most important indicators in the survey of the financial pressure and constraints on homeowners and the gap between the two had closed significantly since early-2009, despite the level of downscaling.

Business Report

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