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| Taj Cape Town to Open in Grand Style in January |
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Taj Cape Town, the new luxury hotel in the city centre, had barely opened its grand doors and Capetonians were drifting into the hotel at the top of St George’s Mall to sample the food, drink and general experience.
Sales and Marketing director Theo Cromhout said although the opening is mid-February, the hotel is taking limited reservations and bookings and welcoming the general public into the food and beverage outlets. The 176-room hotel is a joint venture between Tata’s Indian Hotels Company and city centre developers Eurocape. It is located in the original South African Reserve Bank and the Board of Executives buildings, opposite the Company’s Garden and St. George’s Cathedral.
The restoration process included the addition of 17 storeys, with walk-out balconies and splendid views over the city. Investment in the two-year project topped R500 million.
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| Solid Economic Growth for South Africa in 2010? |
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Although likely to remain subdued in the opening months, there is a good chance that economic growth could be surprisingly solid, with South Africa ending 2010 with annual GDP growth of over 3%, predicts Old Mutual chief economist Rian le Roux.
"The combination of a recovery in consumer demand, ongoing robust public sector spending, an end to the cycle of destocking, moderate export gains and the 2010 Fifa World Cup, could combine to generate a surprisingly robust acceleration in growth during the middle quarters of 2010," le Roux said in a statement.
"We could even see another interest rate cut from the Reserve Bank adding to the positive conditions, should inflation surprise on the downside and the rand remain strong."
According to le Roux, global recovery is solidly underway and he believes the risk of a "W-shaped" downturn is relatively small.
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| Good and Bad News for House Prices |
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There was good news and bad news for house prices, FNB said on Monday when it released its house price index.
The average house price for 2009 declined by -3.9 percent for the year as a whole, when compared to the average price for 2008.
However, the good news was that late in 2009 the index showed a trend indicating improvement, with December 2009 showing a further rise in year-on-year house price inflation to record +2.7 percent.
"While still nothing to be over-excited about yet, the trend points towards a significantly better 2010 for those of us involved in the residential property market, and an eight percent average house price inflation is projected for the year as a whole," FNB's property strategist John Loos said.
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| FNB House Price Index Improves Further |
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The FNB House Price Index showed a second consecutive monthly improvement, rising 2,7% in December from a revised 1,4% (2%) in November. The index registered a -0,9% decline in October.
FNB said in a statement on Monday that the House Price Index average for 2009 showed a decline of -3,9% compared with the average value for the previous year. This is significantly worse than the +6,9% inflation of 2008, and a far cry from the +29,5% average price inflation registered in 2004, which proved to be the best year of last decade.
FNB said in a statement that while it had been a dismal 2009 as a whole, on a monthly basis the index pointed to steadily improving times as the year drew to a close.
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| Get a Property Market Overview of 2009 |
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So what is the verdict on 2009 from a residential property perspective? Was it as calamitous as 2008 and what's in store for 2010?
"2009, although possibly the worst year in the South African property sector since the 1939/1945 recession, was not the total disaster that many doom and gloom pessimists had predicted it would be in the first two months of the year," says Lanice Steward, MD of Anne Knight Porter Frank (APKF).
Drawing heavily on the recently updated FNB Global Economic and South African Property Reviews, Steward said that several sets of figures support her contention that the South African residential sector is now coming out of its recession and is set for a better year in 2010.
"First, we have to look at the IMF forecasts for the world economy in 2010. IMF anticipate a China-led revival giving a 5,1% growth in GDP overall, with even the USA at last in positive territory with a 1,5% growth, while the G4 growth will be at 2% plus.
"Second, in South Africa the year-on-year (y/y) decline in commodity values (on which we are heavily reliant) has now bottomed out and prices are on the up once again. A similar trend appears to be evident in many of our exports.
"Third, South Africa's Leading Business Cycle Indicators, boosted by the lower interest rates and the recovery of the global economy, have been rising since March this year.
"Fourth, taking these and other factors into account and the recent unexpected rise in GDP after nine months of decline, economists are now looking forward to a 2% GDP growth in 2010. This is by no means spectacular, but if I understand the experts right, it could usher in higher growth in 2011.
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| Rate of House Price Growth Accelerating |
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Absa says there is a prospect of price deflation of less than 0.5% for the full year. Nominal year-on-year house price growth in the local housing market picked up further in November 2009, Absa said on Monday.
The bank said there was a prospect of price deflation of less than 0.5 percent for the full year.
After adjustment for the effect of inflation, house prices continued to decline in real terms up to October this year, albeit at a slower pace, property analyst Jacques du Toit said.
House prices in the middle segment of the market were up by a nominal 4.7 percent year-on-year to R1,006,300 in November, after increasing by a revised 3.4 percent year-on-year in October, he said.
Month-on-month price inflation came to 0.9 percent in November.
Du Toit said that in real terms, middle-segment house prices were down by 2.4 percent year-on-year in October, compared with a decline of 3.9 percent year-on-year in September after revision.
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Welcome to the most expensive apartment on the African continent, One&Only Penthouses
Welcome to the most expensive apartment on the African continent – and one of the most original. This is the breathtaking 1 358m2 property that its owner paid R110-million for – and then singlehandedly transformed into an homage to globetrotting glamour. For, besides the sheer sumptuousness emanating from every corner, there are also a few of her favourite pieces that she’s collected on her travels around the world, special items that remind her of adventures in the Far East, Europe, the Americas and beyond. The owner has taken a curatorial approach to design by grouping, having themed and packaged her globe-trotting collections – with the home’s success driven by a clever duality that appeals to the eye as much as the heart.
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| 2010 Property Predictions: Don’t Expect Double-Digit Returns |
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Those South African property watchers who are predicting significantly improved conditions in 2010 are by and large unrealistic, says Mike Flax, Executive Director of Redefine Properties.
South Africa is following the rest of the world out of its recession, but the property cycle traditionally lags a year behind the general economy and the first year in which conditions start improving can often be as difficult for the property sector as the recession.
The reason, says Flax, is that it takes time for the secondary effects of the recession to make themselves felt.
Although there are now clear signs that the South African economy has at last turned the corner, tenants (in all walks of life) will in the recovery period still suffer from the job losses and expenditure cut-backs which the recession made essential. In the retail sector vacancies in both malls and the high street, we have found, tend to be as serious in the initial upturn as in the downturn phases.
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| Investor Note on National Budget Mauritius 2010: Foundations for a Bright Future |
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Inclusive, empowered and resilient growth over the last four and a half years have transformed the Mauritian economy and now prepare the way for a bright future.
The National Budget 2010 provides comfort to the investor community that the country will return to its growth path of over 5% p.a by 2011. In the face of the world’s most severe crisis, Mauritius has managed to come out relatively unscathed with a reasonable growth rate of 2.3% in 2009 and around 4% in 2010. The Mauritius financial services sector has faired relatively well despite the crisis. ICT and IT-enabled services have grown significantly becoming a larger GDP contributer than sugar. While textiles and tourism have suffered with the crisis, the number of tourist arrivals is expected to pick up in 2010 and textile, which was on a recovery path just prior to the crisis, should also show some improvement.
| Board of Investment Mauritius , 19-11-2009 |
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| Do Not Skimp On Home Insurance |
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The financial difficulties that many homeowners have experienced over the last year or more have led to some reneging on their home insurance payments, but this should be avoided even if it means making drastic cuts elsewhere.
So says Lanice Steward, MD of Anne Porter Knight Frank, who adds that although taking out an insurance policy is usually obligatory if the home is bonded, it sometimes happens that this is overlooked if there is no registered bond.
Sometimes, said Steward, the property's insurance policy will have lapsed because it was linked to the bond, which has then been paid off without the bondholder realising that this has resulted in his policy being cancelled.
"Prior to taking transfer, the buyer must make sure that he knows when the insurance risk passes to him. This can be on occupation or on taking transfer. Sometimes, the buyer is not aware of this and finds himself a few weeks down the line the owner of a damaged or burnt out home which is not covered by insurance."
Sometimes, said Steward, the property's insurance policy will have lapsed because it was linked to the bond, which has then been paid off without the bondholder realising that this has resulted in his policy being cancelled.
These warnings, she added, have gained a new relevancy in the light of the latest evidence that global warming will make the Western Cape hotter, drier and windier – and more prone to floods and storms.
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