Residential property rebound by 2010?

[garthu]

Spot on!!

[garthu]

It is beginning to be clear, says Tony Clarke, MD of the Rawson Properties Group, that a main reason why mortgage bonds are now so difficult to obtain is that certain banks are now simply refusing to accept bond applications from originators.
*
Clarke said that he was recently told by a bank executive that that bank now believes the cost of applications through an originator to be too high.

Interesting comment, one i have mentioned before somewhere. There is a lot more to the article, but this didn't come as a surprise from what i have seen in the market

[Darko]

Do you know what percentages of homeloans granted were (say 1.5 yrs ago) originated through MO vs in-house? And is fo, does this drop-off equate to similar percentages?

I'm just trying (out of interest) to determine whether the originator is the reason behind this (or at least, most of the reason) or if it's something else.

[garthu]

Off the top of my head (so dont quote here please!!) i think 70% of approved loans were via MO, we would get around 70-80% overall approval in general.

Problem is at the moment these figures cant really be quoted as some MO only take deals they know will work and therefore get 70-80% whilst some take everything they do get and send through so around 25%.

What the banks are passing on there side on direct applications i have no idea at the moment but what i have seen is guys who have gone direct have been pretty successful, thats something we used to frown upon (we lose control over the transaction for various legal reasons), right now it could become frowning if they not prepared to go direct

2 of the banks have made it pretty clear, without stating it (legal reason there i know of) that they will deal directly with the client, one of them will only look at current clients and not others.

Doesn't really give indication, but the signs are there

[Dave A]

House prices are continuing to decline, due to a sizeable oversupply that has built up in the residential market, FNB said on Monday.

Its latest house price index continued to decline in May to -11,3% year-on-year, it said in a statement.

This represented a deterioration on the revised -9,2% rate of year-on-year decline recorded for April.

It was also the sixth consecutive month of year-on-year decline in the house price index, FNB said.

On a month-on-month basis, the rate of deflation was minus three percent in May.

The deflation was a result of oversupply, with selling due to financial pressure being a key driver of supply, FNB added.
full story from M&G here

It's the first time I've felt these pricing trend figures are showing anything close to the pain that is actually being experienced in this market.

If you read the article, predictions are of worse property price figures to come. Why do they lag the actual trend like this?

[Dave A]

Property prices remain under pressure.

A quick turnaround in the housing market was "improbable", Standard Bank said on Thursday as it released its latest Residential Property Gauge.

"Standard Bank's property book for the first nine months of 2009 revealed an average monthly decline of 4,2% in the median house price.

"This brings the number of monthly declines to 16 consecutive months," it said in a statement.

The September smoothed (random fluctuations removed) data yielded a rate of contraction of 5,2% year-on-year, the same decline as in August.

In real terms (inflation factored in), using its estimate of the CPI in September to deflate nominal house prices (inflation not accounted for), the decline in real house prices came to approximately 11,5%, Standard Bank said.

The smoothed growth rate for September showed that the value of the median residential properties financed by Standard Bank was R550 000.

Looking ahead, Standard Bank said important drivers of overall growth in the economy, such as the level of household income and debt, as well as the medium-term economic and financial outlook, were such that a quick turnaround in the housing market was improbable.
full story from M&G here

[Marq]

Middle-segment house prices were down by 3,4% year-on-year (y/y) to around R933 300 in August 2009 (-3,7% y/y in July and -3,8% y/y in May after revision). On a month-on-month basis, prices were up by a nominal 0,2% in August, after a marginal increase of 0,03% was recorded in July. In real terms, prices were down by 9,7% y/y in July this year, after declining by 10% y/y in June.

- So says the absa man last month here

The smoothed growth rate for September showed that the value of the median residential properties financed by Standard Bank was R550 000.

So what is the Standard bank actually saying.....
Smooth growth rate in a declining market?
They are only financing 60% of property values?
They don't agree with with absa's numbers?