The city fights back Sundays Times
Joburg’s rapidly growing maze of clusters and town-house complexes has sparked a standoff between the council and high-flyers at the Gauteng legislature. Fed up with the Gauteng development tribunal’s authority to overturn rejected development applications, the council went to court last week.
Developments that are rejected by the city and later approved by the tribunal on appeal have potentially disastrous implications because additional buildings place immense strain on the city’s electricity and water supply, sewerage and roads. The city lost its case against the tribunal in the Johannesburg High Court when it was ruled that the council did not have exclusive jurisdiction over such applications.
The ruling paves the way for disgruntled developers to sue for losses incurred. However, the council has instructed attorneys to study the ruling with a view to appealing.
Interest hikes take their toll Business Times
The interest rate increases, which take some time to filter through to the property market, and the effects of the National Credit Act, are finally having an impact on home loans.
The increase in the number of loans issued declined from 30.9% in October 2006 to 24.1% last year and could fall further to 18% by the end of this year.
Absa said that year-on-year house price increases in the middle segment of the market, worth an average of R962 000, slipped to 9.1% in January, the lowest since 1999. Furthermore on a month-on-month basis, growth in house prices was 0.1% compared to 0.2% in December, and the group expected price growth to slow further this year.
Herschel Jawitz, chief executive of Jawitz Properties Residential, said price growth would probably be in the single digits and that in first world countries, and even some third world countries, house price growth of 8% to 9% would be acceptable as inflation in these countries is between 1% and 3%. But in South Africa, with inflation at its current rates, a single digit increase offers nothing, if any, in real growth.
This having been said one must not lose sight of the current energy crisis, which could have the effect of driving up existing house prices due to the fact that it could dampen or halt new housing developments.
Property's wish list for budget
Business Day - South Africa
Although no one seriously expects a property-friendly budget from Finance Minister Trevor Manuel next week, property commentators have placed further transfer duty relief for home owners on their wish lists.
But if lower transfer duty is not on the menu, an "Eskom" budget would be just as welcome. First National Bank property strategist John Loos says his wish list includes further transfer duty relief, but he is "not very optimistic about that". "Personal tax relief would also help the residential property market at the moment, but I don't foresee much of that coming either".
82% of houses sold below asking price
Business Report - South Africa
Pretoria - About 82 percent of residential properties are now being sold for less than the asking price, compared with about 30 percent in the first quarter of 2005, while a home remains on the market for an average of 11 weeks before it is sold.
Jan Kleynhans, the chief executive of FNB Home Loans, said yesterday that houses in the top end of the market remained on the market for an average of 14 to 16 weeks while it took about eight weeks to sell a home at the lower end of the market.
Kleynhans said that, although activity levels in the residential property market were stable, FNB's residential property barometer revealed that the rate of change in activity levels declined by 15 percent in the fourth quarter of last year compared with a year earlier.
Now it’s a water crisis Business Times
South Africa is at the brink of a water crisis, potentially as bad as the electricity fiasco of the past few weeks.
In an alarming report, the National Nuclear Regulator (NNR) has confirmed evidence of contaminated water, and has acted to protect people and livestock.
Among the shocking findings contained in a series of reports are:
- 43% of the dams managed by the Department of Water Affairs and Forestry (DWAF) have safety problems and require urgent repair.
- An estimated R180-billion is needed to replace ageing water service infrastructure countrywide.
- Waste water from mining operations appears to have spread into the countries groundwater system.
- Vegetables and fish collected in the Wonderfonteinspruit Catchment Area west of Johannesburg have been contaminated with radioactive uranium.
The dire situation was discussed late last year at the DWAF portfolio committee meeting, which resolved to meet with the Minister of Water Affairs and Forestry to discuss contamination of municipal water.
The skills shortage is said to be the biggest cause of water contamination. This shortage leads to a lack of maintenance which in turn leads to breaks and blockages in pipes that spill contaminated water on its way to treatment and purification plants.
Hello Sardine City… where the electricity supply is very iffy Sunday Times
Developers have added more that 2.2-million homes in residential areas in South Africa as well as scores of new shopping complexes over the last decade, which has helped to stretch the country’s power limit.
As a result Eskom and municipalities are battling to keep up with electricity demand and in some instances municipalities have halted construction in densely populated areas while moratoriums have been handed out in others.
Property economist Francois Viruly said that reckless developers had used various “loopholes in legislation to sidestep’ approval from local authorities while others ignored the rules and started building before they got planning approval.
Eskom spokesperson Nto Rikhotso, who this week acknowledged that unauthorised development was still a major threat to power supplies, said Eskom was working closely with local authorities in an attempt to address this problem.
Another brick in the wall Sunday Times
Private estates in some of Johannesburg’s most exclusive suburbs have made way for scores of office parks.
More than 12.8 million square meters of offices in gated parks were created last year alone, according to Urban Studies, a firm that specialises in property and urban market research.
Property economist Francois Viruly said; “Parts of Johannesburg, such as Sandton and Illovo, now have extensive office developments… and densification must happen hand in hand with appropriate infrastructure, such as power supply.”
Viruly said the power substations in many of these areas were designed to accommodate electricity for residential homes, not the air-conditioned buildings which house hundreds of workers.
Manuel's budget speech takes centre stage
SABC News - South Africa
Finance Minister Trevor Manuel will take centre stage in Parliament next week when he presents his annual budget speech.
CEO of Integer Home Loans, Simon Stockley, says Manuel should give a budget speech that reflects growth and job creation in South Africa.
He says Manuel should focus on increasing the exemption on transfer duty from R500,000 to R1 million. Stockley believes that this will help first-time and ordinary buyers to afford property.