The Property Banks South Africa Property News
Posted: 5:05 pm, 13th March 2007, Will South Africa hold on to top spot?The property industry finds out next month whether or not SA property investment will hold onto its position as the global top-performer, with the much-anticipated launch of the 2006 Sapoa/IPD (Investment Property Databank) Property Index on Tuesday 03 April.
SA has attracted increasing attention internationally, thanks to the high returns posted by property in recent years. In 2005, the Sapoa/IPD Property Index showed that SA outperformed high-activity markets like Canada, Ireland and the UK. SA was in fact the only market in 2005 that achieved total returns in excess of 30%.
The million dollar question now is: can SA sustain its global first-place ranking in 2006, and sustain total returns at historical highs?
SA is up against some tough contenders.
The IPD has already announced the 2006 results for Denmark (17.8%), Canada (18.6%), and the UK (18.1%). Ireland, which posted total returns of 27.2% for 2006, will be the one for SA to beat.
"SA's 2005 results were not only the highest globally, but also the highest in the 11-year history of the IPD/SAPIX in SA," explains IPD SA research manager Kgaogelo Mamabolo.
"The question in our minds is this: can we see SA's returns go higher? Or was 2005 the peak of the current property investment cycle?
Property transfer duty left
untouched, 22.02.2007
The 2007 budget,
regarded as largely neutral from a direct property perspective, did
not include any further increases in the exemption threshold for
transfer duty on property transactions.
Property commentators expressed disappointment at this, as there had
been market expectations of a further increase.
Last year, Finance Minister Trevor Manuel removed transfer duty from
transactions involving the sale of houses worth less than R500 000,
as a response to the steep increase in house prices.
The year before last, there had been a more moderate increase in the
exemption threshold from R150 000 to R190 000.
Samuel Seeff, chairman of real estate group Seeff Properties, said
yesterday that "one would have hoped that together with the increase
in prices, we would have seen a further raising of the price barrier
in which properties could be transferred duty free".
Seeff said this would have assisted the country?s poorer people to
acquire properties.
Property economist Francois Viruly also expressed disappointment on
the transfer duty issue, saying more needed to be done to make it
possible for people to enter the formal mortgaged housing market.
"We are going to have to be much bolder in future budgets in
promoting home ownership," said Viruly.
Herschel Jawitz, CE of real estate group Jawitz Properties, said the
neutrality was largely expected because of the significant relief
offered in last year's budget.
However, Manuel said the national treasury was proposing that tax
depreciation allowances for the economic wear and tear of newly
constructed or upgraded commercial buildings be implemented.
SA's tax laws provide for the depreciation of buildings used in
manufacturing, but not for commercial purposes. A 20-year write-off
period is envisaged.
Evan Robins, head of fixed income at BoE, said this would encourage
the building of new properties and that this would be positive for
developers.