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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