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1 week ago

The recent repo rate cut of 50 basis points brings the cumulative repo rate reduction in the current rate cutting cycle to 3 percentage points.

Meaningful property demand boost emanating from interest rate cutting specifically is not expected, but it is still believed to be an important source of support for the property market. In the current deep recession, with business confidence at multi-decade lows, the support from interest rate cutting comes more in the form of financial relief for current property owners, which can be important in curbing the extent of growth in property supply on the market, by slowing the rate of financial pressure-related property selling by businesses.

SARB rate cutting stimulus not expected to boost property demand meaningfully

The SARB (South African Reserve Bank) 50 basis point interest rate cut brought the cumulative repo rate reduction in the current interest rate cutting cycle to 3 percentage points (starting in July 2019), with the cut being from 4.25% to 3.75%. This will take Prime Rate lower from 7.75% to 7.25%.

The bank sees no significant inflationary pressure build up at present, with its CPI inflation forecast of 3.4% for 2020 being near the lower limit of the 3-6% target range.

Despite very significant interest rate reductions, however, any visible signs of a commercial property demand “jump” is not expected to be taking place that could be ascribed to interest rate reductions.

Any increase in property demand later in 2020 will merely be the effect of the country coming out of lockdown, and normal property trading being possible once again. But total property trading volume for 2020 is expected to be significantly lower than 2019, and new mortgage lending also experiencing a significant decline for this year compared to 2019.

FNB have projected a drop of -7% in the MSCI All Property Value/Square Metre Index in 2020, which will not be a sufficient valuation decline to restore the demand-supply balance during this year, the market thus expected to be oversupplied in the near term.

FNB’s expectations are based on the perception that the commercial property market is influenced to a great extent by economic growth conditions and business vonfidence, and while the SARB forecasts low inflation, justifying major rate cuts, it also forecasts a -7% contraction in GDP (Gross Domestic Product) for 2020 (The FNB forecast being an even more severe -8%.)

It’s not that FNB doesn’t believe the interest rate cutting stimulus would have any impact on the property market. It will, just that the negative GDP shock is so severe that it is expected to over-ride any property demand stimulus received from interest rate cutting.

The economic shock has dented already-weak business confidence so severely that few will be looking to take advantage of rate cuts to purchase property.

but rate cutting is seen as crucial relief for owners, containing the growth in supply of property on the market

However, FNB does see aggressive interest rate cuts as having an important function in the property market, but perhaps more on the supply side of the market.

Rather than bolstering property demand, the key role of rate cuts at present will be in providing relief to current property owners. Many property owners are likely to be under intense financial pressure in the near term, either as a result of their own business pressures or as a result of a larger part of the business tenant population’s financial squeeze and resultant battle to pay rent. Cutting costs on property owner debt is thus crucial. And this may impact more significantly on the supply-side of the property market than on the demand side, containing the number of property owners being pressured into selling their properties due to financial pressure, to lower levels than would otherwise have been the case. Severe business financial pressure risks “flooding” the market with properties, but aggressive rate cuts can curb the growth in such property supply.

The rate cuts probably won’t be sufficient to prevent a significant oversupply of property in this economic environment, but FNB believes that the supply glut may have been headed for far higher levels had there hypothetically been no rate cuts.

At the same time, rate cutting can relieve the financial pressure on the beleaguered tenant population who often have other forms of debt, supporting rental payment performance, thus making a difference, but again not necessarily being enough to fully offset the impact of lockdown and recession on tenant income.


In short, the 300 basis points’ worth of interest rate cuts in the current interest rate cutting cycle has likely provided significant support for the property market, and the SARB macroeconomic model suggests more rate reduction is possible. However, in this severe recession, the stimulus impact will go largely un-noticed, overshadowed by the negative recession impact.

Interest rate cuts will not likely be a meaningful property demand stimulus at the current time. Their impact is more one of relief for current property owners, curbing the level of property supply that could be driven onto the market by financial pressure. It is thus on the supply-side (containing supply growth) of property where their role may currently be more meaningful for the property’s market’s balance.

1 week ago
Two of Belgotex’s popular modern vinyls have been updated to offer more colour, comfort and choice.

The updated colour selection and new sizes in Belgotex’s Penninsula and Portland LVT collections offer a hardwearing, natural-looking and cost-effective flooring solution.

As a soft flooring specialist, Belgotex’s popular LVT collections have always had your home and décor spaces, as well as high-impact commercial zones, covered.

Now two of their modern vinyls have been updated to offer more colour, comfort and choice – with the same warranties, guarantees and service you’ve grown to trust.

If you’re after a hardwearing, natural-looking and cost-effective flooring solution, Belgotex’s updated colour selection and new sizes will make your decision a simple one.


Belgotex knows how important it is to create new products that improve your life. And they’re equally committed to making their existing products even better. Available in an extensive range of finishes and based on a variety of different timbers, Penninsula offers textured planks for a more rustic appearance, or a smoother look for more contemporary style. And irrespective of whether your home is traditional, modern or your own unique design, the wide colour palette will suit any environment.


Because Belgotex believes in the beauty of wood without the cost to nature and your pocket, Portland is a highly durable collection with an ultra-realistic wood look. Featuring a natural wood grain texture in either straight, curly or wavy grain patterns, and even the occasional band-sawn effect, it will add warmth, depth and authenticity to your space. A contemporary colour range will completely change the look and feel of your interior into a place where you can reconnect with your authentic self.

With Penninsula and Portland, every time you enter your house, you’ll know that you’re home.

The post TWO MUCH LOVED VINYL COLLECTIONS GET A 2020 REFRESH appeared first on Leading Architecture & Design.

1 week ago
Evalution Flooring has embarked on a sustainability that will enable zero waste to landfill in the LVT flooring arena.

Evalution Flooring has joined forces with Recycle 4 Africa Waste Management (R4AWM) to recycle offcuts and uplifts by transforming them into eco-bricks and pavers.

As COVID-19 cases continue to rise across the globe, causing many people’s daily lives to come to a standstill, the internet is also abuzz with news about the surprising benefits of the outbreak on the environment. For example, the temporary restrictions of air and car travel has led to cleaner air, and the once murky canals of Venice have recently become clearer. The strict lockdowns in certain countries have also contributed, at least in part, to a noticeable drop in pollution and greenhouse gas emissions.

But there is a flip side. It has also led to more use of single-use plastics, which will ultimately have a major effect on the environment.  What’s more, the pandemic has led to the delay or abandonment of many environmentally sustainable programs around the world. Many restaurants internationally are no longer accepting reusable containers. Most recently, Starbucks, the coffee giant known for selling upwards of 4 million cups of coffee a day, announced a temporary ban on using reusable cups.

While many companies are dedicating every resource they have to not only help their customers, but to simply survive during these tough times, it is also important to consider our environment during and after the pandemic.

Leading the charge for local businesses making positive changes and developing sustainable innovations is Evalution Flooring, the first luxury vinyl (LVT) flooring supplier in South Africa with a GreenTag Certification on its internationally recognised flooring ranges of Amtico and mFlor. The company has embarked on the first phase of a sustainability project, a first of its kind in South Africa, that will enable zero waste to landfill in not only the LVT flooring arena but also recyclable and non-recyclable waste as a whole.

As part of its campaign to minimise its carbon footprint, Evalution has joined forces with Recycle 4 Africa Waste Management (R4AWM) to recycle offcuts and uplifts by transforming them into eco-bricks, pavers and potentially other re-usable products in the future. Thanks to some extraordinary progress, the first containerised unit to recycle material and create these eco-bricks has been set up at Grandwest Hotel Complex.

R4AWM has provided the containerised waste management unit (CWMU) systems, with more being manufactured as needed. It works by putting waste into one side of the unit to be pulverised, heated, mixed and blended. A binder is then added and the mixture is poured into moulds, which are then cast into blocks or pavers. Anyone who has had training by R4AWM on manufacturing the blocks can use the machine. The container is equipped with the technology to convert non-recyclable or contaminated waste into enviro pavers and blocks. A heat box and mixing system is included in the container to remove bacteria.

When asked what this exciting development meant for sustainability in the industry, Eva Kaiser, founder of Evalution Flooring, said: “Containerised waste management units will convert waste into viable building products and convert waste products from every industry into a generator of income for clients. All industries that generate waste can, and should take advantage of eco-bricks.”

The benefits of enviro blocks for businesses speak for itself. These blocks can be used in building strong, sustainable single-story structures, which is not only more energy efficient, but cost-effective, as the production process is cheaper. Also, the benefits these types of developments will have on our environment are huge. By adding value to all waste, it can be re-used and the environment will clean itself.

Kaiser also has strong thoughts on how this can be adopted into décor businesses to minimise landfill waste. “The product produces something called Enviro Aggregate, which can be cast into a variety of building products like water features, bird water baths, countertops etc. The imagination is all that limits the casting process. We have chosen blocks and pavers as these containers were originally designed for the rural areas to convert waste into blocks and provide employment at the source of waste generation. So, blocks in this context would be the most suitable finished product.”

Kaiser further explains that eco-bricks are suitable for urban and rural environments. “The use of CWMU’s would provide a sustainable employment opportunity for the youth and small businesses. The business concept provides for the upliftment of communities by leasing the containers or providing grants for the purchase of the CWMUs.”

“Considering what the COVID-19 pandemic is doing to our world, I think it’s important that we take the opportunity to start cleaning up our environment and reducing landfill sites. With the CWMU’s, landfill sites could be vastly reduced, ensuring cleaner environments and better air quality. There are guarantees provided for the recyclable materials through the R4AWM company, including long-term business opportunities and suitable incomes to those in our community,” concludes Kaiser.


The post FIRST ENVIRO BRICK UNIT LAUNCHED AT GRANDWEST HOTEL COMPLEX appeared first on Leading Architecture & Design.