The information in this article is courtesy of iAfrica (Urgent MPC Meeting called – 18 March 2009)
Tito Mboweni, governor of the South African central bank, announced yesterday that the Monetary Policy Committee would meet on 23 and 24 March and then again on 29 and 30 April. These new dates are in line with market expectations and differ from the previously scheduled meeting of 15 and 16 April.
These new dates were probably set due to the deteriorating economic picture and job losses. More meetings will also follow in May and June, before a break in July.
According to Mboweni’s statement the MPC of the South Africa Reserve Bank will from now onwards meet on the new March and April dates as well as 27,28 May, 21,22 September, 16,17 November and 16,17 December. The fixed dates of 24 and 25 June stays as does the fixed date of 12 and 13 August and 21 and 22 October.
In the past, the MPC would meet every two months, so the new schedule is a clear indication of the need for urgent rate cuts. This also means that January and July the only month that will not see a meeting.
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Thursday, March 19, 2009
Monday, March 16, 2009
Popular Tourist Destination Affected by Credit Crunch
The information in this article is courtesy of IOL News (Crunch Turns Waterfront Into Sore Eye – 14 March 2009)
Tenants at the popular V&A Waterfront in Cape Town are having trouble keeping up with the increasing rent, and on top of this, the credit crunch is making it harder for shop owners to do business. Even visitors are complaining that the centre of this popular tourist destination is looking shabby and in need of maintenance.
Thus far, two shops have closed their doors and one tenant was evicted for failing to pay rental arrears. One tenant believes that there is not a single tenant that is not affected, and at this rate management might lose some important anchor tenants.
The property was bought by London and Regional and Dubai World for a staggering R7.3 billion back in 2006. Recently, several new developments at the Waterfront have been put on hold.
According to a shop owner, South Africans are spending a lot less and even though there were tourists, it is not near as much as previous years.
According to spokesperson, Maureen Thompson, rentals at the Waterfront were not way above market related prices and new tenants had already signed up for empty shops. She added that the developments on hold are a result of the global recession.
A concerned South African, now living in the UK, said he was appalled by the state of the Waterfront on a recent visit. According to him litter was floating on the water and he was worried that the historic Clock Tower was used by a restaurant for serving food.
Thompson raised the issue with the harbour master and he urged the owner of Emily’s restaurant to make an alternative plan.
Buy Roodepoort Property
Tenants at the popular V&A Waterfront in Cape Town are having trouble keeping up with the increasing rent, and on top of this, the credit crunch is making it harder for shop owners to do business. Even visitors are complaining that the centre of this popular tourist destination is looking shabby and in need of maintenance.
Thus far, two shops have closed their doors and one tenant was evicted for failing to pay rental arrears. One tenant believes that there is not a single tenant that is not affected, and at this rate management might lose some important anchor tenants.
The property was bought by London and Regional and Dubai World for a staggering R7.3 billion back in 2006. Recently, several new developments at the Waterfront have been put on hold.
According to a shop owner, South Africans are spending a lot less and even though there were tourists, it is not near as much as previous years.
According to spokesperson, Maureen Thompson, rentals at the Waterfront were not way above market related prices and new tenants had already signed up for empty shops. She added that the developments on hold are a result of the global recession.
A concerned South African, now living in the UK, said he was appalled by the state of the Waterfront on a recent visit. According to him litter was floating on the water and he was worried that the historic Clock Tower was used by a restaurant for serving food.
Thompson raised the issue with the harbour master and he urged the owner of Emily’s restaurant to make an alternative plan.
Buy Roodepoort Property
Wednesday, March 11, 2009
Economist, Debt Counsellors Calling for Rate Cut
The information in this article is courtesy of iAfrica (Cut Interest Rates Now! – 11 March 2009)
Andre Snyman, CEO of Consumer Assist told iAfrica that growing debt is rapidly putting an increasing strain on consumers, banks, retailers and other financial institutions. He emphasized that interest rates must be cut by 2%.
Snyman is not alone in his plea, with economists and debt counselor around the country calling for a 200 basis point cut.
Snyman added that many consumers need just a little leeway for them to manage and an interest rate cut could avoid cash-strapped consumers losing their homes and cars.
According to Snyman heavily indebted people are coming from all walks of life and simply can’t cope anymore. These people are not paying school fees, which in turn causes difficulty with the financing of schools. It also causes health problems and depression.
Snyman said that should interest rates remain the same, South Africa will have to face the knock-on effects of seriously indebted people including fraud, corruption, low productivity, poor health, marital problems etc.
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Andre Snyman, CEO of Consumer Assist told iAfrica that growing debt is rapidly putting an increasing strain on consumers, banks, retailers and other financial institutions. He emphasized that interest rates must be cut by 2%.
Snyman is not alone in his plea, with economists and debt counselor around the country calling for a 200 basis point cut.
Snyman added that many consumers need just a little leeway for them to manage and an interest rate cut could avoid cash-strapped consumers losing their homes and cars.
According to Snyman heavily indebted people are coming from all walks of life and simply can’t cope anymore. These people are not paying school fees, which in turn causes difficulty with the financing of schools. It also causes health problems and depression.
Snyman said that should interest rates remain the same, South Africa will have to face the knock-on effects of seriously indebted people including fraud, corruption, low productivity, poor health, marital problems etc.
Buy property in Randburg
Monday, March 9, 2009
Rate Cut Needed to Kick-Start Market
The information in this article is courtesy of Fin24 ( SA house market on edge – 9 March 2009)
A cut in the interest rate is what South Africa needs to kick-start the troubled property market.
According to John Loos, property analyst at FNB Home Loans, rate cuts could avoid the market from finding itself in a similar position as that of overseas markets. At the moment the UK and South Africa are experiencing the same difficulties such as strict lending criteria and rising unemployment, but the major difference is that our interest rate has room to fall and stimulate our housing market somewhat. The UK, on the other hand, doesn’t have this luxury with there interest rate standing at an all time low of 0.5% against South Africa’s 10,5%.
The UK is also struggling with house prices falling throughout the country by 17.7% on an annual basis. The latest statistics show that South Africa’s house prices declined by 6.6% on an annual basis.
Loos recons that an interest rate cut could have a positive effect on the market but he warns that South Africa’s economy is as exposed to global conditions as other markets.
iAfrica reports that the “cut off” for a potential inter-meeting MPC rate cut will probably come with next Thursday’s manufacturing production release. This could result in at least a 100 basis point rate reduction ahead of the official 16 April announcement, according to Atlantic Asset Management
Buy West Coast property
A cut in the interest rate is what South Africa needs to kick-start the troubled property market.
According to John Loos, property analyst at FNB Home Loans, rate cuts could avoid the market from finding itself in a similar position as that of overseas markets. At the moment the UK and South Africa are experiencing the same difficulties such as strict lending criteria and rising unemployment, but the major difference is that our interest rate has room to fall and stimulate our housing market somewhat. The UK, on the other hand, doesn’t have this luxury with there interest rate standing at an all time low of 0.5% against South Africa’s 10,5%.
The UK is also struggling with house prices falling throughout the country by 17.7% on an annual basis. The latest statistics show that South Africa’s house prices declined by 6.6% on an annual basis.
Loos recons that an interest rate cut could have a positive effect on the market but he warns that South Africa’s economy is as exposed to global conditions as other markets.
iAfrica reports that the “cut off” for a potential inter-meeting MPC rate cut will probably come with next Thursday’s manufacturing production release. This could result in at least a 100 basis point rate reduction ahead of the official 16 April announcement, according to Atlantic Asset Management
Buy West Coast property
Thursday, March 5, 2009
Global Property Market Weakens
The information in this article is courtesy of Realestateweb (Global property market in tatters – 6 March 2009)
South Africa has not been hit as hard by die global economic meltdown as most other countries, but the property market has certainly seen better days.
The credit crunch has affected almost every property market in the world, including South Africa and Absa’s latest price index shows that prices as dipping fast. Absa puts the nominal year-on-year decrease of a middle segment house at about 1,3% for February, down to R950 800. FNB’s estimate is –7% and Standard Bank’s –2%.
Knight Frank House Price Index for the last quarter of 2008 ranks South Africa as number 17 out of 42 countries in terms of residential property returns. Dubai came in first, but analysts predict that this year will be a different story all together.
At the bottom of the list were Latvia, the United Kingdom, Iceland, the USA and Ireland.
Knight Frank said that these figures show that no country will escape unscathed by the global financial crisis. South Africa is particularly vulnerable at this stage.
“Despite higher gold prices, weaker mineral exports are causing its current-account deficit to swell, possibly to more than 10% of GDP (Gross Domestic Product) this year, at the same time as net foreign direct investment is expected to slump, so the country needs to borrow even more," said The Economist.
Nicholas Barnes, head of international residential research at Knight Frank said that predicting how much further market will fall in 2009 is virtually impossible.
Buy Garden Route property
South Africa has not been hit as hard by die global economic meltdown as most other countries, but the property market has certainly seen better days.
The credit crunch has affected almost every property market in the world, including South Africa and Absa’s latest price index shows that prices as dipping fast. Absa puts the nominal year-on-year decrease of a middle segment house at about 1,3% for February, down to R950 800. FNB’s estimate is –7% and Standard Bank’s –2%.
Knight Frank House Price Index for the last quarter of 2008 ranks South Africa as number 17 out of 42 countries in terms of residential property returns. Dubai came in first, but analysts predict that this year will be a different story all together.
At the bottom of the list were Latvia, the United Kingdom, Iceland, the USA and Ireland.
Knight Frank said that these figures show that no country will escape unscathed by the global financial crisis. South Africa is particularly vulnerable at this stage.
“Despite higher gold prices, weaker mineral exports are causing its current-account deficit to swell, possibly to more than 10% of GDP (Gross Domestic Product) this year, at the same time as net foreign direct investment is expected to slump, so the country needs to borrow even more," said The Economist.
Nicholas Barnes, head of international residential research at Knight Frank said that predicting how much further market will fall in 2009 is virtually impossible.
Buy Garden Route property
Wednesday, March 4, 2009
Expats Fuel Cape Property Market
This article is courtesy of iAfrica (Expats boosts CT property – 4 March 2009)
iAfrica report that expats returning to South Africa are fuelling rentals as well as sales in Cape Town.
This is according to Lanice Steward, MD of Anne Porter Knight Frank who added that this could largely be contributed to the economical woes that most countries are currently experiencing.
Steward said that around 3% of their buyers are expats returning to South Africa. These buyers are capable of paying large deposits or buying property with one check, meaning the National Credit Act are not holding them back.
Another trend, according to Steward, is retirees from the UK and EU coming to South Africa to take advantage of the current exchange rate that is giving them incredible value for their money.
Pam Golding’s Western Cape Rentals Director, Dexter Leite, explained that they have seen an upswing in rental activity across Cape Town. This is due to higher interest rates and tough lending criteria. Returning expats are also contributing to this upswing as they are opting to rent while evaluating their needs and searching for a home.
Leite added that retired visitors are also choosing to rent while they consider the possibility of settling here permanently.
Gerhard Kotze, CEO of Era South Africa, agrees with this saying that any South African equipped with sterling, euros or dollars is bonus for the property market.
Buy property in Bloemfontein
iAfrica report that expats returning to South Africa are fuelling rentals as well as sales in Cape Town.
This is according to Lanice Steward, MD of Anne Porter Knight Frank who added that this could largely be contributed to the economical woes that most countries are currently experiencing.
Steward said that around 3% of their buyers are expats returning to South Africa. These buyers are capable of paying large deposits or buying property with one check, meaning the National Credit Act are not holding them back.
Another trend, according to Steward, is retirees from the UK and EU coming to South Africa to take advantage of the current exchange rate that is giving them incredible value for their money.
Pam Golding’s Western Cape Rentals Director, Dexter Leite, explained that they have seen an upswing in rental activity across Cape Town. This is due to higher interest rates and tough lending criteria. Returning expats are also contributing to this upswing as they are opting to rent while evaluating their needs and searching for a home.
Leite added that retired visitors are also choosing to rent while they consider the possibility of settling here permanently.
Gerhard Kotze, CEO of Era South Africa, agrees with this saying that any South African equipped with sterling, euros or dollars is bonus for the property market.
Buy property in Bloemfontein
Monday, March 2, 2009
House Prices Shrinking Fast
This article is courtesy of Realestateweb (House prices fall even faster than expected – 2 March 2009)
Worrisome statistics show that the value of your home is 7% less than last year this time – and it is bound to get even worse. More shocking is the fact that this situation is a result or a decline in demand back in 2007, making one wonder what a recession might do to property values.
February saw house price deflation gather momentum, from a January revised rate of -4,7% to – 6,9% last month according to FNB home loans strategist John Loos. He recons the decline is not far off 12%.
FNB believes the prime interest rate could be down to around 11% before the end of the year, which should stimulate demand in a credit driven market. However. they also believe that the house price deflation will probably get worse before it gets better.
The average house price according to FNB sits at R706 000 in February 2009 while February 2008 saw the average house price at around R758 000. The longer-term picture looks better, with the average house price in February 2001 at R269 000, about R415 000 in February 2004 and climbing to R617 000 by 2006.
Buy property in Edenvale
Worrisome statistics show that the value of your home is 7% less than last year this time – and it is bound to get even worse. More shocking is the fact that this situation is a result or a decline in demand back in 2007, making one wonder what a recession might do to property values.
February saw house price deflation gather momentum, from a January revised rate of -4,7% to – 6,9% last month according to FNB home loans strategist John Loos. He recons the decline is not far off 12%.
FNB believes the prime interest rate could be down to around 11% before the end of the year, which should stimulate demand in a credit driven market. However. they also believe that the house price deflation will probably get worse before it gets better.
The average house price according to FNB sits at R706 000 in February 2009 while February 2008 saw the average house price at around R758 000. The longer-term picture looks better, with the average house price in February 2001 at R269 000, about R415 000 in February 2004 and climbing to R617 000 by 2006.
Buy property in Edenvale
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