Real Estate Investor Magazine South Africa March 2016 | Page 64

PROPERTY ALERTS

The
Bad

The
Good

Nkandla: Zuma
Proposes to pay back
the money

M

ore than six years into
the
Nkandla
scandal,
President Jacob Zuma on
Tuesday proposed a settlement in the
Constitutional Court case brought
by the opposition that would see him
reimburse the state for improvements to
his rural home.
The presidency said Zuma proposed
in a letter sent to the registrar of the
court that it order the finance minister
and auditor-general to determine an
appropriate amount to be refunded.
“To achieve an end to the drawnout dispute in a manner that meets the
public protector’s recommendations
and is beyond political reproach,
the president proposes that the
determination of the amount he is to pay
should be independently and impartially
determined,” the presidency said.
“Given the objection by one of the
parties to the involvement of SAPS,
as the public protector herself had
required, the auditor-general and
minister of finance be requested by the
court, through appropriate designees,
to conduct the exercise directed by the
public protector.”
Since
public
protector Thuli
Madonsela released her report Secure
in Comfort in 2014, Zuma has defied
opposition calls to comply with her
directive that he cover a reasonable
amount of the cost

62

MARCH 2016 SA Real Estate Investor

Thely
Ug

Weak economy puts
brakes on SA’s
property price growth

Interest rate hike dents
property sales

A

N

verage house price growth was
expected to slow from 6 percent
last year to 4.8 percent this year
and 3.8 percent next year because of
the poor economic environment and its
negative impact on household income
growth, according to First National
Bank (FNB).
FNB household and property sector
analyst John Loos said this would
translate into negative house price
growth after taking the impact of
consumer price index (CPI) inflation
into account, which would reflect both
the higher interest rate environment
and ongoing weakness in economic
growth, employment and household
income growth.
FNB reported yesterday that its
house price index indicated house
prices last month-increased year on year
by 6.8 percent.
Loos said the rate of increase
last month was very similar to the
revised growth rates of 6.7 percent in
December, 6.9 percent in October and
6.8 percent in November.
He said this suggested the year-onyear house price inflation was “in a
peaking phase after an earlier mild rise
from an April 2015 low of 5 percent”.
Loos added that the rate of increase
in house prices on a month-on-month
seasonally adjusted basis had already
been slowing since October

ew vehicle and house sales,
the two big ticket items of
households, are set to be dented
by the latest hike in interest rates and
expected further rates increases this
year.
Azar Jammine, the chief economist
at Econometrix, said on Friday that the
0.5 percentage point increase in interest
rates by the Reserve Bank last week
would undoubtedly be negative for new
vehicle sales.
However, Jammine said Econometrix
had left its new vehicle sales forecast
for this year unchanged because it
incorporated last week’s interest rate
hike and a further 1.5 percentage point
increase in rates over the course of this
year. Econometrix has forecast year-onyear decline in car sales of 5 percent to
10 percent this year.
Jammine was not as pessimistic
about the prospects for the residential
property market this year, stressing the
trend was not that poor.
“There is some growth and clearly
there is still a shortage of housing in the
country. With the fall in the rand an