The information in this article is courtesy of The Property Magazine (Foreigners snapping up rentals in Camps Bay, Clifton and Bakoven – November 2008)
According to The Property Magazine there is a huge demand for quality long-term rental properties in Camps Bay, Clifton and Bakoven. According to Charles Bloem, specialist Seeff rental agent for these 3 areas, 80% of the properties on his books were rented by foreigners.
Bloem added that most of these foreigners were from Europe but among them were also people from the USA, Australia and Brazil. The large group of renters can be divided into two groups; employees of large companies that are relocating to South Africa for 2-3 years and families taking extended holidays of about 12 months while their children attend school in Camps Bay of Cape Town.
These tenants usually require furnished or unfurnished family homes with 3-4 bedrooms, swimming pool, garden and secure parking and are willing to pay around R20 000 – R30 000 per month.
Bloem continued to say that there is also a rental demand from people living in other regions in South Africa, mainly Gauteng, who are relocating but choosing to rent for 6-12 months before buying their own property. This is mainly because they need time to sell their property and because they want to take time to find the ideal property.
§ In other news, Realestateweb reported that one Cape Town agent has made two record-breaking sales by selling 2 Camps Bay properties. Both properties were scooped up by Gauteng businessmen.
The first home was sold for R21m and the second R16,5m.
Rent property in South Africa
Wednesday, November 26, 2008
Tuesday, November 25, 2008
Why You Need an Estate Agent
The information in this article is courtesy of Realestateweb (Big reasons not to sell your own home – 26 November 2008)
Private property sales are becoming more and more popular as homeowners try to save on commissions. According to Lanice Steward, managing director of Anne Porter Knight Frank estate agency, her experience in the industry has shown that these private sales can be disastrous.
Steward pointed out that there is a misperception of the role of the estate agent in some cases. This stems from ignorance of what the agent does and a lack of appreciation of what he or she can bring to the negotiation and sales process. This, according to Stewart, is somewhat surprising seeing that people don’t try to diagnose their own ailments, and they certainly don’t try to service their own cars, buy yet they think that they are qualified to market and sell their biggest assets.
The biggest mistake made by DIY home sellers is often made while investigating prices in their region. Show houses are almost always overpriced and when sellers use that price as a guideline they often overprice (or sometimes under-price) their own property.
DIY sellers often find that the advertising cost is higher than they bargain for and that possible buyers pray on their inexperience and downgrade their price by pointing out drawbacks and defects. When a serious buyer do come around the sellers often lack the legal and negotiating skills to get a good deal.
When using a trained agent these issues are often totally excluded from the selling process; the seller benefits from the agency’s large-volume advertising and the agent will have a potential buyers list, which is a good start. A professional agent will recognise the pitfalls and traps to avoid in the all-important negotiation process and all other deed related issues would be handled with precision.
Steward thinks it is important for all homeowners to note that, although an agent’s commissions might sometimes be high, the reality is that paying an agent will almost always get you a sooner and better deal.
Buy property in South Africa
Private property sales are becoming more and more popular as homeowners try to save on commissions. According to Lanice Steward, managing director of Anne Porter Knight Frank estate agency, her experience in the industry has shown that these private sales can be disastrous.
Steward pointed out that there is a misperception of the role of the estate agent in some cases. This stems from ignorance of what the agent does and a lack of appreciation of what he or she can bring to the negotiation and sales process. This, according to Stewart, is somewhat surprising seeing that people don’t try to diagnose their own ailments, and they certainly don’t try to service their own cars, buy yet they think that they are qualified to market and sell their biggest assets.
The biggest mistake made by DIY home sellers is often made while investigating prices in their region. Show houses are almost always overpriced and when sellers use that price as a guideline they often overprice (or sometimes under-price) their own property.
DIY sellers often find that the advertising cost is higher than they bargain for and that possible buyers pray on their inexperience and downgrade their price by pointing out drawbacks and defects. When a serious buyer do come around the sellers often lack the legal and negotiating skills to get a good deal.
When using a trained agent these issues are often totally excluded from the selling process; the seller benefits from the agency’s large-volume advertising and the agent will have a potential buyers list, which is a good start. A professional agent will recognise the pitfalls and traps to avoid in the all-important negotiation process and all other deed related issues would be handled with precision.
Steward thinks it is important for all homeowners to note that, although an agent’s commissions might sometimes be high, the reality is that paying an agent will almost always get you a sooner and better deal.
Buy property in South Africa
Monday, November 24, 2008
Choosing and Using a Building Contractor
(This article is courtesy of Paddock Press - an ad-hoc free digital newsletter published to educate and update the sectional title community.
Building maintenance is an essential reality for anyone living in a sectional title scheme. All buildings suffer wear and tear due to the effects of wind, sun, rain and the activities of their occupants. Even buildings that have been built to the highest standard require needs regular maintenance work in order to maintain the building standard required by the owners and the Sectional Titles Act 95 of 1986 (“the Act”).
Section 37(1)(j) of the Act obliges the Body Corporate to properly maintain the common property, and keep it in a state of good and serviceable repair.
There are a couple of things you should keep in mind when choosing a good contractor for the job: The trustees, as the elected representatives of the body corporate, are the persons empowered in terms of the Act and the prescribed rules to choose a maintenance contractor for the scheme on the body corporate’s behalf. It is possible that the owners many give the trustees a specific direction at a general meeting, but more usually a majority vote or the trustees will determine which contractor is chosen. But the rules do exclude a trustees from voting in certain circumstances – Prescribed Management Rule 23 disqualifies a trustee from voting in respect of any contract or proposed contract in which he/she has a personal interest. This doesn’t mean that a contractor in which a trustee has a personal interest cannot be used to do the scheme’s maintenance; it simply means the trustee with the personal interest is excluded when it comes down to the vote.
Ensure that a least 3 written quotes, based on the same specification, are obtained for the job. It may be sensible to get more quotes, but getting at least 3 will ensure that the trustees have a good basis for comparison.
Once the trustees have an acceptable quote, they should ask the prospective contractor for references, ranging from work done when they started their business to projects they have just completed or are still working on.
With smaller contractors the trustees should try to obtain some indication of financial stability, perhaps in the form of a reference from a bank manager. Contractors’ financial situations can change very quickly and financial difficulties will almost certainly impact negatively on the level of service the scheme receives.
The trustees should try to obtain as much information as possible. It is not good enough if the contractor is only prepared to give the trustees a cell phone number. If possible, the trustees should go and visit the contractor’s premises to see where it is operating and how professional it appears. The bottom line – you are about to spend all owners’ money, so try to get as much information about the proposed contractor as possible.
Once the trustees have decided on a contractor, they should insist on a sighed contract. This contract should be very specific:
1. Explaining the detail what the job entails, no detail is too small
2. Tool and material storage, ablution facilities, rubble removal
3. Commencement and completion dates, daily work hours
4. Penalties if terms and conditions are not met
5. Breakdown of how money will be paid
The proposed contract should be tabled at a trustee meeting and two trustees should be specifically authorised to sign it as well as to authorise payments. If there are any clauses in the contract that the trustees don’t agree with they should put a line through them and all persons signing the contract must initial these and any other alterations.
It is advisable to stick as close as possible to the work quoted for. But during the course of the maintenance work, the trustees may find they need to request that the contractor complete extra tasks. Always ensure that these extras are quoted for and put in writing, as this will avoid conflict down the line.
In most cases, deposits are required. Although there is not a hard and fast rule, the following is a guideline.
1. 20% of the full contract price on the signing of the contract
2. 30% on delivery of material to the site
3. 30% can be used as “progress payment”, and
4. 20% should only be paid after completion and when the trustees are completely satisfied with the work done
5. In larger jobs that involve building from the ground up, a retention fund for defective work should be kept for at least 6 month after the job has been completed, this amount will normally be 10% of all payments made.
Maintenance contractors should ideally be registered with some form of regulatory body, these boards serve to regulate their respective industries and usually offer some form of compensation for defective work done by its members. For example, if your scheme is having electrical work done the trustees should ensure that the contractor is a member of the Electrical Contractors Association of SA. The Association regulates the electrical industry and guarantees to rectify defective work or materials on contracts by its members of up to R15 000.
Find property for sale in South Africa
Building maintenance is an essential reality for anyone living in a sectional title scheme. All buildings suffer wear and tear due to the effects of wind, sun, rain and the activities of their occupants. Even buildings that have been built to the highest standard require needs regular maintenance work in order to maintain the building standard required by the owners and the Sectional Titles Act 95 of 1986 (“the Act”).
Section 37(1)(j) of the Act obliges the Body Corporate to properly maintain the common property, and keep it in a state of good and serviceable repair.
There are a couple of things you should keep in mind when choosing a good contractor for the job: The trustees, as the elected representatives of the body corporate, are the persons empowered in terms of the Act and the prescribed rules to choose a maintenance contractor for the scheme on the body corporate’s behalf. It is possible that the owners many give the trustees a specific direction at a general meeting, but more usually a majority vote or the trustees will determine which contractor is chosen. But the rules do exclude a trustees from voting in certain circumstances – Prescribed Management Rule 23 disqualifies a trustee from voting in respect of any contract or proposed contract in which he/she has a personal interest. This doesn’t mean that a contractor in which a trustee has a personal interest cannot be used to do the scheme’s maintenance; it simply means the trustee with the personal interest is excluded when it comes down to the vote.
Ensure that a least 3 written quotes, based on the same specification, are obtained for the job. It may be sensible to get more quotes, but getting at least 3 will ensure that the trustees have a good basis for comparison.
Once the trustees have an acceptable quote, they should ask the prospective contractor for references, ranging from work done when they started their business to projects they have just completed or are still working on.
With smaller contractors the trustees should try to obtain some indication of financial stability, perhaps in the form of a reference from a bank manager. Contractors’ financial situations can change very quickly and financial difficulties will almost certainly impact negatively on the level of service the scheme receives.
The trustees should try to obtain as much information as possible. It is not good enough if the contractor is only prepared to give the trustees a cell phone number. If possible, the trustees should go and visit the contractor’s premises to see where it is operating and how professional it appears. The bottom line – you are about to spend all owners’ money, so try to get as much information about the proposed contractor as possible.
Once the trustees have decided on a contractor, they should insist on a sighed contract. This contract should be very specific:
1. Explaining the detail what the job entails, no detail is too small
2. Tool and material storage, ablution facilities, rubble removal
3. Commencement and completion dates, daily work hours
4. Penalties if terms and conditions are not met
5. Breakdown of how money will be paid
The proposed contract should be tabled at a trustee meeting and two trustees should be specifically authorised to sign it as well as to authorise payments. If there are any clauses in the contract that the trustees don’t agree with they should put a line through them and all persons signing the contract must initial these and any other alterations.
It is advisable to stick as close as possible to the work quoted for. But during the course of the maintenance work, the trustees may find they need to request that the contractor complete extra tasks. Always ensure that these extras are quoted for and put in writing, as this will avoid conflict down the line.
In most cases, deposits are required. Although there is not a hard and fast rule, the following is a guideline.
1. 20% of the full contract price on the signing of the contract
2. 30% on delivery of material to the site
3. 30% can be used as “progress payment”, and
4. 20% should only be paid after completion and when the trustees are completely satisfied with the work done
5. In larger jobs that involve building from the ground up, a retention fund for defective work should be kept for at least 6 month after the job has been completed, this amount will normally be 10% of all payments made.
Maintenance contractors should ideally be registered with some form of regulatory body, these boards serve to regulate their respective industries and usually offer some form of compensation for defective work done by its members. For example, if your scheme is having electrical work done the trustees should ensure that the contractor is a member of the Electrical Contractors Association of SA. The Association regulates the electrical industry and guarantees to rectify defective work or materials on contracts by its members of up to R15 000.
Find property for sale in South Africa
Thursday, November 20, 2008
Commission Cuts to Stay in Bussiness
The information in this article is courtesy or Realestateweb (Property sales, rentals. Will you pay less commission? - 21 November 2008)
Realestateweb reports that more and more properties are spending more than 20 weeks on the market. This has urged some agents to offer discounts on commissions charged for selling homes – some of them dropping their commissions to below 5%.
One of these agents is Andre Le Sueur, an estate agent for Property100 Pretoria. He says that lowering his commission has helped him sell more property. He feels that charging 7,5% commission might cause you not to sell anything at all. However, says Le Sueur, some sellers still ask for discount and sometimes he even gives them 1% on below 5% commission.
Jerome Khambule of Khambule Estates in Durban said that rental commission of less than 5% is a huge blow to income as there are many bills to pay. According to him his agency charges 7,5% and he thinks that less than 5% is not good for business. Fine and Country’s CEO shares Khambule’s views on this.
“When agencies start operating under the rate of 5-6% commission, they are moving into the danger zone. Currently with so many agencies closing, the public will have no choice but to appreciate a higher commission rate for an all-inclusive quality service.”
She added that unrealistic cuts just to get business will not benefit the client for there will be little guarantee that funds for marketing will be available. She feels that fees should be cut when markets are stronger and more buyers are present.
“It is common in South Africa for home sellers to negotiate the estate agent's fee, however in most cases it is simply just accepting that the fee is less but the activity and marketing are the same.”
Erasmus warned that when agents become to desperate and cut commission below 3%, the activity will also be cut to zero in some cases.
Buy homes for sale in South Africa
Realestateweb reports that more and more properties are spending more than 20 weeks on the market. This has urged some agents to offer discounts on commissions charged for selling homes – some of them dropping their commissions to below 5%.
One of these agents is Andre Le Sueur, an estate agent for Property100 Pretoria. He says that lowering his commission has helped him sell more property. He feels that charging 7,5% commission might cause you not to sell anything at all. However, says Le Sueur, some sellers still ask for discount and sometimes he even gives them 1% on below 5% commission.
Jerome Khambule of Khambule Estates in Durban said that rental commission of less than 5% is a huge blow to income as there are many bills to pay. According to him his agency charges 7,5% and he thinks that less than 5% is not good for business. Fine and Country’s CEO shares Khambule’s views on this.
“When agencies start operating under the rate of 5-6% commission, they are moving into the danger zone. Currently with so many agencies closing, the public will have no choice but to appreciate a higher commission rate for an all-inclusive quality service.”
She added that unrealistic cuts just to get business will not benefit the client for there will be little guarantee that funds for marketing will be available. She feels that fees should be cut when markets are stronger and more buyers are present.
“It is common in South Africa for home sellers to negotiate the estate agent's fee, however in most cases it is simply just accepting that the fee is less but the activity and marketing are the same.”
Erasmus warned that when agents become to desperate and cut commission below 3%, the activity will also be cut to zero in some cases.
Buy homes for sale in South Africa
Property Boss Optimistic About the Future
The information in the article is courtesy of Realestateweb (Six reasons to be cheerful about 2009 – Property boss – 20 November 2009)
Jan Le Roux, CEO of Leapfrog Property Group says that he sees more positives than negatives for 2009. He added that political leaders should stop looking after themselves and rather focus on the country’s people – especially in a time where economic indicators are showing that the economic slump may have bottomed out.
Some of the positives, according to Le Roux are Finance Minister, Trevor Manuel’s prediction that growth should increase to 4,3% n 2010 and his bid to spend R600bn on infrastructure. On top of that the promising 2010 is looming.
The best news is the fact that the CPIX inflation has slowed to 13% from 13,2%. On top of this we might also be in for a first rate cut of 50 basis points (half a percent) in February.
Among the other positives are WesBank’s vehicle sales’ confidence indicator showing that an increase of 4,3% can be expected for 2010.
Although Le Roux warns that it might not be time to bring out the fireworks yet, the bottom has been reached and things can only get better now. He also assured property investors that property is still a sound investment; hence you see it as a long-term plan.
“People still get married and divorced, have kids, kids leave home, get promotion, move between cities, etc in all markets. Sellers who sell in high markets have to buy in high markets. Sellers, who wait until the low market improves, may sell at a higher market but will buy at a higher market, whereas if they sell in a low market they buy in a low market.”
Le Roux said that, unless politicians stop playing the man instead of the ball, South Africa might be plunged into a deeper and prolonged recession, as the markets are very sensitive to political situations.
Find Homes for sale in South Africa
Jan Le Roux, CEO of Leapfrog Property Group says that he sees more positives than negatives for 2009. He added that political leaders should stop looking after themselves and rather focus on the country’s people – especially in a time where economic indicators are showing that the economic slump may have bottomed out.
Some of the positives, according to Le Roux are Finance Minister, Trevor Manuel’s prediction that growth should increase to 4,3% n 2010 and his bid to spend R600bn on infrastructure. On top of that the promising 2010 is looming.
The best news is the fact that the CPIX inflation has slowed to 13% from 13,2%. On top of this we might also be in for a first rate cut of 50 basis points (half a percent) in February.
Among the other positives are WesBank’s vehicle sales’ confidence indicator showing that an increase of 4,3% can be expected for 2010.
Although Le Roux warns that it might not be time to bring out the fireworks yet, the bottom has been reached and things can only get better now. He also assured property investors that property is still a sound investment; hence you see it as a long-term plan.
“People still get married and divorced, have kids, kids leave home, get promotion, move between cities, etc in all markets. Sellers who sell in high markets have to buy in high markets. Sellers, who wait until the low market improves, may sell at a higher market but will buy at a higher market, whereas if they sell in a low market they buy in a low market.”
Le Roux said that, unless politicians stop playing the man instead of the ball, South Africa might be plunged into a deeper and prolonged recession, as the markets are very sensitive to political situations.
Find Homes for sale in South Africa
Tuesday, November 18, 2008
Why are Suburbanites Moving Back to the Townships?
The information in the article is courtesy of Realestateweb ("We're moving back to the townships" - 19 November 2008)
Many property buyers living in the suburbs have now decided to pack up and move back to the townships. The reason might be that suburban homes have become unaffordable, while the market in the townships is booming. The FNB Township Barometer is also showing that the township market is slowing down as a result of general economic growth, inflation and interest rates.
Property strategist, John Loos says that the townships are in good shape, despite the slow market, and the shortage of stock is driving this boom. The statistics are showing that Durban’s has the highest shortage of stock of 68%, Cape Town 38% and Johannesburg 31%. This has pushed the property prices up, as supply cannot meet demand.
Further statistics show that 31% of buyers in Gauteng are believed to be from the suburbs, 26% in Cape Town and 24% in Durban. In Soweto alone there are an estimated 38% of buyers from the suburbs. Loos says that this might be due to infrastructure upgrades and retail developments – causing the area to be more attractive to buyer with purchasing power.
Lawrence Molepo is as an estate agent for Gilbert Estates in Protea, Soweto. According to him the booming property market can be due to the shortage of stock but also due to upgraded infrastructure.
Molepo explain that since the Maponya Mall has open the house prices around the mall have gone up substantially. A four-bedroom house cost less that R100 000 before the opening of the mall and is now selling for R300 000.
Molepo predicts that the positive growth in the residential property market might encourage developers to embark on large-scale commercial properties in Soweto.
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Many property buyers living in the suburbs have now decided to pack up and move back to the townships. The reason might be that suburban homes have become unaffordable, while the market in the townships is booming. The FNB Township Barometer is also showing that the township market is slowing down as a result of general economic growth, inflation and interest rates.
Property strategist, John Loos says that the townships are in good shape, despite the slow market, and the shortage of stock is driving this boom. The statistics are showing that Durban’s has the highest shortage of stock of 68%, Cape Town 38% and Johannesburg 31%. This has pushed the property prices up, as supply cannot meet demand.
Further statistics show that 31% of buyers in Gauteng are believed to be from the suburbs, 26% in Cape Town and 24% in Durban. In Soweto alone there are an estimated 38% of buyers from the suburbs. Loos says that this might be due to infrastructure upgrades and retail developments – causing the area to be more attractive to buyer with purchasing power.
Lawrence Molepo is as an estate agent for Gilbert Estates in Protea, Soweto. According to him the booming property market can be due to the shortage of stock but also due to upgraded infrastructure.
Molepo explain that since the Maponya Mall has open the house prices around the mall have gone up substantially. A four-bedroom house cost less that R100 000 before the opening of the mall and is now selling for R300 000.
Molepo predicts that the positive growth in the residential property market might encourage developers to embark on large-scale commercial properties in Soweto.
Get South African property news
Monday, November 17, 2008
2009: A Time to Buy
The information in the article is courtesy of Realestateweb (What's in store for property - 2009, 17 November 2008)
Lew Greffen, head of Lew Greffen Sotheby’s, said that this is a great time to buy property in South Africa. This comes after his controversial prediction earlier this year that the property prices will continue falling and that the market has entered a recession.
His views regarding the South African property market in 2009 are plain and simple: Buy now if you can get the money. The agents in the market, according to Greffen, should just hang in there and ride out this “typical cycle” that might last for around 2-3 years. He suggested that there are among the agents, those who might not make it.
Greffen also said that this violent market decline is partially because the market came of such a high, but he explained that there are some positives like the fact that the small amount of stock in the market might stabilise the prices.
Buy property in Cape Town
Lew Greffen, head of Lew Greffen Sotheby’s, said that this is a great time to buy property in South Africa. This comes after his controversial prediction earlier this year that the property prices will continue falling and that the market has entered a recession.
His views regarding the South African property market in 2009 are plain and simple: Buy now if you can get the money. The agents in the market, according to Greffen, should just hang in there and ride out this “typical cycle” that might last for around 2-3 years. He suggested that there are among the agents, those who might not make it.
Greffen also said that this violent market decline is partially because the market came of such a high, but he explained that there are some positives like the fact that the small amount of stock in the market might stabilise the prices.
Buy property in Cape Town
Thursday, November 13, 2008
Rental Deposits: Do’s and Don’ts
The information in the article is courtesy of Realestateweb, (“Tenant’s rental deposit: what you need to know”, 14 November 2008)
Realestateweb’s columist, Mike Spencer – property valuer, estate agent and sectional title expert – explains some factors regarding a tenant’s deposit.
Firstly it is good to know that the purpose of a deposit is to cover unpaid rental, damages to the property, inspection fees and unpaid bills.
According to Spencer, when you use a management agent to look after your property, they usually keep the tenant’s deposit in their account. As a landlord, you do not have to pay interest on that deposit nor do you have to open a separate bank account, although larger companies might run a special bank account for individual deposits and pay interest, but this is unusual.
One thing to keep in mind, Spencer said, is that the deposit is kept up to date so that if the rent increases the deposit should be increased to keep it up to the full level required.
As a landlord you are allowed to ask more than a month’s rent as a deposit. Some agencies ask one and a half or 2 months’ rent. When you have to use the deposit to cover cost, remember to keep all receipts.
A question that is often asked is when you should pay back the deposit if there are no damages. Spencer says that the deposit needs to be paid back within 7 days of the evacuation of the property should there be no damages. If there are damages it should be repaid within 14 days, but this might sometimes be delayed if you need to get contractors to fix the damages.
Remember to always get proof that all water and electricity bills have been settled before you pay back the deposit. When water and electricity is paid by the body corporate stick to the rule “no final account, no deposit”.
Don’t make the mistake of letting your tenants pay off the deposit over a period of time. If a tenant can’t afford the deposit they are probably going to struggle to pay the rent, too.
Rent property in South Africa
Realestateweb’s columist, Mike Spencer – property valuer, estate agent and sectional title expert – explains some factors regarding a tenant’s deposit.
Firstly it is good to know that the purpose of a deposit is to cover unpaid rental, damages to the property, inspection fees and unpaid bills.
According to Spencer, when you use a management agent to look after your property, they usually keep the tenant’s deposit in their account. As a landlord, you do not have to pay interest on that deposit nor do you have to open a separate bank account, although larger companies might run a special bank account for individual deposits and pay interest, but this is unusual.
One thing to keep in mind, Spencer said, is that the deposit is kept up to date so that if the rent increases the deposit should be increased to keep it up to the full level required.
As a landlord you are allowed to ask more than a month’s rent as a deposit. Some agencies ask one and a half or 2 months’ rent. When you have to use the deposit to cover cost, remember to keep all receipts.
A question that is often asked is when you should pay back the deposit if there are no damages. Spencer says that the deposit needs to be paid back within 7 days of the evacuation of the property should there be no damages. If there are damages it should be repaid within 14 days, but this might sometimes be delayed if you need to get contractors to fix the damages.
Remember to always get proof that all water and electricity bills have been settled before you pay back the deposit. When water and electricity is paid by the body corporate stick to the rule “no final account, no deposit”.
Don’t make the mistake of letting your tenants pay off the deposit over a period of time. If a tenant can’t afford the deposit they are probably going to struggle to pay the rent, too.
Rent property in South Africa
Wednesday, November 12, 2008
World Cup to Transform SA Property Market
An international property website reported yesterday that the Fifa 2010 World Cup is expected to inject as much as £ 1.5 billion (around R23.4 billion) into South Africa, as tourists and visitors from all over the world fill up the stadiums, restaurant and hotels in the country. This, and the current expansion of the local infrastructure will ensure that the South African property market will become a sought after investment wonderland.
According to Lloyd Cornwall, Managing Director of Pin High Property in South Africa, our country has already made a name for itself in the global property market. He added that property here is still undervalued but that continued investment in the lead up to the World Cup will balance the market once again.
Cornwall encourage potential buyer to invest now, before the market reaches a new level. He added that both long and short-term investors can expect to see tremendous results.
On a different note, Donald Trump has decided to expand his property portfolio to South Africa. In partnership with local businessman, Neill Bernstein, they will work on a variety of properties, including golf estate, hotel and residential development.
Other areas that host Trump’s developments are Dubai, Panama, Asia.
Buy property for sale in South Africa
According to Lloyd Cornwall, Managing Director of Pin High Property in South Africa, our country has already made a name for itself in the global property market. He added that property here is still undervalued but that continued investment in the lead up to the World Cup will balance the market once again.
Cornwall encourage potential buyer to invest now, before the market reaches a new level. He added that both long and short-term investors can expect to see tremendous results.
On a different note, Donald Trump has decided to expand his property portfolio to South Africa. In partnership with local businessman, Neill Bernstein, they will work on a variety of properties, including golf estate, hotel and residential development.
Other areas that host Trump’s developments are Dubai, Panama, Asia.
Buy property for sale in South Africa
Tuesday, November 11, 2008
The Big Five Challenges Facing the Market
The information in this article is courtesy of Real Estate Web (Samuel Seeff's Crystal Ball - 10 November 2008)
A resilient property market, as well as the local economy has proven that we can expect a come back – even as soon as next year this time. According to Samual Seeff, chairman of Seeff Properties there are in fact 5 big challenges that the South African market will have to face in order to make a recovery:
Bank has substantially tighten there lending criteria, higher deposits has been demanded, not to mention the effect that the stringent demands of the New Credit Act have had on the property market.
As a result of this, one out of every two bonds applications has been rejected, which has economist predicting a further slowdown in mortgage rates.
Property prices have dropped significantly due to a weakening demand and high interest rates. Seeff urges those who can secure bonds to buy property now. The predictions by economist here are that the prices will pick up within a year, and further escalate by 2010.
High interest rates is a big challenge, although economist suggest that relieve is on its way. However, the current turmoil in the international market has had a negative effect on the Rand and an unexpected drop in the producer price index, maintains to be a hefty concern.
Therefore, The Reserve Bank won’t cut interest rate just yet, but it can be expected after the recalculation of inflation figures to be introduced next year.
Poor investor confidence, caused by the current turbulence in the international market, has certainly had an effect on the property market. The good news is that exchange rates have taken some strain off the market.
Negative sentiment along with banks tightening up their lending is causing poor consumer confidence. Among other things that are also keeping buyers off the market are bond repayments increasing by 40% over the past 2 years, and food prices continuing to rise.
But relief is in sight with drops in the oil price and slowing inflation, which also indicates that the market is likely to recover in the last quarter of next year.
Buy property in South Africa
A resilient property market, as well as the local economy has proven that we can expect a come back – even as soon as next year this time. According to Samual Seeff, chairman of Seeff Properties there are in fact 5 big challenges that the South African market will have to face in order to make a recovery:
Bank has substantially tighten there lending criteria, higher deposits has been demanded, not to mention the effect that the stringent demands of the New Credit Act have had on the property market.
As a result of this, one out of every two bonds applications has been rejected, which has economist predicting a further slowdown in mortgage rates.
Property prices have dropped significantly due to a weakening demand and high interest rates. Seeff urges those who can secure bonds to buy property now. The predictions by economist here are that the prices will pick up within a year, and further escalate by 2010.
High interest rates is a big challenge, although economist suggest that relieve is on its way. However, the current turmoil in the international market has had a negative effect on the Rand and an unexpected drop in the producer price index, maintains to be a hefty concern.
Therefore, The Reserve Bank won’t cut interest rate just yet, but it can be expected after the recalculation of inflation figures to be introduced next year.
Poor investor confidence, caused by the current turbulence in the international market, has certainly had an effect on the property market. The good news is that exchange rates have taken some strain off the market.
Negative sentiment along with banks tightening up their lending is causing poor consumer confidence. Among other things that are also keeping buyers off the market are bond repayments increasing by 40% over the past 2 years, and food prices continuing to rise.
But relief is in sight with drops in the oil price and slowing inflation, which also indicates that the market is likely to recover in the last quarter of next year.
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Monday, November 10, 2008
Absa Predicts Bleak Future
Another bank warns that consumers are in for an uphill battle. This time Absa states that the property market is moving into negative territory after statistics were released showing that price growth is at its slowest pace in 15 year. This situation comes after shocking interest rates and inflation caused consumers to tighten the belt.
Absa said that nominal house prices advanced at an annual rate of 1,2% last month – the slowest since January 1993 - after gaining a revised 1,7% in September. This bought the average house price to R696 100. Last month’s statistics also showed that the average nominal price of a small house is about R687 100, with the average price for large houses showed an average price of R1,394m.
Next year’s nominal house price growth is expected to be even lower and real prices were set to decline next year for a second successive year, said Jacques Du Toit, senior property analyst at Absa Home Loans.
“In view of current and expected economic conditions, the outlook for the housing market towards the end of 2008 and into 2009 is bleak.”
The information in this article is courtesy of Business Day (“Local property market outlook bleak” – 7 November 2008)
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Absa said that nominal house prices advanced at an annual rate of 1,2% last month – the slowest since January 1993 - after gaining a revised 1,7% in September. This bought the average house price to R696 100. Last month’s statistics also showed that the average nominal price of a small house is about R687 100, with the average price for large houses showed an average price of R1,394m.
Next year’s nominal house price growth is expected to be even lower and real prices were set to decline next year for a second successive year, said Jacques Du Toit, senior property analyst at Absa Home Loans.
“In view of current and expected economic conditions, the outlook for the housing market towards the end of 2008 and into 2009 is bleak.”
The information in this article is courtesy of Business Day (“Local property market outlook bleak” – 7 November 2008)
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Friday, November 7, 2008
Large Demand for Low-Cost Property
The information in the article is courtesy of Propety24 (Low coast demand hard to meet – 6 November 2008)
Bill Rawson, chairman of Rawson Properties says that 80% of residential housing is now aimed at the sub-500k market and most of the remaining 20% is demand for homes in the 500k to R1m range. Rawson added that this can be seen all over the country and is largely due to tighter credit restrictions and high interest rates.
According to Rawson they would like to do more development in these sectors but the high cost of land are making it non-viable. Rawson went on to say that the value of housing has again been proved in the current financial difficulties and that it looks like the world economies will take some time to sort out their debt.
"However, in these difficult conditions South African housing continues to be bought and sold at the levels that pertained in 2006. Even if we dropped to 2004 levels, as seems just possible, the truth remains that housing has been able to ride out the current bumpy patch far better than most asset classes."
Another positive, Rawson said, is the recent auctioned property that achieved higher than expected prices – a sign that investors have restored their faith in the value of property. The new middle class is also tending to upgrade their homes, by either improvement of moving to a different area. This group of homeowners are aware of the value of property and know what they want from their investment – which is usually selling at market price or above.
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Bill Rawson, chairman of Rawson Properties says that 80% of residential housing is now aimed at the sub-500k market and most of the remaining 20% is demand for homes in the 500k to R1m range. Rawson added that this can be seen all over the country and is largely due to tighter credit restrictions and high interest rates.
According to Rawson they would like to do more development in these sectors but the high cost of land are making it non-viable. Rawson went on to say that the value of housing has again been proved in the current financial difficulties and that it looks like the world economies will take some time to sort out their debt.
"However, in these difficult conditions South African housing continues to be bought and sold at the levels that pertained in 2006. Even if we dropped to 2004 levels, as seems just possible, the truth remains that housing has been able to ride out the current bumpy patch far better than most asset classes."
Another positive, Rawson said, is the recent auctioned property that achieved higher than expected prices – a sign that investors have restored their faith in the value of property. The new middle class is also tending to upgrade their homes, by either improvement of moving to a different area. This group of homeowners are aware of the value of property and know what they want from their investment – which is usually selling at market price or above.
Search for Property in South Africa
Wednesday, November 5, 2008
Real Estate Clock Predicts Rebound in 2010
The information in the article is courtesy of Property24 (“Residential Market to Rebound Then”, 6 November 2008)
Real estate group, Colliers International (COL), indicated that the South African residential property market will rebound by 2010. This prediction is based on the real estate clock, which was developed in 1933 and demonstrates the cycles and current state of the market.
Sanett Uys, director of Colliers International in South Africa, explain that the property market goes through cycles and follows patterns. This cycle starts with a boom period, moves on to contraction, recession and eventually makes it way through to recovery, expansion, increased funding availability, and back to the boom period. This takes around 7 to 9 years, explain Uys, and each county and city has its own cycle.
She continued to say that while the new mortgage loan granted figures continue to decline, the demand for rental properties are up. She added that the increased cost of property ownership makes renting an even more attractive option.
It has also been noted that property is still a sound option considering certain factors like location. It is also important to see your investment as a long-term one and to understand the external factors that influence the market, among them society, legislation, the environment and the economy, not to mention inflation and interest rates.
Uys suggested that even if a slowdown in residential building completions for 2008/09 is expected, investors should ride out the wave and focus on capital appreciation in 2010.
Find property for sale in South Africa
Real estate group, Colliers International (COL), indicated that the South African residential property market will rebound by 2010. This prediction is based on the real estate clock, which was developed in 1933 and demonstrates the cycles and current state of the market.
Sanett Uys, director of Colliers International in South Africa, explain that the property market goes through cycles and follows patterns. This cycle starts with a boom period, moves on to contraction, recession and eventually makes it way through to recovery, expansion, increased funding availability, and back to the boom period. This takes around 7 to 9 years, explain Uys, and each county and city has its own cycle.
She continued to say that while the new mortgage loan granted figures continue to decline, the demand for rental properties are up. She added that the increased cost of property ownership makes renting an even more attractive option.
It has also been noted that property is still a sound option considering certain factors like location. It is also important to see your investment as a long-term one and to understand the external factors that influence the market, among them society, legislation, the environment and the economy, not to mention inflation and interest rates.
Uys suggested that even if a slowdown in residential building completions for 2008/09 is expected, investors should ride out the wave and focus on capital appreciation in 2010.
Find property for sale in South Africa
Inflation Figures Point to Interest Rate Cuts
This article is courtesy of RealEstateWeb (“New inflation figures pave way for interest rate cuts” – 30 October 2008)
The latest inflation figures will give the nation hope that interest rates will drop in 2009. This comes after inflation levels left the residential property price growth and sales volumes in a sad state.
According to Cadiz African Harvest Asset Management, the latest Statistics SA producer price figures, are paving the way for a decline in rates form early 2009. He added that September’s figures was significantly lower than market watcher were expecting; producer inflation fell to 16,0% from 19,1% in August while the expected rate was 18,3%.
Hardien stated that the key inflation drivers at the producer level remain food, oil and other commodity prices. These groups of prices have turned slightly while dollar commodity prices have turned decisively. While this has been partially negated by rand weakness, the extent of the dollar declines have tended to overwhelm the rand’s moves.
The bottom line, according to Hardien, is that while significant upside risks to inflation remain, they are likely to be dwarfed by strong cyclical factors over the near-term – resulting in inflation continuing to decline through 2009.
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The latest inflation figures will give the nation hope that interest rates will drop in 2009. This comes after inflation levels left the residential property price growth and sales volumes in a sad state.
According to Cadiz African Harvest Asset Management, the latest Statistics SA producer price figures, are paving the way for a decline in rates form early 2009. He added that September’s figures was significantly lower than market watcher were expecting; producer inflation fell to 16,0% from 19,1% in August while the expected rate was 18,3%.
Hardien stated that the key inflation drivers at the producer level remain food, oil and other commodity prices. These groups of prices have turned slightly while dollar commodity prices have turned decisively. While this has been partially negated by rand weakness, the extent of the dollar declines have tended to overwhelm the rand’s moves.
The bottom line, according to Hardien, is that while significant upside risks to inflation remain, they are likely to be dwarfed by strong cyclical factors over the near-term – resulting in inflation continuing to decline through 2009.
Buy property in South Africa
Tuesday, November 4, 2008
Weakening Rand Attracts Foreign Buyers
Property Wire, an international property news service, reported that foreign property investors are more and more interested in buying property in South Africa because of the weakening of the Rand and the stable growth of rates.
Europeans buyers are among the ones that are looking to buy property in the Western Cape, along the Garden Route and close to venues that will host the 2010 World Cup Soccer. Also contributing to the increasing interest is the favourable exchange rate between the Rand and the Euro.
Real estate companies like Sotheby’s International Realty in South Africa and Pam Golding Properties report that they have already detected an increase in enquiries from international buyers. It is assumed that it is a direct result of the depreciating Rand.
Other say that is still too early to tell what the real impact on foreign buyers is going to be, because of the turmoil in the world financial markets.
Seach for property in South Africa
Europeans buyers are among the ones that are looking to buy property in the Western Cape, along the Garden Route and close to venues that will host the 2010 World Cup Soccer. Also contributing to the increasing interest is the favourable exchange rate between the Rand and the Euro.
Real estate companies like Sotheby’s International Realty in South Africa and Pam Golding Properties report that they have already detected an increase in enquiries from international buyers. It is assumed that it is a direct result of the depreciating Rand.
Other say that is still too early to tell what the real impact on foreign buyers is going to be, because of the turmoil in the world financial markets.
Seach for property in South Africa
Monday, November 3, 2008
Mortgage Figures Signalling Tough Times
This article is courtesy of RealEstateWeb ("Ouch! More bad mortgage figures point to scary property scenario” – 29 October 2008)
FNB released its figures for outstanding mortgages for September and warned that things are not looking good. According to them we should not expect the residential property market to recover before 2010 and that commercial property is doing even worse.
A graph showing mortgage growth declining steadily since 2006 – around the time when interest rates started rising - highlighted the weakening trend in the residential sector. John Loos also pointed out that year-on-year growth decline from 17,6% in August to 16,6% in September, and the bank believes that this is just a start; figures can drop to 0% which suggest that the tough times are far from over.
Demand for residential property is expected to pick up towards mid-2009, Loos said, but this is only expected to be seen in the outstanding mortgage numbers in 2010.
Loos also said that commercial mortgages have been declining since a peak in the late-2006. This means that this sector has been negatively affected by the rising interest rates and the deteriorating economic prospects.
FNB warned that numbers will continue to decline because the outstanding mortgages has yet to fully reflect the sharp decline in new mortgage loans granted, especially residential property.
§ Good news is that the website, PropertyOverseas, has suggested to it’s users that property in South Africa is an “attractive proposition” with the Rand giving them good value for money.
Find property for sale in South Africa
FNB released its figures for outstanding mortgages for September and warned that things are not looking good. According to them we should not expect the residential property market to recover before 2010 and that commercial property is doing even worse.
A graph showing mortgage growth declining steadily since 2006 – around the time when interest rates started rising - highlighted the weakening trend in the residential sector. John Loos also pointed out that year-on-year growth decline from 17,6% in August to 16,6% in September, and the bank believes that this is just a start; figures can drop to 0% which suggest that the tough times are far from over.
Demand for residential property is expected to pick up towards mid-2009, Loos said, but this is only expected to be seen in the outstanding mortgage numbers in 2010.
Loos also said that commercial mortgages have been declining since a peak in the late-2006. This means that this sector has been negatively affected by the rising interest rates and the deteriorating economic prospects.
FNB warned that numbers will continue to decline because the outstanding mortgages has yet to fully reflect the sharp decline in new mortgage loans granted, especially residential property.
§ Good news is that the website, PropertyOverseas, has suggested to it’s users that property in South Africa is an “attractive proposition” with the Rand giving them good value for money.
Find property for sale in South Africa
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