Archive for the ‘News’ Category
Median House Prices Down 4,6% for October
It seems as though the residential property market might be stabilising and that interest in residential property is returning. Standard Bank’s property book January to October 2009 revealed an average monthly decline of 4,3% in the median house price, making it the 17th consecutive month of declines.
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2010 Predicted to be a Good Property Year
It seems as though people are more positive because the affordability levels are back to around the 2007 levels. Banks will grant more in mortgage finance because of the fallen interest rates since December.
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The Internet’s Influence on the Housing Market
More and more potential homebuyers are using the internet to search for their ideal house. The internet helps you to search and investigate the whole residential market until you cut down your choices to only a few you physically have to see.
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Nedbank to give 100% home loans
Following in its competitors footsteps Nedbank has decided to relax its deposit requirements for home loans and in certain circumstances grant 100% home loans. Nedbank’s decision comes as no surprise as Absa announced last month that they will consider approving 110% mortgage bonds to clients who earn less than R11,000 per month. Absa was the first Bank to provide relief to people in the low-income bracket.
Following a tough 18 months for people selling their properties and estate agents this positive news is a welcome sign of improving economic conditions. The past year and a half witnessed thousands of property industry jobs being shed due to the dramatic drop in sales volume in the property market. Read the rest of this entry »
FNB cuts prime lending rate to 10.5%
14 April 2005
First National Bank (FNB) today announced the reduction of its prime lending rate by 0.5% from 11.0% to 10.5%. The new rate will take effect on Monday 18 April 2005 on all prime rate linked products.
Interest rates for new and existing FNB HomeLoans will also be reduced by 0.5% on Monday 18 April.
“The cut is a vote of confidence in our stability and growth sustainability,” says FNB CEO Michael Jordaan. “It is good news for all South Africans. Rates were last at these levels in February 1981 when prime was 10.75%, exactly 24 years ago. Prior to this, the all-time low was 10% in July 1974.”
“Unlike the volatile boom-and-crash conditions of the mid-70’s and early 80’s, the economy has now entered a golden era of low inflation with sustained growth and new jobs,” adds Jordaan.
The bank noted that consumers remained disciplined when taking credit for purchases and that while credit use had increased during the past 12 months, indebtedness remained at moderate levels.
“Lower inflation means lower annual salary adjustments and an effective increase in the real rate of interest. We are seeing maturity in consumer’s borrowing decisions,” says Jordaan.
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Nedbank Home Loans Announces A Restructuring
18 May 2005
The extensive restructuring and the re-establishment of a dedicated Nedbank Home Loan business unit has resulted in a marked decline in the bank’s loss of home loan market share compared to that of five months ago.
“The dissolution of Nedbank’s dedicated home loan unit some years ago blurred the bank’s focus on cost structures and service support levels around home loans,” says June Tudhope, Nedbank Home Loans managing director, who took over the newly created division last October.
The creation of a stand-alone division to drive the strategy around the entire home loan process, from point of sale to that of registration, testifies to Nedbank’s commitment to home loans. A newly created executive management team of seven and workforce of 939 is also evident of the directors’ pledge for the bank to cater for all people.
In the past, poor service levels, cumbersome and slow internal processing, particularly of valuations and automated credit assessments had allowed other banks with more advanced technology, faster processing, and quicker approval times, to take the lead. Mark Danckwerts, Process divisional general manager, and Eugene Drotskie, Operations divisional general manager, have been tasked to place the bank among the forerunners in this strongly competitive arena.
Nedbank Home Loans’ credit and risk profiling is now being reviewed to align this with the bank’s market profile and Pieter van Heerden, Value Analytics divisional general manager, has been tasked with this responsibility.
To address staff challenges associated with the division’s restructuring, Diana Musara has been appointed Strategy, People, and Projects divisional general manager. Nedbank Home Loans believes that building a motivated team with a sound strategy implemented through effectively managed projects, can only improve service levels and assist with market share growth.
In addition, Nedbank’s complete range of home loan products has also been carefully assessed against those of its competitors with acceptable results. Nedbank Home Loans is now focussing on the affordable housing market, equity release products and the fine-tuning of some existing products. Lindiwe Mbongwe (nee Kubeka), Innovation and Development divisional general manager, has been tasked with addressing these areas of focus.
Greg Salter, Home Loans chief financial officer, will be keeping a close eye on the division’s financial performance and will be providing the management information to enable the team to track progress, and ensure that Home Loans’ strategic imperatives are implemented.
According to Tudhope, lending volumes from the buy-to-let home loan – another market first by Nedbank – slowed in the first quarter, which is an indication of the growing risk involved in this market. Other first quarter trends include a lowering in Nedbank’s average size of loan in the upper and affordable housing markets.
“Although 60 percent of the bank’s home loan business is being sourced through mortgage origination channels we are contemplating reinstating Nedbank’s direct distribution channels to estate agents and developers,” Tudhope continues. “This is in line with the current industry balance of about 30 percent of all home loans being directly sourced from these two channels.”
Given the current momentum of the division, Tudhope’s team is cautiously optimistic of the division “turning the corner” by the third quarter and placing Nedbank Home Loans on an equal market footing with its competitors early next year.
Online Home Loan Application
As published on the Nedbank website
Standard Bank Helps SA Home Loans Take Securitisation Into New Territories
June 14, 2005
South African Home Loans* (SAHL) will soon be launching another exciting innovation for the South Africa securitisation market: the first listed residential mortgage warehousing conduit, the Thekwini Conduit, arranged by Standard Bank.
SAHL was the first South African mortgage originator to tap the public residential mortgage backed securitisation market when it launched Thekwini 1 in November 2001. Subsequently, SAHL has completed four further successful issues, constantly setting new market benchmarks in terms of both pricing and volumes.
The Thekwini Conduit, which has been sized at R15 billion and has been rated by Fitch Ratings, will provide SAHL with access to short-term money market funds, enabling it to diversify its warehousing funding and benefit from more competitive funding rates. SAHL will, however, continue with its long-term Thekwini programmes in parallel to the Thekwini Conduit, expecting to launch Thekwini 6 in the last quarter of this year.
“With the establishment of the Thekwini Conduit, SAHL will secure yet another source of sustainable funding to support the continuing growth we are experiencing in our home loan book. Furthermore, it provides us with an opportunity to respond to investor demand that we’ve identified in the short-term market. We have strong relationships with our investors and pride ourselves as being at the front-runner in bringing ground-breaking products to the market,” says Kevin Penwarden, SAHL’s Chief Executive Officer.
The Thekwini Conduit provides money market funds with an exciting new investment, backed by a diversified asset pool. AJ Rothman, Director of Securitisation at Standard Bank, the arrangers of the Thekwini Conduit said: “This transaction brings a number of new technologies to the South African securitisation market and demonstrates again just how sophisticated this sector of the South African capital market has become. We are unaware of this technology being utilised in any other country other than the United States.”
Some of the new features that the Thekwini Conduit introduces to the market are: a high degree of flexibility as the Thekwini Conduit is able to issue both long and short-term notes giving investors the opportunity to invest in notes rated F1+(zaf), F1(zaf), F2(zaf), A(zaf) or BBB(zaf). Further, the notes may be listed and/or unlisted depending on investor requirements. Innovatively, the Thekwini Conduit will also be the first to issue liquidity notes. This enables SAHL to further reduce its reliance on bank facilities.
SAHL intends issuing the first tranche of notes from the programme at the end of June 2005 through Standard Bank’s money market desk.
* Standard Bank is a shareholder in SA Home Loans.
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SARS Can Delay Your Property Transfer
June 22, 2005
According to an article on the Business Day Website, SARS will be able to delay the transfer of your property if your tax affairs are not in order.
The new regulation, that came into effect last month, will affect all taxpayer, from induviduals through to companies. Lindsay Williams asked Peter Frank, SARS Law Administrator, to explain about the new law and why it has been introduced.
Peter replied that the Deeds Office is going electronic soon and it was logical for them to go electronic as well – as far as transfer duty is concerned. They noticed that a large number of wealthy people bought properties without their tax affairs being in order.
What happens now is that when your transfer duty declaration comes in, SARS will check it against your tax record. If there are any problems, SARS will contact you and help you sort out any problems before the transfer can take place. Once the propblems are sorted out, the transfer will go through.
Read the complete article online at the BusinessDay website.
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Standard Bank ranked No.1 in sub-Saharan Africa
July 11, 2005
Standard Bank has been ranked No. 1 in sub-Saharan Africa in The Banker Top 1 000 World Banks 2005, an annual ranking of the world’s commercial banks.
Standard Bank is now ranked No. 108 in the world, up from 116 in 2004.
The rankings are based on Tier One capital as defined by Basel’s Bank for International Settlements. The definition is more strict than total stockholders’ equity and covers only the core of the bank’s strength; the shareholders’ equity available to cover actual or potential losses.
The object of the survey is to show the banks’ soundness in relation to the Basel requirement of minimum Tier 1 capital on risk-weighted assets of 4% and a minimum ratio of capital to risk-weighted assets of 8%.
The Banker (www.thebanker.com) is the global monthly banking magazine of the Financial Times Group and was first published in 1926.
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Is it worth it to fix your home loan for 20 years?
August 15, 2005
With SA Homeloans Varifix, you now have to option to fix your home loan for a period of 20 years. There are some important things to keep in mind before signing up for such a long term.
The current Varifix rate is set at about 12%, whereas SA Homeloans and most of the larger banks currently offer between 8.5% and 9.1% on variable loans. This means that if you do fix your rate, interest rates must increase by at least 3% before you will start to break even.
Taking the current economic situation into account, chances of interest rate climbing so much in the near future are slim, but nobody can predict what will happen in 10 or 20 years’ time. Keep in mind that inflation is relatively stable right now, so there is no immediate need to increase the current interest rate.
Keep in mind that if you were to simply increase your monthly repayment to the amount you will have to pay for the new Varifix product, you would have to pay almost R600.00 extra per month on a R300 000.00 bond. That would also mean that you could pay off your bond in only 12 years instead of 20. This would save you about 40% in interest charges during the 12 years (just above R140 000.00 on a R300 000.00 bond).
If you are the type of person who really prefers security, then this might be a great option. In the end, it is still up to you to decide what is best for you and what you are comfortable with.
To read more about Varifix, visit SA Homeloans at www.sahomeloans.co.za
If you would like to apply for a much lower variable interest rate, try SecuBond Mortgage Originators who will find you the best rate at the four leading banks.
