HouseCheck Property News Digest: October 2012
Home prices rise slowly
There was moderate growth in house prices during September 2012, according to bond originator, ooba. The average house price for September was R876 717, up 4.5 per cent year-on-year.
The average home loan deposit was up from R142 885 in September 2011 to R156 172 in September 2012, which is 17.8 per cent of the purchase price.
The average purchase price for first-time buyers was up 6.7 per cent from R619 920 in September 2011 to R661 159 in September 2012.
First-time buyers now in majority
Of ooba’s total intake of bond applications in September, 54.0 per cent were from first-time buyers. This is the highest first-time buyer intake ooba has ever recorded.
Bond approval up significantly
ooba continues to report significant increases in the value of home loan approvals which was up 29 per cent year-on-year in September.
Many tenants now problem payers
Tenants renting homes priced below R3 000 per month have a high rate of non-payment with 18 per cent or nearly one in five tenants unable to pay any amount towards the rent, according to the Tenants Profile Network (TPN) Rental Payment Monitor Q2 2012.
According to the report, on a national average, 81 per cent of tenants were in good standing with their landlords, with the make-up of the bracket comprising 68 per cent in the Paid on Time sub-category and 13 per cent Paid Late.
The report reveals that 17 per cent of tenants renting homes priced R12 000 and above pay rent late.
Those renting homes priced between R3 000 to R7 000 and R7 000 to R12 000 continue to perform best with 84 per cent and 85 per cent respectively in Good Standing.
These tenants appear the most stable and are affected less intensely by changing market conditions.
Delinquent tenants in Gauteng are more likely to make a partial payment (10 per cent) rather than skip the payment (13 per cent) but tenants in KwaZulu-Natal show a higher probability of skipping payment (15 per cent) with a smaller number electing to make a partial payment (7 per cent).
The key for buy to let investors is to select rental properties in the most appropriate value bracket and location – and then place quality tenants who have been properly screened, including an affordability assessment.
The Western and Eastern Cape continue to have the most reliable rental payment performance, with 86 per cent and 88 per cent of tenants in Good Standing when viewed against the national average of 81 per cent.
Beach loses blue flag status after Big Bay property development
The Cape Argus reports that environmental chickens are coming home to roost at Cape Town’s Big Bay beach front development which was approved under controversial circumstances a decade ago. The issue of a “wet beach” and severely reduced dry sandy area, combined with the appearance of an algal bloom on the wet sand, were among the reasons for Big Bay losing its Blue Flag environmental beach status in 2010.
mNow adding to the environmental problems is a persistent sewage pipe leak into the lower car park basement of the Eden on the Bay development in the heart of Big Bay and other sewerage related issues which now constitute a “potential hazard to beach users”.
In March last year, close to 300 residents turned out to protest about continuing sewage spills.
A consultants’ preliminary assessment in May last year found that the primary cause and source of the water flow causing the wet beach was the “excessive” watering of the lawns, flowerbeds and artificially vegetated fore dunes with an irrigation system in “disrepair”.
The Big Bay development, established as a multi-million rand public-private partnership between the City of Cape Town and a consortium has been mired in political and environmental controversy from the outset.
The project, supposed to unlock at least R200m (at that time) as the city’s share of the profits, began in September 1999. Provincial Department of Environmental Affairs officials came under pressure to approve this development framework despite environmental concerns.
In 2005 it emerged that then ANC mayor Nomaindia Mfeketo had sold 14.5ha of prime seafront property in Big Bay to 17 black empowerment companies without an open tender process and at a major discount.
When tenders were scrapped and the process restarted, a R147m tender from Irish- owned Earthquake was recommended by the Mayor rejected this in favour of a R115m tender from empowerment consortium Jonga Entabeni, headed by Tokyo Sexwale.