The information in this article is courtesy of iAfrica ( GDP data fuels rate cut – 25 February 2009)
According to Rian Le Roux, economist at Old Mutual Investment Group South Africa (OMIGSA), there is a good chance that South Africa’s Reserve Bank will lower the interest rates yet again. This decision could be made by as early as the end of this week.
This comes after the economy decline for the first time in a decade in the last quarter of 2008, with the GDP shrinking by 1.8 percent quarter-on-quarter on a seasonally adjusted and annualised basis, from 0.2 percent growth in the third quarter.
The data confirm that the economy had been hard hit by the combination of the rise interest rates during August 2006 not to mention the recent global economic slump, said Le Roux. He added that investors should avoid over-reacting to this news and he further advised that they should focus on the long-term picture because things could’ve been worse as they had expected an even lower decline in GDP of –2.0%.
While the global economic slowdown will continue to negatively affect South African exporters, it will also give local companies a reason to cancel any capital expansion plans.
Le Roux is however positive that consumers should experience some relief in the months to come.
Buy property in Port Elizabeth
Tuesday, February 24, 2009
Monday, February 23, 2009
SA Property Market Recovery Being Hampered
PropertyWire, a premier global property news service, reports that South Africa has not been hit as hard as some international real estate sectors but there are factors that are hampering the recovery of the property market.
Although the residential market is going through a tough patch, the commercial sector in cities like Cape Town and Johannesburg shows promise, with several office developments due for completion in 2011. This is according to Colliers International Property that also says that the commercial sector remains the most important property business in the cities.
Sanett Uys, director of Colliers International Property and Facilities Management says that the South African property market was not hit as hard as some of the other international markets, but a number of factors, like the shortage of power followed by weak household demand, the lack of liquidity and the global downturn, are going to inhibit a turnaround until 2010.
Uys added that the property market’s exposure to foreign investment is limited, liquidity is restricted since the banks are not eager to lend and property fundamentals are still strong.
According to Colliers, 2009 might be an interesting one with the economic slowdown continuing to impact the property market. However, economists are predicting a turnaround in 2010 with economic growth bouncing back to 5.3%.
Although some areas have been hit hard by the downward market trends, experts are urging seller in these areas to try and hold on to their properties until the market recovers rather than to sell now at a loss.
Buy property in South Africa
Although the residential market is going through a tough patch, the commercial sector in cities like Cape Town and Johannesburg shows promise, with several office developments due for completion in 2011. This is according to Colliers International Property that also says that the commercial sector remains the most important property business in the cities.
Sanett Uys, director of Colliers International Property and Facilities Management says that the South African property market was not hit as hard as some of the other international markets, but a number of factors, like the shortage of power followed by weak household demand, the lack of liquidity and the global downturn, are going to inhibit a turnaround until 2010.
Uys added that the property market’s exposure to foreign investment is limited, liquidity is restricted since the banks are not eager to lend and property fundamentals are still strong.
According to Colliers, 2009 might be an interesting one with the economic slowdown continuing to impact the property market. However, economists are predicting a turnaround in 2010 with economic growth bouncing back to 5.3%.
Although some areas have been hit hard by the downward market trends, experts are urging seller in these areas to try and hold on to their properties until the market recovers rather than to sell now at a loss.
Buy property in South Africa
Wednesday, February 18, 2009
R35bn Development for Lanseria Airport
The information in this article is courtesy of Fin24 (Lanseria to get R35bn 'city' – 18 February 2009)
Lanseria International Airport will be the address of a massive mixed-use precinct said to be three times the size of the Sandton central business district.
Known only as the Cradle City, this project will comprise about 10 million m² of development bulk which will be worth an estimated R35bn when completed – the biggest single property development for Gauteng.
Developers Amari Land says that the idea is to create a complete city centre around Lanseria, which will embrace new urban design principles by integrating living, working, playing, trade and travel.
Markus Kaps, development director, says the project enjoys “the highest level of provincial and local government support”.
Developement of the first phase, including 450 000m² of business park combining industrial, office, retail and hotel components, is set to start in May 2009. The second phase will be a mixed-use area, including medium- and high-density houses as well as commercial and rental opportunities.
The total project, including all its 6 phases, is set to be rolled out over seven years.
Buy commercial property in South Africa
Lanseria International Airport will be the address of a massive mixed-use precinct said to be three times the size of the Sandton central business district.
Known only as the Cradle City, this project will comprise about 10 million m² of development bulk which will be worth an estimated R35bn when completed – the biggest single property development for Gauteng.
Developers Amari Land says that the idea is to create a complete city centre around Lanseria, which will embrace new urban design principles by integrating living, working, playing, trade and travel.
Markus Kaps, development director, says the project enjoys “the highest level of provincial and local government support”.
Developement of the first phase, including 450 000m² of business park combining industrial, office, retail and hotel components, is set to start in May 2009. The second phase will be a mixed-use area, including medium- and high-density houses as well as commercial and rental opportunities.
The total project, including all its 6 phases, is set to be rolled out over seven years.
Buy commercial property in South Africa
Tuesday, February 17, 2009
Mortgage Stress Intensifies
The information in this article is courtesy of Business Report(Mortgage stress escalates as negative equity takes hold – 17 February 2009)
According to Auction Alliance, the number of mortgage bondholders in South Africa experiencing difficulty in paying their bonds escalated from 8000 in the second quarter of last year to 35 000 in the fourth quarter. These bondholders are defined as being more than four months in arrears on their payments.
Real Levitt, chief executive of Auction Alliance says that 80% of these bondholders are likely to sell or lose their homes – voluntarily or forcibly.
One in 15 homes is in negative equity, where the value of the outstanding balance on the mortgage was higher than the current market value of the home. Levitt added that such bondholders were caught in a debt trap. This has increase to one in 20 homes two quarter ago.
Levitt explained that negative equity figures were based on homes that were currently on the market, but should be treated with caution because they were not representative of the total housing market. He added that South Africa has joined an international landslide in the property market since the market is now in the third quarter of a technical recession that has intensified since November 2008.
Aggressive interest rates, according to Levitt, could be the answer to alleviating the severe mortgage stress.
Click here for a free bond application
According to Auction Alliance, the number of mortgage bondholders in South Africa experiencing difficulty in paying their bonds escalated from 8000 in the second quarter of last year to 35 000 in the fourth quarter. These bondholders are defined as being more than four months in arrears on their payments.
Real Levitt, chief executive of Auction Alliance says that 80% of these bondholders are likely to sell or lose their homes – voluntarily or forcibly.
One in 15 homes is in negative equity, where the value of the outstanding balance on the mortgage was higher than the current market value of the home. Levitt added that such bondholders were caught in a debt trap. This has increase to one in 20 homes two quarter ago.
Levitt explained that negative equity figures were based on homes that were currently on the market, but should be treated with caution because they were not representative of the total housing market. He added that South Africa has joined an international landslide in the property market since the market is now in the third quarter of a technical recession that has intensified since November 2008.
Aggressive interest rates, according to Levitt, could be the answer to alleviating the severe mortgage stress.
Click here for a free bond application
Monday, February 16, 2009
12% of SA Failing to Pay Rent
Landlords Struggle to Collect Rent
The information in this article is courtesy of Realestateweb ( SA’s worst and best tenants – 16 February 2009)
According to the Tenant Profile Network (TPN), the fourth quarter of 2008 saw 54% of tenants pay their monthly rental on time. The third quarter showed a similar figure.
Michelle Dickens, managing director of TNP, says the national average is 12% of tenants who cannot meet the their rental commitments at all. Also, 60% of leases obtain only 0,5 to 0,75% rent value as a percentage of the market value. This is bad news for investors who are left with a shortfall on their mortgages and levy payments.
Of the entire county, Kwa-Zulu Natal had the worst performance, with 18% of tenants failing to pay rent. Both the Eastern Cape and Gauteng recorded 10% each while the Western Cape had only 8%.
It seems like tenants paying R3000-R7000 income bracket are more likely to meet their commitments with an average of 61% making regular or full payments. Problems with rent not paid on time usually persist in the rental price bracket of R5000-R8000.
· TPN is a credit bureau which provides credit screening and reports for the rental property market.
Rent property in South Africa
The information in this article is courtesy of Realestateweb ( SA’s worst and best tenants – 16 February 2009)
According to the Tenant Profile Network (TPN), the fourth quarter of 2008 saw 54% of tenants pay their monthly rental on time. The third quarter showed a similar figure.
Michelle Dickens, managing director of TNP, says the national average is 12% of tenants who cannot meet the their rental commitments at all. Also, 60% of leases obtain only 0,5 to 0,75% rent value as a percentage of the market value. This is bad news for investors who are left with a shortfall on their mortgages and levy payments.
Of the entire county, Kwa-Zulu Natal had the worst performance, with 18% of tenants failing to pay rent. Both the Eastern Cape and Gauteng recorded 10% each while the Western Cape had only 8%.
It seems like tenants paying R3000-R7000 income bracket are more likely to meet their commitments with an average of 61% making regular or full payments. Problems with rent not paid on time usually persist in the rental price bracket of R5000-R8000.
· TPN is a credit bureau which provides credit screening and reports for the rental property market.
Rent property in South Africa
Wednesday, February 11, 2009
CGT Boost for Property Market – Budget 2009
The information in this article is courtesy of Realestateweb (Property market gets CGT boost – 11 February 2009)
Thanks to Finance Minister, Trevor Manuel, home sellers can expect a tax boost. This comes after the 2009 Budget Speech revealed that government will be raising the capital gains tax (CGT) exclusion on the sale of primary residences to a gross value of R2m form R1,5m. Manuel also intends to make the calculation simpler and reduce the compliance burden by basing the CGT calculation on gross proceeds.
At the moment CGT is applicable on primary residence sold for more than R1.5m and is calculated as a percentage of the gain.
The National Treasury in Budget states that the capital gains tax regime contains several exclusions designed to reduce the tax burden for lower-and middle-income earners. One such exclusion is for an individual’s primary residence: a capital gain or loss of up to R1.5m upon the disposal of such a residence is excluded from taxable capital gains.
This means that the taxpayer would have a better understanding of how the exclusion applies on disposal, without resorting to complex capital gain calculations. However, the capital gains tax exclusion will fully apply to the primary residence up to a gross value of R2m, according to the Treasury.
As a result, people selling their primary residence with a gross value below R2m will not be liable for capital gains tax. For primary residences valued above this threshold the normal rules - including the current R1.5m capital gain or loss exclusion – will apply.
The property market will also be influence by the annual exclusion ceiling for capital tax and losses that went up from R16 000 to R17 000 for individuals.
Buy property in Johannesburg
Thanks to Finance Minister, Trevor Manuel, home sellers can expect a tax boost. This comes after the 2009 Budget Speech revealed that government will be raising the capital gains tax (CGT) exclusion on the sale of primary residences to a gross value of R2m form R1,5m. Manuel also intends to make the calculation simpler and reduce the compliance burden by basing the CGT calculation on gross proceeds.
At the moment CGT is applicable on primary residence sold for more than R1.5m and is calculated as a percentage of the gain.
The National Treasury in Budget states that the capital gains tax regime contains several exclusions designed to reduce the tax burden for lower-and middle-income earners. One such exclusion is for an individual’s primary residence: a capital gain or loss of up to R1.5m upon the disposal of such a residence is excluded from taxable capital gains.
This means that the taxpayer would have a better understanding of how the exclusion applies on disposal, without resorting to complex capital gain calculations. However, the capital gains tax exclusion will fully apply to the primary residence up to a gross value of R2m, according to the Treasury.
As a result, people selling their primary residence with a gross value below R2m will not be liable for capital gains tax. For primary residences valued above this threshold the normal rules - including the current R1.5m capital gain or loss exclusion – will apply.
The property market will also be influence by the annual exclusion ceiling for capital tax and losses that went up from R16 000 to R17 000 for individuals.
Buy property in Johannesburg
Tuesday, February 10, 2009
R36.54m Paid for House in Bantry Bay
This information in this article is courtesy of Realestateweb (Bantry Bay property sold for R36,5m – 9 February 2009)
Pam Golding Properties has secured the highest ever price paid for a house in Bantry Bay - R36.54 million. This luxury home is situated on a rare half-acre plot, with over 1000m² space. The previous record of R30 million was achieved last year.
According to Basil Moraitis, manager of PGP Atlantic Seaboard and City Bowl, the buyers are a young couple from the UK who intend to use this residence as their summer home. The house is situated among other celebrity homes and is completely sheltered from the Cape South-Easter.
Moraitis said that the house was sold within 4 weeks of listing, despite the current market conditions. According to him this is testament to the fact that accurate pricing is more important than ever in today’s market.
Buy Cape Town Property
Pam Golding Properties has secured the highest ever price paid for a house in Bantry Bay - R36.54 million. This luxury home is situated on a rare half-acre plot, with over 1000m² space. The previous record of R30 million was achieved last year.
According to Basil Moraitis, manager of PGP Atlantic Seaboard and City Bowl, the buyers are a young couple from the UK who intend to use this residence as their summer home. The house is situated among other celebrity homes and is completely sheltered from the Cape South-Easter.
Moraitis said that the house was sold within 4 weeks of listing, despite the current market conditions. According to him this is testament to the fact that accurate pricing is more important than ever in today’s market.
Buy Cape Town Property
Sunday, February 8, 2009
Rental Demand Still Rising
(The information in this article is courtesy of BusinessDay - Rents rise as property market slows – 4 February 2009)
The Trafalgar rental index show that rent rose by around 13% from January to December last year. This can mainly be contributed to the to stricter lending criteria in the last quarter of 2008, urging people who were unable to get a home loan approve, to rent.
According to Samual Seeff, CEO of Seeff Properties, these strict lending criteria will sustain higher rental demand throughout 2009.
The index also showed regional increases ranging from 9% in Johannesburg to 21% in Port Elizabeth. Cape Town rental prices rose 11%, KwaZulu-Natal rose 14,5% and rents in East London were 15% higher than December 2007. Pretoria rents rose 16%.
According to Seeff it is expected that inflation and the interest rate environment will improve, however customers will use the opportunity to improve household debt situation and other obligations before buying a house.
Barry Everitt, MD of Chas Everitt International, says banks will basically determine where the rental market goes this year. He says the property market will continue to have a tough year as long as banks continue to tighten their lending criteria.
Trafalgar MD Andrew Schaefer warned investors not to increase rent too fast in difficult times - where cash flow is far more valuable than profit.
Buy property in Port Elizabeth
The Trafalgar rental index show that rent rose by around 13% from January to December last year. This can mainly be contributed to the to stricter lending criteria in the last quarter of 2008, urging people who were unable to get a home loan approve, to rent.
According to Samual Seeff, CEO of Seeff Properties, these strict lending criteria will sustain higher rental demand throughout 2009.
The index also showed regional increases ranging from 9% in Johannesburg to 21% in Port Elizabeth. Cape Town rental prices rose 11%, KwaZulu-Natal rose 14,5% and rents in East London were 15% higher than December 2007. Pretoria rents rose 16%.
According to Seeff it is expected that inflation and the interest rate environment will improve, however customers will use the opportunity to improve household debt situation and other obligations before buying a house.
Barry Everitt, MD of Chas Everitt International, says banks will basically determine where the rental market goes this year. He says the property market will continue to have a tough year as long as banks continue to tighten their lending criteria.
Trafalgar MD Andrew Schaefer warned investors not to increase rent too fast in difficult times - where cash flow is far more valuable than profit.
Buy property in Port Elizabeth
Thursday, February 5, 2009
Interest Rate Gets Chopped
This information in this article is courtesy of Realestateweb (Mboweni's big chop: what it means for you – 6 February 2009)
South Africa’s interest rate now stands at 11,5%. This comes after the South African Reserve Bank governor, Tito Mboweni, announced that they've shaved a 100 basis points of the previous rate. More good news is that more cuts are expected.
What this really means is that mortgages payers can expect to save R366 on a R500 000 home (20 year term) and R733 on a mortgage of R1m (20 year term).
Although this does not mean the property market has reach the bottom of the cycle, it does show confidence in the market.
According to Saul Greffen, chief executive of mortgage originator Ooba, tight lending criteria continues to be a problem.
"We are hoping that banks will begin to relax their lending policies and this, coupled with home owners' ability to afford more, should begin to revive the property market," he said.
Herschel Jawitz CEO of Jawitz Properties believes our biggest challenge is consumer confidence. According to him confidence will remain low as long as people are concern about job security, making repayments and keeping their heads above water.
Buy property for sale in Napier
South Africa’s interest rate now stands at 11,5%. This comes after the South African Reserve Bank governor, Tito Mboweni, announced that they've shaved a 100 basis points of the previous rate. More good news is that more cuts are expected.
What this really means is that mortgages payers can expect to save R366 on a R500 000 home (20 year term) and R733 on a mortgage of R1m (20 year term).
Although this does not mean the property market has reach the bottom of the cycle, it does show confidence in the market.
According to Saul Greffen, chief executive of mortgage originator Ooba, tight lending criteria continues to be a problem.
"We are hoping that banks will begin to relax their lending policies and this, coupled with home owners' ability to afford more, should begin to revive the property market," he said.
Herschel Jawitz CEO of Jawitz Properties believes our biggest challenge is consumer confidence. According to him confidence will remain low as long as people are concern about job security, making repayments and keeping their heads above water.
Buy property for sale in Napier
Tuesday, February 3, 2009
Emigration-Motivated Property Sales Down
The information in this article is courtesy of Business Day (Fewer emigrants selling their homes - 29 January 2009)
It seems that most South Africans has come to except the political changes in the country. This can be seen in the decline of people selling their homes to emigrate form a peak of 20% in the 3rd quarter of last year to 14% in the final quarter.
According to FNB Home Loans the number of foreign buyers in South Africa stands at a total of 6% - with the majority of these buyers being from Africa. This means that there has been a drop in the number of European and American buyers.
John Loos, property strategist at FNB Home Loan said that the high number of South Africans emigrating during the first half of 2008 can be explain by the negative sentiment following the change in leadership of the ANC, the Eskom power crises and the problems in Zimbabwe.
Loos added that the global economical crisis has also played a role in the fall of emigration-motivated property sales. South Africans are definitely thinking twice before moving to the UK, which are at the moment entering a recession. This might also mean that we could see the return of a large number of expatriates. The poor economical conditions might also explain the drop in the number of European and American buyers since they are now re-prioritising spending.
The property barometer also indicated that the number of investment properties sold below the seller’s original purchase price has risen from 12% during the third quarter of last year to 19% in the last quarter.
On a more positive note, the barometer also showed that the average time a property was on the market improved from 20 weeks and a day to 15 weeks and three days. The number of first-time buyers also improved from 12% to 17% and the buy-to-let market declined from 14% to 12 %.
According to the property barometer the reason for selling houses still remains downscaling due to financial pressure.
Buy property for sale in Cape Town
It seems that most South Africans has come to except the political changes in the country. This can be seen in the decline of people selling their homes to emigrate form a peak of 20% in the 3rd quarter of last year to 14% in the final quarter.
According to FNB Home Loans the number of foreign buyers in South Africa stands at a total of 6% - with the majority of these buyers being from Africa. This means that there has been a drop in the number of European and American buyers.
John Loos, property strategist at FNB Home Loan said that the high number of South Africans emigrating during the first half of 2008 can be explain by the negative sentiment following the change in leadership of the ANC, the Eskom power crises and the problems in Zimbabwe.
Loos added that the global economical crisis has also played a role in the fall of emigration-motivated property sales. South Africans are definitely thinking twice before moving to the UK, which are at the moment entering a recession. This might also mean that we could see the return of a large number of expatriates. The poor economical conditions might also explain the drop in the number of European and American buyers since they are now re-prioritising spending.
The property barometer also indicated that the number of investment properties sold below the seller’s original purchase price has risen from 12% during the third quarter of last year to 19% in the last quarter.
On a more positive note, the barometer also showed that the average time a property was on the market improved from 20 weeks and a day to 15 weeks and three days. The number of first-time buyers also improved from 12% to 17% and the buy-to-let market declined from 14% to 12 %.
According to the property barometer the reason for selling houses still remains downscaling due to financial pressure.
Buy property for sale in Cape Town
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