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28 Jan 2021 12:00 am
This week: Six factors hanging in the balance for property in 2021; firms need to question their approach to compliance; and Lockdown highlighted critical challenges on the independence of the judiciary.
South Africa - FNB
Housing market showed resilience in 2020: What's in store in 2021?
The pandemic had a profound impact on global output in 2020. Many economies experienced sharp recessions, unemployment spiked, and incomes stagnated. Yet, housing markets in major economies remained relatively unimpacted: we saw robust growth in buying activity and house prices continued climbing. This happened despite a rising number of infections and significantly weaker labour markets. Apart from pandemic-induced changes in housing needs (e.g., demand for bigger space to facilitate work-from-home), this disparity is explained by the sizeable stimulus packages (fiscal and monetary) deployed by different countries to fend off wider economic calamity. These included ultra-low interest rates, mortgage-repayment holidays and tax exemptions on property purchases. Naturally, these measures supported demand and, eventually, house prices.
South Africa’s experience has not been dissimilar. Industry-wide data continues to show robust home-buying activity. In fact, 2020 is set to register the highest volume of mortgage approvals in over a decade. This is despite relative caution from lenders: approval rates were lower in 2020 compared to 2019.
Activity is propelled by lower interest rates, attractive market pricing, lower transfer duties and the changing housing needs due to the pandemic. The improved affordability made buying property more attractive than renting. In part, this explains the rising vacancy rates and subdued rental escalations, as landlords struggle to hold on to their good quality tenants. Another explanation is that job losses were more prevalent in low-paying occupations and for those employed on a non-permanent basis, who would generally not afford to buy property. Thus, the impact of the pandemic is more visible on the rental market than on home-buying market.
Six factors hanging in the balance for property in 2021
South Africa - PropertyWheel
Few would have predicted that 2020 would turn into a successful year for property considering the technical recession and Covid-19. Thanks to an unexpected wave of buyers, triggered by low interest rates, motivated lenders and excellent value on the market, South African property has emerged in 2021 with its head held high.
The question is whether the market will retain its buoyancy. Schalk van der Merwe, franchisee for the Rawson Properties Helderberg Group believes the following factors could tip conditions either way.
Interest rates - The outlook is good.
“With interest rates taking the lion’s share of credit for property’s success in 2020, it stands to reason that they will continue to play an important role in 2021,” says Van der Merwe. “Thankfully, it’s looking very likely that low interest rates are here to stay for at least the first three quarters of the year, which means property finance is going to remain very affordable for buyers.”
Lockdown highlighted critical challenges on the independence of the judiciary
South Africa - de Rebus
Chief Justice, Mogoeng Mogoeng, said the lockdown, due to the COVID-19 pandemic, has highlighted several critical challenges, which impacted negatively on the independence of the judiciary and its possibility, not only to preserve its independence, but to also execute its judicial and administrative functions more effectively and efficiently. This was said in the 2019/2020 Judiciary Annual Report that was released on 8 December 2020. Chief Justice Mogoeng added that those challenges include the absence of full-blown court modernisation, rule-making authority, and a judiciary-led independent court administration.
Chief Justice Mogoeng pointed out that for years the judiciary has been working to get the court to the point where it would be able to function more effectively and efficiently. He said that court informatisation or modernisation has been identified as critical features of the project. He, however, pointed out that very little progress could be made, owing to underfunding and the State Information Technology Agency’s (SITA’s) initial inability to help the judiciary progress beyond having a concrete plan in place. Chief Justice Mogoeng added that the SITA blockage has since been removed and it was time to advance past the effectually circumscribed CaseLines experimentation stage, and progress towards implementing the pre-existing comprehensive and futuristic court automation plan.
Is your firm making these compliance mistakes?
UK - Today's Conveyancer
The subject of compliance has been at the forefront of many conveyancers’ minds in recent months. HM Land Registry’s support of digital ID, coupled with the Covid-19 pandemic driving a 33% rise in fraud in the first month of lockdown alone, has caused many firms to question their approach to compliance. Yet change can often feel like a big mountain to climb. At Thirdfort, we love taking a deep dive into firms’ compliance processes and dispelling all too common myths surrounding client onboarding and risk. Here are a few of the most common we hear:
‘If it ain’t broke, don’t fix it’
A lot of what we hear from law firms is that the ‘status quo’ has worked for them until now, so why rock the boat?
In reality, manual methods of client onboarding (whether this be certified copies, or verification over Skype/Zoom call in the current climate) are a ticking time-bomb for firms. Even this month, a firm was fined £14,000 for failing to carry out adequate due diligence – and they accepted a ‘certified’ ID document. What’s more, conveyancers/onboarding teams aren’t detectives, and often simply do not have the resources to spot the increasingly sophisticated fraudulent documents circulating at the moment.