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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.

19 September 2013

Home ownership declines as household debt climbs

Home ownership declines as household debt climbs

Home rentals have performed strongly with 25 percent of households now opting to rent despite South Africans still favouring home ownership.

The highest proportion of citizens who have opted to rent reside in Gauteng, with 37 percent living in rented accommodation, according to the latest Standard Bank residential property report.

The Free State leads in the home ownership stakes, with just under two-thirds of households living in homes under various stages of ownership.

Sibusiso Gumbi, a research strategist at Standard Bank, said yesterday that the high levels of household debt and consequent inability to obtain home loans perhaps meant people were battling to purchase their own properties.

But Gumbi said this was not the only reason and there was a higher demand for rental property in Gauteng because of the inward migration.

The report said Gauteng experienced a net inward migration of more than 1 million people between 2001 and 2011 and had the highest population density in the country of about 675 people per square kilometre.

This was many times higher than every other province and much higher than the national average density of 43 people per square kilometre.

It said this largely informed not only building volumes but building types, with more flats and townhouses and higherdensity construction being undertaken in Gauteng.

'Just under half of all flats and townhouses countrywide were built in Gauteng between 2001 and 2011,' it said.

The report said this supply response might be adequately addressing the corresponding demand, coinciding with tame house price appreciation in the sectional title market and muted flat rental inflation.

It said that the most recent national rental inflation came in at 4.9 percent, with rental inflation for townhouses posting the strongest growth at just under 6 percent.

The Western Cape and KwaZulu-Natal had in recent times jostled each other for first place in terms of the highest rental inflation of the larger provinces but Gauteng, the 'rental capital', mustered up rental inflation of 4.6 percent year on year in July.

It appeared that building activity in the province was keeping rental inflation in check while anecdotally it had been reported that landlords might be tempering their rental escalations to avert pushing under-pressure tenants 'over the edge' into default, it said.

Steven Barker, the head of home loans at Standard Bank, attributed the moderate growth in mortgage advances to liquidity not being as easily available in the industry.

He said some home loan players had shown negative growth and Standard Bank's home loan book was growing slower in terms of historical standards even though it was gaining market share. He said new regulations, such as the Basel 3 liquidity requirements, meant loans that financial institutions held on their balance sheets for a long time would become more expensive.

Barker added that the shortterm response to the planned credit amnesty in South Africa was that financial institutions would have to look at the creditgranting process carefully, which might increase prices.

He believed more competition was coming into the mortgage environment this year but stressed that when banks were uncertain, they also became more conservative.

Standard Bank believes consumer creditworthiness challenges and the diminished capacity of consumers to take on large amounts of debt because of elevated pre-existing debt balances were likely to cap house price improvements at single-digit percentages for the remainder of this year.

Business Report

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