FNB’s Residential Property Barometer

FNB’s Residential Property Barometer

Excerpts from the latest FNB’s Residential Property Barometer for March 2020.

Main Points

  • The FNB House Price Index (HPI) showed that house price appreciation slowed to 2.8% y/y in March, the lowest print since May 2011 (i.e. in close to 9 years).  Importantly, the HPI is based on FNB’s mortgage approvals and mainly covers the period before South Africa went into lockdown on 27 March 2020. As such, the impact of the lockdown on volumes and prices is yet to reflect in the data.
  • FNB Market Strength Index (a composite index that gauges demand and supply strength, collected from a database of property valuers) has, since the beginning of this year, revealed a slowing trend in supply, and a deeper decline in demand (and thus reversing some of the 2H19 gains made).
    • This is on the back of heightened uncertainty over job security and souring sentiment due to a material deterioration in the economic outlook.
    • Disaggregation of the data by price segments shows that, on balance, the higher end market remains in excess supply, while the bottom end is still in structural supply-deficit. We expect these dynamics to play a crucial role in determining house price paths this year.
  • We expect mass job losses and heightened uncertainty to result in a sharp drop in transaction volumes, as buyers delay their purchasing decisions.
    • Preliminary deeds data shows that market volumes have declined by an estimated 40% y/y.
    • Interestingly, however, search engine data shows a rebound in web traffic to property portals in SA since lockdown (this is also a worldwide phenomenon).
    • While too early to definitively draw conclusions, this could be an early indication of burgeoning bargain hunting by investor buyers and/or pent-up demand from first-time buyers looking to capitalise on potential distressed selling.

Could we expect pent-up demand post Covid-19?

  • Empirical evidence suggests that pandemics tend to have a sharp but short-lived impact on property markets and that volumes tend to suffer more than prices. Market reports in developed countries, such as the US and UK, suggest that Covid-19 will have a similar impact – a short-term decline in transaction volumes (and prices) and a swift rebound.
  • Among key distinctions between SA and these countries is the divergent labour market trends prior to the Covid-19 shock. Robust employment growth in these countries built a strong demand base, which resulted in stock shortages and thus a surge in house prices.
    • Thus, a sudden drop in house prices could unleash pent-up demand from first-time buyers and investor buyers (buy-to-let purchases). The historically low interest rates in the developed countries (close to 0% versus 4.25% repo rate in SA) will only galvanise this demand, and thus facilitate a swift rebound in prices.
    • Unfortunately, conditions are not as favourable in SA. Notwithstanding prospects for further interest rates reduction, the uninspiring employment outlook effectively limits any prospects for such pent-up demand in SA.

What lies ahead?

  • We expect Covid-19 to have a sharp but short-lived impact on SA’s housing market. We expect that transaction volumes will, in the short term, take a bigger hit relative to prices. In contrast to international housing markets, however, the overall recovery in SA will likely be drawn out due to pre-existing weakness in consumer fundamentals.
  • While aggressive cuts in interest rates, and possibly a reduction in house prices, will eventually support purchasing activity, in the short term this will likely be outweighed by heightened uncertainty and second-round effects on the labour market.
  • In the end, the magnitude and endurance of this weakness will depend primarily on a rebound in the broader economy, sustained liquidity in the property market and material improvement in sentiment. The impact could linger for longer if liquidity dries up and lending standards tighten a tad more than we expect. We will keep a close eye on developments and revise our forecasts as more data becomes available.

Read / Download Full Report: Property barometer – Apr 2020

Siphamandla Mkhwanazi | Economist | FNB Economics |

Dear South African friends

Dear South African friends

As we go into lockdown in South Africa (and Ireland where I am) I thought to post some thoughts.

These are trying times for us all. Many of us will go through similar cycles of fear for our own well-being, and for our family; concerns for our jobs or income, and worry about how the financial markets will affect economies and ultimately impact us.

As we should all know by now being in lockdown and adhering to it is vital to “flatten the curve”, to reduce and delay the peak of the epidemic and protect healthcare capacity. The majority of us, if we catch this virus, will get through it with slight to moderate symptoms. However, we all need to play our part by staying home to ensure that the more vulnerable in our society – the elderly, those with certain pre-existing health conditions, our healthcare workers, and the poverty-stricken – are shielded from this virus.

To be frank this will be a period of great adjustment and it will test us and our relationships. It is unlikely that South Africa will only be under lockdown for only 21 days if China, Italy, New York and Spain’s lockdowns are anything to go by. This virus will define a generation, if not a lifetime.

It’s our choice, though, how we let this define us. A chance to reflect, to take stock; to reconnect with ourselves… to rest and recuperate. This will offer us an opportunity to be more mindful; of ourselves, our choices, our bodies, our minds, our family and loved ones, our friends and neighbours and colleagues; our communities and our environment. To evaluate our ultimate impact; are we the people we always wanted to be?

Maybe our lockdown will be a chance for us to catch our breath too. Let us achieve our own clarity during this period of introspection. A time to practise our gratitude, our faith, our humanity… to confront our demons. To listen, to learn, to teach; for parents overwhelmed with children at home, let this be a teachable lesson and lead by example. Show the minds of tomorrow how to deal with adversity, with grace and fortitude.

The universe has a way of teaching us a lesson over and over again until we learn it. This time of healing can also be a time of growth. When we emerge from this on the other side, we will all be forever changed but let that change be for the better. God knows we will all make a huge investment in that change!

Andre de Villiers
Chas Everitt Cape Town South

All Beaches Are Closed

All Beaches Are Closed

The City of Cape Town has decided to close down beaches as people continue to visit them despite calls for social distancing.

Beaches will close starting tomorrow morning, Tuesday, March 24, to limit public contact as the country battles the spread of the coronavirus (Covid-19). Swimming, surfing, kite-surfing, kayaking, recreational fishing, and any other beach or water-based activity will be prohibited.  Law enforcement will patrols the beaches while lifeguards will remain stationed on the beaches to assist the officers.

The Shark Spotting Programme will also be stopping all shifts and no Shark Spotters will be on duty at any beaches.


Community service announcements from

#StrongerTogether 

Moving Your Money

Moving Your Money

At the end of 2018 I sold my house in Cape Town as I was moving to Ireland. Although I have been in Cape Town real estate for over 35 years, I was still shocked at what banks wanted to charge me for transferring my money overseas.

If an international exchange of funds is involved in your property transaction you should pay close attention to the exchange rates you will be charged, as well as how long the transfer is likely to take and whether there are tax implications or clearances required.

I used the services of RandTransfers who offered me cost-effective foreign exchange and I cannot recommend them enough. There are so many things to do when you are doing an international move but they saved me money and time by opening an international trading account for me which I have since used for further transfers once I had moved.

I have got to know Willem van Rensburg well and his staff. They had already helped clients of our mostly bringing money into South Africa but it was interesting to be involved in this process as a client, and I so appreciate their service.

Willem and Dawn are a pleasure to deal with and are very knowledgeable and solution orientated. Unlike “the bank” they think broadly about the best solutions and not just the easiest or the most profitable!

They have helped me and valued clients with

• Bond payments, deposits and cash transactions for property purchases.
• Rental payments, offshore account setups / policies / trusts.
• They do not charge fees on any transfer of funds into or out of your country of investment or residence.
• Tax advice / Tax clearance.
• Bank Guarantees if required and bank accounts (Both in South Africa or abroad )
• Securing preferential exchange rates with a 24 to 48 hour delivery period to or from South Africa.

I don’t often do recommendations like this, but I have offered to do it because RandTransfers service and solutions warrant it. With so many expenses involved in moving and awful exchange rates who doesn’t need to save money with their currency transactions and less admin!

If you are interested in these services please contact Willem Van Rensburg on forex@randtransfers.com

#PositiveFacebookPage criteria for this Blog / Website

#PositiveFacebookPage criteria for this Blog / Website

With immediate effect, this Website will subscribe to the #PositiveFacebookPage criteria of no longer covering any negative reporting on issues.

We have unprecedented challenges ahead of us. This is NOT ABOUT SUGAR COATING community news but about playing a positive role in an unprecedented time of national crisis. This is now the calm before the storm and its time NOW to adjust our mids to what attitudes will help us all prevail till this has passed.

Let’s all embrace the need to share things responsibly and positively. Be a #PositiveFacebookPage and share humour share positive ideas and be a source for encouragement and inspiration.  We will.

Cleaning Routines to Keep Your Home Virus-Free

Cleaning Routines to Keep Your Home Virus-Free
We want ‘home’ to be a haven (especially during stressful times), and part of that, at a fundamental level, means living in a space that helps keep us healthy. According to the most current evidence from the Centers for Disease Control and Prevention, the virus that causes COVID-19 is spread primarily through close personal contact (within about 6 feet). So it’s more important to practice social distancing, not touch your face and wash your hands often and well than it is to be overly concerned about cleaning your house. And although the CDC has not found evidence of surface-to-person transmission to date (which is good news!), the virus may live on surfaces for hours to days, making regular cleaning and disinfecting a wise practice during this time.

Upgrade Hand-Washing Stations

The CDC recommends washing hands with soap and water for 20 seconds, especially after blowing your nose, coughing or sneezing; before eating or preparing food; and after using the bathroom. Stock up every sink in the house to make hand-washing easier and more sanitary with:

  • A bottle of liquid hand soap (anti-bacterial soap not needed)
  • Stacks of fresh hand towels and a hamper for dirty towels, or a roll of paper towels and a wastebasket
  • A container of sanitizing wipes for daily cleaning of faucets and counters

What About Hand Sanitizer?

You can use an alcohol-based hand sanitizer containing at least 60% alcohol when soap and water aren’t available. But if your hands are visibly dirty, the hand sanitizer will not be effective, and hand-washing is recommended.


Know the Difference Between Cleaning and Disinfecting

The important thing to remember is that cleaning should come first — if a surface is dirty, germs can be hiding below the dirt and grime, making disinfecting efforts less effective.

  • Cleaning removes dirt, grime and germs — this helps reduce the number of germs.
  • Disinfecting actually kills germs on surfaces using chemicals, which helps reduce the risk of spreading infection when done after cleaning.

Use the Right Products — and Follow Instructions

When it comes to cleaning, regular soap and water are all you need. But for the second step of disinfecting, it’s important to be sure you’re using the right product. EPA-registered disinfectants (see the current list here  * USA list) approved to fight the novel coronavirus are what you want to look for. Already have rubbing alcohol or bleach in your cupboards? Either one will fight the COVID-19 virus. (A word of caution on using bleach to clean surfaces: It can discolour laminate and may damage the seal on granite and other stone countertops over time.)

  • If surfaces are dirty, remember to clean with soap and water first.
  • To prepare a bleach solution, mix 5 tablespoons (⅓ cup) bleach per gallon of water, or 4 teaspoons bleach per quart of water. Never mix household bleach with ammonia or any other cleaners.
  • If using rubbing alcohol, choose an alcohol solution containing at least 70% alcohol.
  • Check expiration dates. Do not use expired products, as they may not be effective against the COVID-19 virus.
  • Follow label instructions. Clorox has issued specific recommendations for preventing the spread of the COVID-19 virus, including leaving bleach solution on surfaces for five minutes.

Focus on High-Touch Surfaces

Cleaning and sanitizing the entire house would be overwhelming — and probably excessive. Instead, focus on the surfaces that get lots of contact throughout the day. These areas include doorknobs, light switches, tables, remote controls, handles, desks, toilets and sinks. And if you have kids or housemates who play video games, include those video game controllers.

Start a Just-Got-Home Routine

Put your belongings down in one spot, paying attention to what you carried with you throughout the day — likely suspects include your phone, keyring and sunglasses. Wash your hands for 20 seconds, then wipe personal items with an EPA-registered disinfecting wipe and leave to dry. When cleaning electronics, keep liquids away from openings, never submerge devices, and be especially gentle with touchscreens.

Help Kids Follow the Recommendations

If you have kids at home — especially if they’re not so keen on frequent hand-washing — consider one or more of these to make the ritual more fun:

  • Let your child pick out a fragrant hand soap, or put hand soap in a colourful container.
  • Tape the verse of a silly song to the mirror so they can sing for the recommended 20 seconds.
  • For younger children, cue up a song to sing along to on your phone.
  • Be sure a sturdy stool is positioned by every sink in the house to make the soap and water accessible.

Do the Laundry, Wash Your Hands

If you have a cloth laundry hamper liner, toss it in the wash when you do the laundry. Wash laundry on the warmest setting your clothes and linens can handle, and avoid shaking dirty laundry, which can spread a virus through the air. And when you’re done handling dirty clothes and towels, be sure to wash your hands.

If Someone Is Sick, Take Extra Care

If you or someone in your house may be sick, you’ll need to take more precautions. Check the CDC’s recommendations for household members and caregivers on its website. A few of the most important precautions include isolating the sick person in their own room and bathroom, not sharing personal household items, handling their laundry with gloves (and washing your hands afterwards) and cleaning high-touch surfaces daily.

Showhouses & Coronavirus

Showhouses & Coronavirus

Within a week everything so much changed! Like every business, real estate companies are scrambling to understand and make changes that are sure to be required due to the Coronavirus measures being implemented.

Here are seven common-sense measures all agents and sellers and buyers should follow for showhouses:

  1. Buyers should view the property online first and shortlist those for viewing as opposed to randomly popping in to see properties they have no idea will or will not be suitable.
  2. Buyers should consider not bringing children or additional members of the family on multi viewings. Of course, if a home is selected or shortlisted for a second viewing then a full family visit can be arranged where children are closely monitored.
  3. On entry to the property, a warm welcome should not involve any handshake.
  4. If there is a good attendance people should be asked and prepared to wait until there are fewer people inside the house doing a viewing – the fewer the better.
  5. On entry to the property, a hand sanitiser should be used and if there is no alternative an appropriate spray wash and paper towel dry.
  6. Buyers should be reminded to avoid touching anything – and doors to rooms should be left open for viewing and not closed. Door handles should be wiped with an appropriate product before and after the showhouse.
  7. The agent should discuss related issues to the opening and the closing of the showhouse with the seller.

    Let’s talk and be sensible about solutions!

    Want to share an idea? Email: andre@capetownshowhouses.co.za

 

All the showhouses in Cape Town every Sunday

All the showhouses in Cape Town every Sunday

A new website www.CapeTownShowhouses.co.za has all the showhouses in all of Cape Town every Sunday with a focus on those in Cape Town’s Southern Suburbs and False Bay.  It also has a Showhouse Blog that will provide additional useful showhouse related information.

STBB Claremont has a useful guide to who pays for what in the transfer process that property buyers and sellers will find useful.  It is intended that the site will be expanded in the next few weeks to provide the most comprehensive showhouse resource available.

Superb False Bay views from this Glencairn property which has been selected as this week’s Showhouse of the Week on www.CapeTownShowhouses.co.za

This week’s featured showhouse is in Glencairn Heights for R2 900 000.  The featured showhouses module has been exclusively secured by Chas Everitt International’s Cape Town South franchise for six months.

 

Endangered western leopard toad threatened by an invasive look-alike.

Endangered western leopard toad threatened by an invasive look-alike.

Endangered western leopard toad threatened by an invasive look-alike, public urged to help.

Cape Town – The discovery of the invasive guttural toad species on a property near Seascape Road in Noordhoek has set off alarm bells in conservation circles, who fear the invader species might hinder the livelihood of the endangered western leopard toad that is endemic to the area.

Noordhoek is one of the most important traditional breeding areas of the endemic and endangered western leopard toad (Sclerophrys pantherinus), a close relative of the more common guttural toad (Sclerophrys gutturalis).

Guttural toads and leopard toads look very similar to the untrained eye, and the identification of eggs and tadpoles (which look almost identical even to professionals) is particularly difficult.

But the City of Cape Town and are urging residents to be on the lookout for the guttural toad nonetheless, in a bit to save the natural habitat and breeding grounds of its more endangered relative.

 

The main differences between the two species are:

The City’s service provider, NCC Environmental Services, who currently run the guttural control programme in Constantia, will now also focus on the Noordhoek area.

NCC will also work closely with Toad Nuts, a local group formed to protect and save the western leopard toad.

Residents are urged to listen for the distinctive guttural toad call and to report the occurrence immediately by sending an e-mail to gutturaltoad@ncc-group.co.za

 

The City also asks residents never to move any toad, tadpole or eggs between water bodies.

Johan van der Merwe for the environmental affairs of the City of Cape Town says the western leopard toad and guttural toad do not co-exist naturally and “this situation may cause several complications. These may include competition for food, predation, and the introduction of external diseases and pathogens. Hybridisation could also be a potential threat.

“Following this early detection of the guttural toads in Noordhoek, there must be a rapid response by conservation authorities, the Invasive Species Unit and residents. If all the individuals, tadpoles and eggs can be found during this early stage of the invasion, guttural toads can be removed from Noordhoek completely.

“The survival of the endemic western leopard toad depends on access to uninvaded breeding grounds such as Noordhoek. The advance of the guttural toad must, therefore, be stopped before guttural toads become established and form a viable breeding population in Noordhoek,” Van der Merwe says.

It is not just the frogs themselves that can create problems, but the diseases and parasites that accompany the frogs may cause further environmental harm.

Once the invasion of guttural toads into Noordhoek is past the early detection and rapid response stage, control becomes extremely challenging and expensive.

This has already happened in Constantia, where an intensive five-year-old control programme has been unable to stop the spread of guttural toads into Bishopscourt. The City’s service provider, NCC Environmental Services, continues to fight the toad in the area.

Although the guttural toad is indigenous to South Africa, it does not naturally occur in the Western Cape.

Invasive species such as the guttural toad are introduced to areas outside their natural range either deliberately or accidentally. The likely scenario for an accidental introduction is that nursery plants were moved from the area where guttural toads naturally occur to Cape Town. Once they arrived at their new habitat, they reproduced and established the colonies that are now invading many water bodies in Constantia and Bishopscourt.

It could also be the case that well-meaning residents who do not want to harm animals but also don’t want them in their gardens, physically relocate toads to natural areas around the city. This is a highly problematic practice and causes havoc for nature conservation officials.

The most effective method of managing invasive species is to prevent them from being introduced to areas outside their natural distribution range in the first place.

This article has been adapted from traveler24.com,  – Louzel Lombard

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