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Recession fears fade as South Africa ’ s GDP data show growth
S outh Africa recession fears fade as manufacturing and mining sectors output rebounded , with the gross domestic product ( GDP ) data for the second quarter of 2016 showing growth of 3.3 %.
This follows a dismal first quarter , where the economy declined by 1.2 %. This marks the fastest pace of growth for South Africa since 2014 , Statistics South Africa ( Stats SA ) said in a report released on Tuesday .
The largest positive contributor to growth in GDP in the second quarter was manufacturing , which increased by 8.1 % and contributed 1.0 percentage point to GDP growth .
“ We hope that these signs of growth are an early indication that the manufacturing sector , which is essentially still fragile , can move towards stabilising and strengthening . We , however , always need to be cognisant of external factors which impact on local and global demand and , therefore , manufacturing output ,” industry body Manufacturing Circle executive director Philippa Rodseth said .
Mining and Quarrying recovered in the second quarter , increasing by 11.8 % and contributing 0.8 of a percentage point to GDP growth .
Sectional-title transactions slow as firsttime buyer pool shrinks
South Africa ’ s mounting urban land and infrastructure scarcity has been key not only in a drive towards smaller average sized properties , but also towards a more significant portion of sectional title homes , as we look to utilise land and infrastructure more economically .
In an attempt to measure the progress of the sectional title segment ’ s growth , we use deeds data transactions by individuals only ( natural persons ), which we believe should be a good proxy for residential transactions by individual households .
Here , we see the number of sectional title transactions having increased in significance since 2010 after a 2008 / 8 recession dip .
Smoothing the data with a six month moving average , we see sectional title transactions volume having risen to 29.9 percent of total property transactions by individuals by May , from a cyclical low of 23.7 percent late in 2010 .
The relative recovery in sectional title transaction volumes more or less coincided with a post-recession recovery in first time buying levels from around 2010 , with the more cyclical first time buyers believed to be a significant source of smaller sectional title homes .
South Africans owe billions in debt that they simply can ’ t pay
S outh Africans owe municipalities billions of rands in debt for basic services such as electricity and water – which has been outstanding so long , that it ’ s not realistically collectable .
Worse yet , with the current economic path the country is taking , consumers are set to face added pressure in the fourth quarter .
According to the latest Local Government Revenue & Expenditure report by National Treasury , South Africa ’ s eight biggest municipalities are owed over R56.7 billion by households and businesses .
The outstanding debt is attributable to unpaid fees for municipal services such as electricity and water . Three quarters of the total is overdue by 90 days or more .
The City of Johannesburg is the biggest culprit , where just over R16 billion is owed . This is followed by Ekurhuleni , where residents and businesses owe R11.9 billion .
The data shows that households in metropolitan areas account for R35.6 billion or 62.7 % of outstanding debt to metros , followed by businesses which account for R17.7 billion or 31.1 %.
Debt owed by government agencies is approximately R1.7 billion or 2.9 % of the total outstanding debt owed to metros .
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40 OCTOBER 2016 SA Real Estate Investor www . reimag . co . za