SA Property Barons on the rise 13.10.2006
Johannesburg - It's no secret that South Africa's five-year housing boom has seen a significant increase in property ownership, particularly among first-time buyers. But the rate at which South Africans have been accumulating second, third and fourth properties has also accelerated markedly.
Latest Standard Bank figures show that close to 12% (nearly one in every eight) of all residential property sales recorded at the Deeds Office are going to buyers who already own at least one property.
That ratio has tripled over the past five years, up from 4% in 2000, and would typically include buy-to-let properties or holiday homes.
Standard Bank senior economist Elna Moolman says that investor participation in the housing market could be even higher if one strips out properties bought by the same people but registered in the name of different entities, such as companies or trusts.
Borrow against first property.
She says there's no doubt that the residential property market has lured large numbers of new investment buyers over the past two to three years on the back of significantly lower interest rates and healthy capital gains prospects.
Increased home values have allowed even middle-income earners to invest in more than one property by borrowing against the rising value of their existing primary homes.
Says Moolman: "The fact that SA's household debt repayment to income ratio is still not punishingly high, suggests that households have scope to further increase their exposure to residential property.
"The market also continues to offer double-digit price growth - albeit at a much slower rate than the 30%/year plus fetched in 2004 - which should encourage further money flow to investment properties."
Not only the wealthy.
The scrapping of transfer duties from March 1 on properties costing less than R500 000 could also see a new spate of investment buying over the coming months in lower- and middle-price brackets.
But property ownership hasn't only increased among wealthier South Africans who would typically be able to afford more than one property.
Standard Bank research shows that home ownership has risen quite sharply among most of SA's income groups.
Moolman says SA added about 3.3 million new home owners (older than 16 years) to its ranks between 2000 and 2005. That brought the total number of formal and informal home owners in SA to 24 million.
Mortgage debt balloons.
Some 74% of that figure - or 17.7 million - represents ownership of formal brick and mortar houses, with the remainder mostly squatter or traditional huts.
Moolman says that it's encouraging to note that the benefits of SA's growing economy and a buoyant housing market have been shared throughout the population and not solely by upper income groups.
Rising home ownership figures - particularly in the formal sector, where properties are financed through bank mortgages - are confirmed by latest mortgage advance statistics from FNB property strategist John Loos.
These show that the total value of outstanding mortgages ballooned by 130% over the past five years: from R232bn in January 2001 to R534bn in January this year.
By: Joan Muller for FIN24.co.za
Property in Observatory, Cape Town, South Africa on http://www.hotpropertyincapetown.com
Latest Standard Bank figures show that close to 12% (nearly one in every eight) of all residential property sales recorded at the Deeds Office are going to buyers who already own at least one property.
That ratio has tripled over the past five years, up from 4% in 2000, and would typically include buy-to-let properties or holiday homes.
Standard Bank senior economist Elna Moolman says that investor participation in the housing market could be even higher if one strips out properties bought by the same people but registered in the name of different entities, such as companies or trusts.
Borrow against first property.
She says there's no doubt that the residential property market has lured large numbers of new investment buyers over the past two to three years on the back of significantly lower interest rates and healthy capital gains prospects.
Increased home values have allowed even middle-income earners to invest in more than one property by borrowing against the rising value of their existing primary homes.
Says Moolman: "The fact that SA's household debt repayment to income ratio is still not punishingly high, suggests that households have scope to further increase their exposure to residential property.
"The market also continues to offer double-digit price growth - albeit at a much slower rate than the 30%/year plus fetched in 2004 - which should encourage further money flow to investment properties."
Not only the wealthy.
The scrapping of transfer duties from March 1 on properties costing less than R500 000 could also see a new spate of investment buying over the coming months in lower- and middle-price brackets.
But property ownership hasn't only increased among wealthier South Africans who would typically be able to afford more than one property.
Standard Bank research shows that home ownership has risen quite sharply among most of SA's income groups.
Moolman says SA added about 3.3 million new home owners (older than 16 years) to its ranks between 2000 and 2005. That brought the total number of formal and informal home owners in SA to 24 million.
Mortgage debt balloons.
Some 74% of that figure - or 17.7 million - represents ownership of formal brick and mortar houses, with the remainder mostly squatter or traditional huts.
Moolman says that it's encouraging to note that the benefits of SA's growing economy and a buoyant housing market have been shared throughout the population and not solely by upper income groups.
Rising home ownership figures - particularly in the formal sector, where properties are financed through bank mortgages - are confirmed by latest mortgage advance statistics from FNB property strategist John Loos.
These show that the total value of outstanding mortgages ballooned by 130% over the past five years: from R232bn in January 2001 to R534bn in January this year.
By: Joan Muller for FIN24.co.za
Property in Observatory, Cape Town, South Africa on http://www.hotpropertyincapetown.com
posted by Werner Property Agents at 6:24 pm
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