The Western Cape property market is looking up according to a recent analysis by Sotheby’s International Realty South Africa. The analysis shows that while the residential property price ranger recorded a 35% drop in turnover for the Western Cape market for the first 6 months of 2008 – from R12b-R8b – and a 45% drop in units sold – from 7500 units to 4100 units – average prices actually increase by 19% - from R1,67m to R1,99m.
According to Barak Greffen, executive director of Sotheby’s International, this increase can be attributed to a large number of transactions in the upper segment of the market, and less in the lower market. This led the data to reflect an increase in prices.
Last year saw some hefty sales, the most significant being a R24m Clifton sale, R24m Granger Bay sale and a R23m Bantry Bay sale.
During the last 3 months of 2008 over 100 units of property were sold for R476m in the Atlantic Seaboard at an average price of close to R4m. This shows that there was still demand for property in highly sough-after areas.
Greffen finished by saying that savvy buyers have been waiting for the market correction to pick up the top-end properties from realistic sellers at market related prices, in order to gear up for the next upward cycle in the market.
The information in this article is courtesy of EngineeringNews (Western Cape property volumes down, but prices hold – Sothebys - 25 January 2009)
Buy property in Pretoria
Monday, January 26, 2009
Thursday, January 22, 2009
SA Property Market Could Recover After Cut
Home buyers and owners in South Africa are in for some good news should the Monetary Policy Committee decide to cut the repo rate by a full 100 basis points in February. This would mean a drop of nearly R1000 per month in bond repayments for each R1 million of bonds held.
The repo rate is the rate at which the Reserve Bank lends money to commercial banks. It peaked at 12% in August before finally being cut by 50 basis points in December. At the moment it stands at 11.5%, with prime at 15%.
According to Brain Falconer, MD of Colliers International’s residential division, the near halving of the petrol price and the sharp drop in inflation have given the bank all the reason it needs to make meaningful interest rate cuts. He added that this would be the “best possible move for the local economy”.
“A cut would also slow down the destructive cycle of bank repossessions and encourage more people to enter the property market.”
This would significantly help the 5% of homeowners in a negative equity position recorded at the end of last year, and around 130 000 homeowners in trouble with their bonds.
Information in the article is courtesy of Daily Dispatch Online (Cut of 100 points would revive housing market – 22 January 2009)
Buy Cape Town property
The repo rate is the rate at which the Reserve Bank lends money to commercial banks. It peaked at 12% in August before finally being cut by 50 basis points in December. At the moment it stands at 11.5%, with prime at 15%.
According to Brain Falconer, MD of Colliers International’s residential division, the near halving of the petrol price and the sharp drop in inflation have given the bank all the reason it needs to make meaningful interest rate cuts. He added that this would be the “best possible move for the local economy”.
“A cut would also slow down the destructive cycle of bank repossessions and encourage more people to enter the property market.”
This would significantly help the 5% of homeowners in a negative equity position recorded at the end of last year, and around 130 000 homeowners in trouble with their bonds.
Information in the article is courtesy of Daily Dispatch Online (Cut of 100 points would revive housing market – 22 January 2009)
Buy Cape Town property
Tuesday, January 20, 2009
Worst Property Market in 12 Years
The South African residential property market has reached a 12 year low. This comes after Standard Bank released it median house price index on Tuesday 20 January 2009.
According to the index there has been a 3.1% decrease year-on-year in December, which brings the average annual decline in 2008 to 0,3%. This, according to Standard Bank is a result of economic growth virtually came to a standstill in the third quarter of last year, meaning consumers came under a lot of stress, which in all led to the worst property market in 12 years.
This was worsened by the international economic environment experiencing its worst recession in 80 years.
Last year we saw high oil prices threatening to result in runaway inflation and commodity prices collapsing towards the end of the year. The combination of sharply declining commodity prices and weak demand resulted in inflation falling rapidly in many countries around the world.
According to Standard Bank job layoffs were on the increase as businesses found it difficult to cope with the tough economic conditions, which led to further stain on the property market.
"Clearly, the combination of slow growth, relatively high interest rates, punitive debt levels and still high inflation, in a general environment of plunging confidence, will impact negatively on many segments of the economy, including the residential property market," the bank noted.
On the bright side, Standard Bank stated that they expect interest rate cuts of up to 250 basis points during 2009.
The information in this article is courtesy of Mail&Guardian (SA House Market at 12 Year Low – 20 January 2009)
Buy property for sale in Johannesburg
According to the index there has been a 3.1% decrease year-on-year in December, which brings the average annual decline in 2008 to 0,3%. This, according to Standard Bank is a result of economic growth virtually came to a standstill in the third quarter of last year, meaning consumers came under a lot of stress, which in all led to the worst property market in 12 years.
This was worsened by the international economic environment experiencing its worst recession in 80 years.
Last year we saw high oil prices threatening to result in runaway inflation and commodity prices collapsing towards the end of the year. The combination of sharply declining commodity prices and weak demand resulted in inflation falling rapidly in many countries around the world.
According to Standard Bank job layoffs were on the increase as businesses found it difficult to cope with the tough economic conditions, which led to further stain on the property market.
"Clearly, the combination of slow growth, relatively high interest rates, punitive debt levels and still high inflation, in a general environment of plunging confidence, will impact negatively on many segments of the economy, including the residential property market," the bank noted.
On the bright side, Standard Bank stated that they expect interest rate cuts of up to 250 basis points during 2009.
The information in this article is courtesy of Mail&Guardian (SA House Market at 12 Year Low – 20 January 2009)
Buy property for sale in Johannesburg
Monday, January 19, 2009
A List of Things to Remember When Moving House
Moving house can be a particularly stressful and busy period in one’s life. There are so many things that need to be taken care of and it’s no wonder that people forget even the most obvious, such as letting people know your change of address.
SAHometraders has compiled a list of the 10 most important people and service providers who need to know that you’ve moved home:
1. Inform your utility providers
* If you have DSTV then it’s important to let your provider know your change of address. The same applies if you have a landline and hold an account with Telkom. Your water, electricity and gas providers need to be aware of your new address so that you don’t have the hassle of being billed in the wrong place and then generating unnecessary debt.
=========================
2. Let your insurance company know
* We live in a day and age when crime is rife; the unexpected is always possible and consequently we need to insure all of our property, including our home. When you move to a new address, you need to alert your health, car, house and life insurance provider of the change in living situation.
=========================
3. Alert medical and dental professionals
* Many individuals and families make use of a private doctor and dentist, which means that they will need your new address to update the details that they already have on file.
=========================
4. Make other professional service providers aware
* Do you have an insurance broker, lawyer or chartered accountant that deals with you personally? It’s professional courtesy to alert these service providers about your current home address, in case they need to send you any important correspondence in the future.
=========================
5. Government officials should be informed
* If you are a member of the local library or have a personal box at the post office then it’s important that you let the relevant people know about your new address.
* More importantly though, you should advise the South African Revenue Service (SARS) of your current situation, as it’s necessary for their files to be as up to date as possible.
=========================
6. Change all your business accounts
* Everyone has a bank account, so the first logical step would be to inform your banking institution of your recent change in address. Most banks require a utility bill or a copy of the deed of sale or lease agreement as proof of address, so it might help to keep this in mind.
* Considering that everyone has a cell phone these days, it would also be wise to let your cell phone service provider know your new address, so that there isn’t any mix up with the billing each month.
* Think about whether you have an account with a service station, chemist, laundry or any other retailer and then let them know you’re in the process of moving house or have moved to a new address.
=======================
7. Do you belong to any clubs?
* With society more and more focused on leading a healthy lifestyle, it’s not unusual for individuals, couples or families to take out a gym membership at any one of the many clubs around the country. It would serve you well to let your gym know that you’ll be moving and see whether it can be arranged to transfer your membership to a closer branch if necessary.
=======================
8. Update all of your subscriptions
* For the sake of convenience, many people choose to take out subscriptions on magazines, newspapers and other related media sources, so it would a good idea to inform the various subscriptions of your new address. This way, you won’t have to miss getting your favourite daily newspaper or magazine.
========================
9. Inform your business associates
* When your business relies on associates being able to find you at home then it would certainly be courteous to let them know of any change in address.
* This also applies to your children’s school, which is particularly important in case there is some kind of emergency and they are unable to get hold of you telephonically.
==========================
10. Keep friends and relatives up-to-date
* Last, but certainly not least, your friends and relatives should be informed of your new whereabouts, particularly when it comes to those overseas who send Christmas and Birthday cards each year. Remember to let them know any change in home phone number as well.
Buy property for sale in South Africa
SAHometraders has compiled a list of the 10 most important people and service providers who need to know that you’ve moved home:
1. Inform your utility providers
* If you have DSTV then it’s important to let your provider know your change of address. The same applies if you have a landline and hold an account with Telkom. Your water, electricity and gas providers need to be aware of your new address so that you don’t have the hassle of being billed in the wrong place and then generating unnecessary debt.
=========================
2. Let your insurance company know
* We live in a day and age when crime is rife; the unexpected is always possible and consequently we need to insure all of our property, including our home. When you move to a new address, you need to alert your health, car, house and life insurance provider of the change in living situation.
=========================
3. Alert medical and dental professionals
* Many individuals and families make use of a private doctor and dentist, which means that they will need your new address to update the details that they already have on file.
=========================
4. Make other professional service providers aware
* Do you have an insurance broker, lawyer or chartered accountant that deals with you personally? It’s professional courtesy to alert these service providers about your current home address, in case they need to send you any important correspondence in the future.
=========================
5. Government officials should be informed
* If you are a member of the local library or have a personal box at the post office then it’s important that you let the relevant people know about your new address.
* More importantly though, you should advise the South African Revenue Service (SARS) of your current situation, as it’s necessary for their files to be as up to date as possible.
=========================
6. Change all your business accounts
* Everyone has a bank account, so the first logical step would be to inform your banking institution of your recent change in address. Most banks require a utility bill or a copy of the deed of sale or lease agreement as proof of address, so it might help to keep this in mind.
* Considering that everyone has a cell phone these days, it would also be wise to let your cell phone service provider know your new address, so that there isn’t any mix up with the billing each month.
* Think about whether you have an account with a service station, chemist, laundry or any other retailer and then let them know you’re in the process of moving house or have moved to a new address.
=======================
7. Do you belong to any clubs?
* With society more and more focused on leading a healthy lifestyle, it’s not unusual for individuals, couples or families to take out a gym membership at any one of the many clubs around the country. It would serve you well to let your gym know that you’ll be moving and see whether it can be arranged to transfer your membership to a closer branch if necessary.
=======================
8. Update all of your subscriptions
* For the sake of convenience, many people choose to take out subscriptions on magazines, newspapers and other related media sources, so it would a good idea to inform the various subscriptions of your new address. This way, you won’t have to miss getting your favourite daily newspaper or magazine.
========================
9. Inform your business associates
* When your business relies on associates being able to find you at home then it would certainly be courteous to let them know of any change in address.
* This also applies to your children’s school, which is particularly important in case there is some kind of emergency and they are unable to get hold of you telephonically.
==========================
10. Keep friends and relatives up-to-date
* Last, but certainly not least, your friends and relatives should be informed of your new whereabouts, particularly when it comes to those overseas who send Christmas and Birthday cards each year. Remember to let them know any change in home phone number as well.
Buy property for sale in South Africa
Sunday, January 18, 2009
Buy-to-Rent Property – Appealing Investment
With banks asking deposits on home loans, South African property owners can expect rental demand to increase significantly. Absa Home Loans’ Head Luthando Vutula says that it might take some time for banks to return to deposit-free home loans, resulting in people opting to rent rather than buy, and with interest rate set to fall this year, investors might find the buy-to-rent property more appealing.
The hike in rental demand can already be seen according to Trafalgar – South Africa’s national residential property managers. According to their CEO, Andrew Schaefer they kept their offices well staffed over the holiday to be ready for higher demand, although activity was slightly below last December’s.
However, some experts like Absa’s Gavin Opperman says that the current investment yield on the asset subclass of 0.4 percent to 0.6 percent per month of the value will have to change.
Valuer Erwin Rode and FNB property strategist John Loos also say yields would have to rise to somewhere between 6 percent and 8 percent per year.
"Residential property is easier to buy, to understand and to finance than commercial property, so the yield will be lower than the latter's 10-year yield of 9.2 percent," says Loos.
Rode added that that residential property is dominated by owner-occupiers at lower yields than commercial property. To get to the higher yields, rents will have to rise 30-40% over the next few year or prices will have to fall at that rate.
(The information in this article is courtesy of Business Report – Grab that rental property - 16 January 2009.)
Buy farms for sale in Montagu
The hike in rental demand can already be seen according to Trafalgar – South Africa’s national residential property managers. According to their CEO, Andrew Schaefer they kept their offices well staffed over the holiday to be ready for higher demand, although activity was slightly below last December’s.
However, some experts like Absa’s Gavin Opperman says that the current investment yield on the asset subclass of 0.4 percent to 0.6 percent per month of the value will have to change.
Valuer Erwin Rode and FNB property strategist John Loos also say yields would have to rise to somewhere between 6 percent and 8 percent per year.
"Residential property is easier to buy, to understand and to finance than commercial property, so the yield will be lower than the latter's 10-year yield of 9.2 percent," says Loos.
Rode added that that residential property is dominated by owner-occupiers at lower yields than commercial property. To get to the higher yields, rents will have to rise 30-40% over the next few year or prices will have to fall at that rate.
(The information in this article is courtesy of Business Report – Grab that rental property - 16 January 2009.)
Buy farms for sale in Montagu
Tuesday, January 13, 2009
Tough Market Reduces Agents
The information in this article is courtesy of RealEstateWeb (Market forces cull more agents – new stats – 14 January 2009)
With the number of estate agents cut by around 20% from 2008 it seems inevitable that this number might become even higher in 2009. RealEstateWeb reports that roughly one in every 4 agents in business in January last year has left the industry.
The Estate Agents Affairs Board (EAAB) has released figures stating that, as of last week, 30 528 existing agents had applied for the Fidelity Fund Certificate (FFC) renewals and almost 28 000 have been issued with their FCC’s. This certificate entitles agents to legally receive commission on sales.
According to the EAAB, 2603 existing agents renewed their FFC’s after the extended deadline on November 30 2008. Of the 43 000 agents that were given FFC last year, 26 000 failed to renew their certificates.
Tough economic conditions have forced agents to leave the industry, that only a few years ago, supplied work to 80 000 – 90 000 people.
Some of the agents left have already started businesses on the side to keep their heads above water. Tony Ferreira of Help-U-Sell in Mpumalanga is among those who have decided to throw in the towel.
There are however those who are staying positive in these tough times. Wilma Smit of Property Voyage in Pretoria said that her agency would definitely take on new agents this year. According to her, the 12 agents at her company did well in 2008.
For those agents who focus mainly on commercial and industrial property, things are looking better.
Buy property for sale in Ashton
With the number of estate agents cut by around 20% from 2008 it seems inevitable that this number might become even higher in 2009. RealEstateWeb reports that roughly one in every 4 agents in business in January last year has left the industry.
The Estate Agents Affairs Board (EAAB) has released figures stating that, as of last week, 30 528 existing agents had applied for the Fidelity Fund Certificate (FFC) renewals and almost 28 000 have been issued with their FCC’s. This certificate entitles agents to legally receive commission on sales.
According to the EAAB, 2603 existing agents renewed their FFC’s after the extended deadline on November 30 2008. Of the 43 000 agents that were given FFC last year, 26 000 failed to renew their certificates.
Tough economic conditions have forced agents to leave the industry, that only a few years ago, supplied work to 80 000 – 90 000 people.
Some of the agents left have already started businesses on the side to keep their heads above water. Tony Ferreira of Help-U-Sell in Mpumalanga is among those who have decided to throw in the towel.
There are however those who are staying positive in these tough times. Wilma Smit of Property Voyage in Pretoria said that her agency would definitely take on new agents this year. According to her, the 12 agents at her company did well in 2008.
For those agents who focus mainly on commercial and industrial property, things are looking better.
Buy property for sale in Ashton
Sunday, January 11, 2009
Property Expectations for 2009
iAfrica reports that despite the expectations for lower interest rates and inflation, the outlook for the South African residential property market in 2009 remains bleak.
According to Jacques Du Toit, senior property analyst at Absa, activity in the market are set to stay subdued up to the second half of the year while price in the middle segment of the market may decline by as much as 2.5 percent in nominal terms this year.
This year might also see a further decline in house prices of up to 8%. This is based on projected consumer price inflation trends to drop in nominal prices.
The Absa House Price Index showed on Friday that nominal annual average house price growth in the middle segment of the market slowed down to below 4% in 2008. This was the lowest price growth recorded since 1996.
Because of declined inflation during this year, we might see prime and mortgage interest rates cut by a cumulative 300 basis points during the course of 2009 to reach a level of 12.5% by year-end. Economic conditions are expected to remain depressed for most of the year. In 2008 we saw a 3% real economic growth, but expect a poor 1% growth for 2009.
Last year’s 2.7% real disposable income growth is set to drop to 1.5% for 2009 and house prices are also expected to remain under pressure.
Du Toit said that we could expect some relief toward the middle of 2009, with levels of activity and prices only improving from 2010 onwards.
The information in this article is courtesy of iAfrica (Property in 2009 – 10 January 2009).
Buy property for sale in Robertson
According to Jacques Du Toit, senior property analyst at Absa, activity in the market are set to stay subdued up to the second half of the year while price in the middle segment of the market may decline by as much as 2.5 percent in nominal terms this year.
This year might also see a further decline in house prices of up to 8%. This is based on projected consumer price inflation trends to drop in nominal prices.
The Absa House Price Index showed on Friday that nominal annual average house price growth in the middle segment of the market slowed down to below 4% in 2008. This was the lowest price growth recorded since 1996.
Because of declined inflation during this year, we might see prime and mortgage interest rates cut by a cumulative 300 basis points during the course of 2009 to reach a level of 12.5% by year-end. Economic conditions are expected to remain depressed for most of the year. In 2008 we saw a 3% real economic growth, but expect a poor 1% growth for 2009.
Last year’s 2.7% real disposable income growth is set to drop to 1.5% for 2009 and house prices are also expected to remain under pressure.
Du Toit said that we could expect some relief toward the middle of 2009, with levels of activity and prices only improving from 2010 onwards.
The information in this article is courtesy of iAfrica (Property in 2009 – 10 January 2009).
Buy property for sale in Robertson
Wednesday, January 7, 2009
Property Investment: Choose the Right Option
If you are considering investing in property there are a few options to choose from – all of them offering their own pros and cons.
According to Craig Hallowes, Association of Property Unit Trust spokesperson and Marriot CEO, Simon Pearse it is best to borrow money when the interest rates are at its highest point. This will ensure that you can afford the debt. It is also wise to invest when the property prices are at its lowest, resulting in a bigger return when the prices start increasing again.
The option when choosing a property investment include:
1. Direct Property Ownership
This investment includes buying your own property with the main idea of renting it out. This type of investment offers you full control over the property but lacks liquidity and demands a high entry cost. You also need to actively manage your investment.
2. Joint Venture or Partnership
Here you buy into an investment with the help of other parties. The advantage of this type of investment is that you gain access to higher value properties without paying it on your own. This investment also lacks liquidity and there is little or no diversification of assets. Apart from the low-income yield, there is also the odd chance that you might run into disagreements with your partners.
3. Property Syndication
This is an unlisted investment scheme that enables a group of investors to buy property and become part owners – either directly of indirectly. These schemes can be structured in different ways with a number of cost layers attached to them. This is beneficial because you pay lower individual entry cost as it is spread amongst a group of investors, but can involve very high maintenance costs. Besides the fact that there is no formal market (making it hard to control) there is also scope to manipulate property values. It is hard to exit this type of investment with the liquidity constraints that it offers.
4. Listed Property
This is Property Unit Trusts (PUT’s) and Property Loan Stock (PLS’s), which is effectively REIT’s. These are listed on a financial exchange like the JSE. The benefits of this type of investment are that it is highly liquid and managed by professionals who can select the best properties. This investment offers costs that leaves nothing to implications and protects the investors with a highly regulated market. The only disadvantage is that you can’t control which properties are purchased but you can sell in the very liquid market if you do not like the strategy of the PUT or PLS.
5. Exchange Traded Funds (ETF)
This investment is established as a collective investment scheme much like a unit trust. The aim here is to replicate the price and yield performance of a specified Index as far as possible. These units or shares are generally listed on a financial exchange like the JSE. Benefits include a low entry cost and easy access as well as flexibility. It is highly liquid and transparent in terms of the investment and interest and offers a well-regulated market. The downside is that you can’t manage your portfolio actively should you wish to.
6. Collective Investment Schemes
This evolves a unitised fund set up under a trust deed that allows investors to participate in a larger pool of property assets. This investment is highly liquid and managed by professionals. It offers explicit costs and a considerable diversification of assets both geographically and across sectors – all in a highly regulated market. A disadvantage is steep management fees.
7. Offshore Property
This investment can be made in any of the options above, however the additional dimension of offshore investment diversification is added, for example, property in Paris or London. This diversification is a great benefit as you can spread your risks across different geographical regions. The exchange rate risk is a disadvantage and so is the fact that you might not understand the foreign market and buy into low-quality properties. - Elizabeth McLachlan
Invest in property in South Africa
According to Craig Hallowes, Association of Property Unit Trust spokesperson and Marriot CEO, Simon Pearse it is best to borrow money when the interest rates are at its highest point. This will ensure that you can afford the debt. It is also wise to invest when the property prices are at its lowest, resulting in a bigger return when the prices start increasing again.
The option when choosing a property investment include:
1. Direct Property Ownership
This investment includes buying your own property with the main idea of renting it out. This type of investment offers you full control over the property but lacks liquidity and demands a high entry cost. You also need to actively manage your investment.
2. Joint Venture or Partnership
Here you buy into an investment with the help of other parties. The advantage of this type of investment is that you gain access to higher value properties without paying it on your own. This investment also lacks liquidity and there is little or no diversification of assets. Apart from the low-income yield, there is also the odd chance that you might run into disagreements with your partners.
3. Property Syndication
This is an unlisted investment scheme that enables a group of investors to buy property and become part owners – either directly of indirectly. These schemes can be structured in different ways with a number of cost layers attached to them. This is beneficial because you pay lower individual entry cost as it is spread amongst a group of investors, but can involve very high maintenance costs. Besides the fact that there is no formal market (making it hard to control) there is also scope to manipulate property values. It is hard to exit this type of investment with the liquidity constraints that it offers.
4. Listed Property
This is Property Unit Trusts (PUT’s) and Property Loan Stock (PLS’s), which is effectively REIT’s. These are listed on a financial exchange like the JSE. The benefits of this type of investment are that it is highly liquid and managed by professionals who can select the best properties. This investment offers costs that leaves nothing to implications and protects the investors with a highly regulated market. The only disadvantage is that you can’t control which properties are purchased but you can sell in the very liquid market if you do not like the strategy of the PUT or PLS.
5. Exchange Traded Funds (ETF)
This investment is established as a collective investment scheme much like a unit trust. The aim here is to replicate the price and yield performance of a specified Index as far as possible. These units or shares are generally listed on a financial exchange like the JSE. Benefits include a low entry cost and easy access as well as flexibility. It is highly liquid and transparent in terms of the investment and interest and offers a well-regulated market. The downside is that you can’t manage your portfolio actively should you wish to.
6. Collective Investment Schemes
This evolves a unitised fund set up under a trust deed that allows investors to participate in a larger pool of property assets. This investment is highly liquid and managed by professionals. It offers explicit costs and a considerable diversification of assets both geographically and across sectors – all in a highly regulated market. A disadvantage is steep management fees.
7. Offshore Property
This investment can be made in any of the options above, however the additional dimension of offshore investment diversification is added, for example, property in Paris or London. This diversification is a great benefit as you can spread your risks across different geographical regions. The exchange rate risk is a disadvantage and so is the fact that you might not understand the foreign market and buy into low-quality properties. - Elizabeth McLachlan
Invest in property in South Africa
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