The oobarometer has shown a rise in house prices for the fifth consecutive month. It is also the biggest monthly increase we have seen since houses prices started rising.
The oobameter findings include:
Monday, November 16, 2009
House Prices Rise Yet Again
The information in this article is courtesy of Realestateweb (House prices surge for fifth consecutive month - 13 November 2009)
The oobarometer has shown a rise in house prices for the fifth consecutive month. It is also the biggest monthly increase we have seen since houses prices started rising.
The oobameter findings include:
The oobarometer has shown a rise in house prices for the fifth consecutive month. It is also the biggest monthly increase we have seen since houses prices started rising.
The oobameter findings include:
Wednesday, October 7, 2009
House Price Deflation Continues to Slow Down
The information in this article is courtesy of Business Report (Absa: House prices set to rise again – 7 October 2009)
The latest Absa house price index showed that nominal year-on-year price deflation in the housing market has slowed down even further in September 2009.
Jacques du Toit, Absa’s senior property analyst, believes that if these trends continue, South Africa might see house prices rising in the near future.
On a month-on-month basis, prices continued to rise in September after reaching a lower turning point in April this year.
Absa said that middle-segment house prices were down by a nominal 0.3 percent year-on-year to R966,300 in September 2009, from a revised -1.1 percent year-on-year in August.
On a monthly basis, house prices increased by a nominal 0.8 percent in September, from a revised increase of 0.9 percent in August.
Absa said that by September, the average house price was 3.4 percent up on the low reached in April 2009.
In real terms, house prices in the middle segment were down by 7.1 percent year-on-year in August (versus -8.2 percent year-on-year in July).
Prices of small houses (80m-140m) were a nominal 4.2 percent year-on-year lower in September (versus -4.4 year-on-year in August after revision).
"This brought the average nominal price of houses in this segment to about R651,400 in September," Du Toit said.
With regard to medium-sized houses (141m-220m), the average nominal price declined by 5.2 percent year-on-year in September (versus -4.7 percent year-on-year in August after revision), which brought prices in this category of housing to an average of R901,700.
According to Absa, this translated into a real price decline of 10.4 percent year-on-year in August (versus -10.2 percent year-on-year in July).
The latest Absa house price index showed that nominal year-on-year price deflation in the housing market has slowed down even further in September 2009.
Jacques du Toit, Absa’s senior property analyst, believes that if these trends continue, South Africa might see house prices rising in the near future.
On a month-on-month basis, prices continued to rise in September after reaching a lower turning point in April this year.
Absa said that middle-segment house prices were down by a nominal 0.3 percent year-on-year to R966,300 in September 2009, from a revised -1.1 percent year-on-year in August.
On a monthly basis, house prices increased by a nominal 0.8 percent in September, from a revised increase of 0.9 percent in August.
Absa said that by September, the average house price was 3.4 percent up on the low reached in April 2009.
In real terms, house prices in the middle segment were down by 7.1 percent year-on-year in August (versus -8.2 percent year-on-year in July).
Prices of small houses (80m-140m) were a nominal 4.2 percent year-on-year lower in September (versus -4.4 year-on-year in August after revision).
"This brought the average nominal price of houses in this segment to about R651,400 in September," Du Toit said.
With regard to medium-sized houses (141m-220m), the average nominal price declined by 5.2 percent year-on-year in September (versus -4.7 percent year-on-year in August after revision), which brought prices in this category of housing to an average of R901,700.
According to Absa, this translated into a real price decline of 10.4 percent year-on-year in August (versus -10.2 percent year-on-year in July).
Monday, September 21, 2009
Property Market Shows Signs of Recovery
The information in this article is courtesy of iAfrica (Property slump is over! – 21 September 2009).
The latest OOBArometer price index is showing some signs of recovery after it recorded a 6.9% increase in year-on-year house prices. This is the third month in a row that the index showed an improvement.
According to chief executive of OOBA, Rhys Dryer, the biggest drivers of a market recovery is bank lending. There has also been an improvement in competitiveness between banks and an increase in approval rates.
The price of an average house now stands at R795 241. Last August this price was R743 403.
The month-on-month average purchase price has also increased by 2.5 percent from R775 172 in July of this year.
The year-on-year average bond size is still down by 5.4% although the month-on-month average approved bond size has shown a 4% improvement.
At the moment buyers are paying an average of 23.1% deposit on the purchase price compared to the 13% paid last year August. This figures shows an improvement on the average deposit required from 24.2% in July 2009.
Banks willingness to lend is also being witnessed as the month-on-month average bank decline ratio shows an improvement for the fourth consecutive month. The index also recorded that 19.2% of applications declined by a lender is accepted by another bank.
According to Dyer there are now mounting evidence that the property market is heading towards recovery, which can be seen in increased applications and increased approvals, all driven by improved affordability, relaxation in the bank lending criteria, increased bank competitiveness and increased demand.
The latest OOBArometer price index is showing some signs of recovery after it recorded a 6.9% increase in year-on-year house prices. This is the third month in a row that the index showed an improvement.
According to chief executive of OOBA, Rhys Dryer, the biggest drivers of a market recovery is bank lending. There has also been an improvement in competitiveness between banks and an increase in approval rates.
The price of an average house now stands at R795 241. Last August this price was R743 403.
The month-on-month average purchase price has also increased by 2.5 percent from R775 172 in July of this year.
The year-on-year average bond size is still down by 5.4% although the month-on-month average approved bond size has shown a 4% improvement.
At the moment buyers are paying an average of 23.1% deposit on the purchase price compared to the 13% paid last year August. This figures shows an improvement on the average deposit required from 24.2% in July 2009.
Banks willingness to lend is also being witnessed as the month-on-month average bank decline ratio shows an improvement for the fourth consecutive month. The index also recorded that 19.2% of applications declined by a lender is accepted by another bank.
According to Dyer there are now mounting evidence that the property market is heading towards recovery, which can be seen in increased applications and increased approvals, all driven by improved affordability, relaxation in the bank lending criteria, increased bank competitiveness and increased demand.
Friday, August 14, 2009
Mboweni Announces Surprise Rate Cut
The information in this article is courtesy of Fin24 (Rate Cut Surprise – 13 August 2009)
South African Reserve Bank Governor, Tito Mboweni surprised the nation yesterday by announcing a 50 basis point rate cut. This brings the interest rate down to 7.0%.
According to Mboweni the monetary committee had quite a long debate about the issue and in the end the cut was agreed on.
He said that the international economy seems to have improved although he warned that recovery would not be uniform across all regions and countries.
He also added that it is clear that the exchange rate has been of some assistance in the job of lower the country’s inflation.
Consumer Price Inflation (CPI) are forecast to stay more or less unchanged with CPI inflation predicted to continue a moderate downward trend and enter the target band around the second quarter of 2010 and remain there until the end of 2011.
South African Reserve Bank Governor, Tito Mboweni surprised the nation yesterday by announcing a 50 basis point rate cut. This brings the interest rate down to 7.0%.
According to Mboweni the monetary committee had quite a long debate about the issue and in the end the cut was agreed on.
He said that the international economy seems to have improved although he warned that recovery would not be uniform across all regions and countries.
He also added that it is clear that the exchange rate has been of some assistance in the job of lower the country’s inflation.
Consumer Price Inflation (CPI) are forecast to stay more or less unchanged with CPI inflation predicted to continue a moderate downward trend and enter the target band around the second quarter of 2010 and remain there until the end of 2011.
Friday, August 7, 2009
Have We Reached the Bottom?
The information in this article is courtesy of iAfrica (Almost, but not quite – 6 August 2009)
According to Absa’s House Price Index for July, the houses price deflation may be bottoming out.
According to Absa analyst, Jacques du Toit, South African house prices have been deflating since late 2008. However the trend seems to be near the turning point on a year-on-year basis, while month-on-month deflation has also slowed down further in July after bottoming out in March this year.
House prices in the middle segment of the market were down by 4.2% year-on-year to R925 100 in July, following a decline of 4.1% year-on-year in June.
Houses prices were 0.2% lower in July on a month-on-month basis, compared to a decline of 0.4% recorded in June.
According to du Toit, this means that the average nominal price for middle segment houses were at their lowest level in July since the second quarter of 2007.
He added that although the South African economy is currently in recession, we could expect the bottom of the cycle and gradual recovery toward the second half of the year. Du Toit also predicts that house price will continue to decline, but the pace of the decline was also suspected to slow down during the second half of this year.
The projected price decline for this year stands at between 3 and 3.5% after last year’s 3.7% price increase.
According to Absa’s House Price Index for July, the houses price deflation may be bottoming out.
According to Absa analyst, Jacques du Toit, South African house prices have been deflating since late 2008. However the trend seems to be near the turning point on a year-on-year basis, while month-on-month deflation has also slowed down further in July after bottoming out in March this year.
House prices in the middle segment of the market were down by 4.2% year-on-year to R925 100 in July, following a decline of 4.1% year-on-year in June.
Houses prices were 0.2% lower in July on a month-on-month basis, compared to a decline of 0.4% recorded in June.
According to du Toit, this means that the average nominal price for middle segment houses were at their lowest level in July since the second quarter of 2007.
He added that although the South African economy is currently in recession, we could expect the bottom of the cycle and gradual recovery toward the second half of the year. Du Toit also predicts that house price will continue to decline, but the pace of the decline was also suspected to slow down during the second half of this year.
The projected price decline for this year stands at between 3 and 3.5% after last year’s 3.7% price increase.
Friday, July 31, 2009
The End of the Line for Rate Cuts
The information in this article is courtesy of iAfrica (The party’s over – 28 July 2009)
The Bureau for Economic Research (BER) announced this week that consumers should not expect any interest rate reductions in the foreseeable future.
The bureau's economist Hugo Pienaar said in a statement on economic prospects for the third quarter of 2009, that this was in light of recent double-digit wage settlements in a number of sectors and indications that the worst of the domestic recession might have passed.
Last month South Africa saw Reserve Bank's monetary policy committee deciding to keep the interest rate unchanged at 7,5% after reducing the repo rate by a cumulative 450-basis-points between December 2008 and May 2009.
According to Pienaar the June rate decision can be interpreted as a pause in the rate cycle in order to give the MPC an opportunity to gauge the impact of the rate, which generally takes a while to take effect.
He added that the decision also indicates that we have reached the end of the monetary easing cycle, meaning no further rate cuts should be expected.
Prospect for consumer spending remains a concern mainly due to the potential for further sharp job losses. This means that the Reserve Bank could cut the repo rate further later in 2009 should household outlays continue to deteriorate and inflation slows faster than expected.
“In line with the South African Reserve Bank's latest inflation projection, the bureau's forecast suggested CPI would remain above six percent through February 2010, with a sustained fall below six percent only forecast from the second quarter of 2010,” said Pienaar
He added that petrol prices could decline by more that 20c per litre in the beginning of August due to the strength of the rand exchange rate and a recent drop in the oil price.
All and all South Africans can expect a positive gross domestic product growth from the third quarter, but the economy was forecast to contract by 2% during 2009 bringing the projected growth for 2010 to about 2,7%.
The Bureau for Economic Research (BER) announced this week that consumers should not expect any interest rate reductions in the foreseeable future.
The bureau's economist Hugo Pienaar said in a statement on economic prospects for the third quarter of 2009, that this was in light of recent double-digit wage settlements in a number of sectors and indications that the worst of the domestic recession might have passed.
Last month South Africa saw Reserve Bank's monetary policy committee deciding to keep the interest rate unchanged at 7,5% after reducing the repo rate by a cumulative 450-basis-points between December 2008 and May 2009.
According to Pienaar the June rate decision can be interpreted as a pause in the rate cycle in order to give the MPC an opportunity to gauge the impact of the rate, which generally takes a while to take effect.
He added that the decision also indicates that we have reached the end of the monetary easing cycle, meaning no further rate cuts should be expected.
Prospect for consumer spending remains a concern mainly due to the potential for further sharp job losses. This means that the Reserve Bank could cut the repo rate further later in 2009 should household outlays continue to deteriorate and inflation slows faster than expected.
“In line with the South African Reserve Bank's latest inflation projection, the bureau's forecast suggested CPI would remain above six percent through February 2010, with a sustained fall below six percent only forecast from the second quarter of 2010,” said Pienaar
He added that petrol prices could decline by more that 20c per litre in the beginning of August due to the strength of the rand exchange rate and a recent drop in the oil price.
All and all South Africans can expect a positive gross domestic product growth from the third quarter, but the economy was forecast to contract by 2% during 2009 bringing the projected growth for 2010 to about 2,7%.
Monday, July 20, 2009
Mboweni’s Successor Announced
The information in this article is courtesy of iAfrica ( Mboweni steps down - 20 July 2009)
The current Chair of Absa Bank, Gill Marcus will be Reserve Bank Governor Tito Mboweni’s successor. This was announced by president Jacob Zuma at the Union Buildings on Sunday, 19 July 2009 after Mboweni indicated that he wanted to step down to pursue his own personal interests.
After being introduced to the media, Marcus refused to be bated on her views about the bank’s current inflation targeting policies, saying that it is far to early to comment.
Marcus has been seen as someone with good economic experience from both private and public sectors. This indicates that the market will likely welcome her appointment.
Mboweni said in his speech that he enjoyed an excellent working relationship with the presidency, the national treasurer and the minister of finance during his time as governor. He also congratulated Marcus on her appointment.
The SA Communist Party also congratulated Gill saying that her appointment is a “breath of fresh air”.
Economist Mike Schussler said that Marcus is a person with sound judgment, adding that her knowledge of the institution would ensure continuity. According to him there should be change in policy from her.
The current Chair of Absa Bank, Gill Marcus will be Reserve Bank Governor Tito Mboweni’s successor. This was announced by president Jacob Zuma at the Union Buildings on Sunday, 19 July 2009 after Mboweni indicated that he wanted to step down to pursue his own personal interests.
After being introduced to the media, Marcus refused to be bated on her views about the bank’s current inflation targeting policies, saying that it is far to early to comment.
Marcus has been seen as someone with good economic experience from both private and public sectors. This indicates that the market will likely welcome her appointment.
Mboweni said in his speech that he enjoyed an excellent working relationship with the presidency, the national treasurer and the minister of finance during his time as governor. He also congratulated Marcus on her appointment.
The SA Communist Party also congratulated Gill saying that her appointment is a “breath of fresh air”.
Economist Mike Schussler said that Marcus is a person with sound judgment, adding that her knowledge of the institution would ensure continuity. According to him there should be change in policy from her.
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