More and more home buyers are faking it
South Africa - Ennik Estates
“A new, and strange, phenomenon of ‘fake buying’ has emerged in the upper end of the Johannesburg homes market over the past five years, says real estate agency principal Ronald Ennik. And he is aware that it is also happening in Cape Town.
“It’s about ‘buyers’ who submit offers on (mainly) big ticket homes that they simply have no intention of purchasing – even if they can afford to close the deals”, adds the founder and principal of Ennik Estates.
“It is both a time-wasting and cost-consuming exercise. And it is also downright dishonest. If my own experience can be taken as a yardstick, it poses a real threat to the residential property sector as a whole,” says Ennik.
Interest rate drop a relief for property owners
South Africa - BetterBond
On the advice of the Monetary Policy Committee (MPC), the Reserve Bank decided this week to lower the repo rate by 25 basis points to 6,75%, which takes the prime lending rate and the variable mortgage rate from 10,5% to 10,25%.
This decrease, announced by Bank Governor Lesetja Kganyago, follows a steady decrease in the rate of inflation to 5,1% in June, and although small is good news for SA consumers as it will mean decreased monthly repayments on all kinds of debt - including credit and store card balances, vehicle purchase agreements and personal as well as home loans.
It will hopefully also help to raise consumer confidence and boost the economy out of recession, says Shaun Rademeyer, CEO of BetterBond, SA’s biggest mortgage originator, who notes that for those with an existing home loan, the drop in the variable mortgage rate will translate into a decrease of R16 a month for every R100 000 borrowed.
Interest rate drop a relief
Residential building statistics
South Africa - Absa
Continued subdued levels of residential building activity
Based on data published by Statistics South Africa, building activity in the South African market for new private sector-financed housing (see explanatory notes) remained largely subdued in the first five months of 2017. The planning phase of new housing contracted up to May, whereas the construction phase showed some improvement. However, divergent trends in building activity were evident in the various segments of new housing over the 5-month period.
The number of building plans approved for new housing was down by 6,2% year-on-year (y/y), or 1 418, to 21 498 in January to May this year. This came on the back of a contraction of 11,9% y/y, or 1 745 plans, to a combined total of 12 858 plans approved in respect of new houses. Plans approved in the segment of flats and townhouses increased by 3,9% y/y, or 327, to a total of 8 640 in January to May.
Growth in the volume of new housing units reported as being completed came to 3,0% y/y in January to May 2017, with a cumulative total of 16 865 units built during this period. The construction phase showed some noticeable divergent trends at a segment level, with relatively strong growth of almost 21,4% y/y, or 1 151 units, to 6 538 units, recorded in respect of flats and townhouses in the 5-month period up to May, whereas the segment for smaller-sized houses improved by 7,6% y/y, or 455 units, to 6 465 units over the same period. However, the segment for houses larger than 80m² showed a sharp contraction of 22,5% y/y, or 1 119 units, to a total of 3 862 units in the first five months of the year.
Building stats May 2017
I smell a rat: my first reaction is that such persons must be reported to the FIC. I suspect that these "purchasers" are out to obtain information and even documentation (lifted during several inspections of the house while the "relatives" and "experts" occupy the agent or owner) for purposes of fraud. It also helps to work the seller and agent up to a state of anticipation and ready to open any mail/document that looks like an offer coming in.