Bumper First Quarter For Golding

Following on significant sales of R400 million in January alone, Pam Golding Properties’ Western Cape metro region has gone on to post bumper first quarter sales figures for 2007. 

Regional MD Mick Joyce reports that his agents closed R772 million in sales for the period January to March 2007 – representing market share of 17 percent.

Dr Andrew Golding, CE of the Pam Golding Property group, says these results well exceed the region’s budgeted growth of 10-12 percent for the year. “This reaffirms PGP’s consistently sound performance in the Western Cape, which is home to the group’s headquarters,” he says.

Joyce has voiced delight at the first quarter results: “These sales indicate that the property market is holding its own despite the tightening interest rate environment.  When one compares national statistics for the first quarter of 2006 versus 2007, we see that the number of units sold across all agencies, dropped by nearly seven percent, as the effects of previous interest rate increases came into play.  However despite this slight slowing down of sales activity, there was a significant increase in the rand value of sales of 17 percent, year-on-year.  This confirms our belief that the housing market has stabilised and that sound appreciation is being achieved, with a generally steady demand for homes in all price brackets, and somewhat higher activity in the upper end of the market.  In fact, given the interest rate climate, we do not believe a seven percent drop in unit sales is very significant.  We are further gratified that the PGP drop in unit sales was well below the industry average, at three percent.  In this light, and taking the seasonality of the Western Cape market into account, we are confident that the Western Cape metro region will achieve its forecast growth of 10 to 12 percent for the year.”

Joyce adds that the strong first quarter results are continuing into the second quarter, with sales in May totalling a very healthy R389 million, and average 12 month market share standing at 16.8%.  Average house prices also rose from R580 000 in April to R600 000 in May, according to Standard Bank data.  All this despite the winter months traditionally being quieter ones for the property market.  Joyce points out that some commentators have attributed the strong May data to a push by agents and bond originators to close deals prior to the implementation of the National Credit Act on 1 June. 

 “Whilst this may yet prove to be the case,” he says, “all indications are that PGP continues to experience sound sales activity in June, despite the Act’s coming into effect.  The upper end of the market in particular is doing well, proving to be resilient to the latest interest rate hike.” 

Article from Cape Business News

SA Rate Increases Not Impacting Economy

Engineering News published an article where the South African Finance Minister, Trevor Manuel is quoted as saying that the recent interest rate hike is not having a serious impact on the country’s economy.

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Nicholas Vardy wrote a very interesting article regarding the global real estate market.  According to the article, commercial property growth in South Africa is amoung the highest in the world.

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New National Credit Act is forcing banks to turn down loans.

Home buyers are finding it harder to get loans approved due to stricter requirements under the new National Credit Act.

Absa Bank, the largest retail bank in South Africa, admitted that it had to turn down more home loan applications since the law came into effect on June 1.Louis von Zeuner, the bank’s group executive director, said: “The provisions of the Act require changes to both the process of applying for credit and the forms associated with credit application.

“In terms of whether or not we’ve seen an increase in the number of declines in the weeks since the Act came into effect, the answer is yes, we have.”The Act’s more stringent criteria mean that banks have to delve deeper into prospective clients’ credit histories.Von Zeuner said: “In addition to existing credit obligations, the bank also looks at all a customer’s monthly expenses, including things like school tuition, investment contributions, insurance payments, groceries, utility bills and service agreements.”A number of people who would previously have been given loans are now being turned away.

An agent from Mortgage SA said bond originators were becoming nervous about getting their clients home loans.The agent said: “The business is there but banks are declining many people. The process is much slower now and we are seeing backlogs because banks are taking longer to process information.”

Property economist Erwin Rode said: “In the longer run, the Act will help prevent a bubble situation in future years, so we must take the pain there is at the moment.”He said it was “never a good thing to give credit to people who can’t afford it — especially at the top of the (house price) cycle”.

Harry Nicolaides of Pam Golding said the Act would not have a long- term effect on the property market. 

Article from CyberProp