The information in this article is courtesy of Business Report (Mboweni signals the last rate cut – 28 May 2009)
The South African Reserve Bank’s monetary committee again gave consumer reason to smile when they cut the repo rate by another 100 basis point, leaving the interest rate at 7.5%. This is on top of the 4.5% that was shaved of the interest rate over the past four months.
Reserve Bank Governor, Tito Mboweni, announced the cut yesterday and added that the monetary policy committee would not consider any further significant rate cuts. He also warned that the MPC has done as much as it can.
Mboweni feels that cartel and monopoly pricing practices in the food and steel industries, and Eskom's controversial request for a 34 percent interim increase in electricity tariffs are not helping their efforts to bring down inflation that recorded 8,4% last months.
Mboweni responded to a question by saying that the fact that the real repo rate was negative was one factor in this decision and the other was that the effect of the previous rate cut was yet to be seen. According to Mboweni, the challenge was to balance concerns about consumer inflation against fears about the depth of the recession.
The deciding factor, however, was concerns over the 208 000 job losses in the first quarter and a sharp contraction in gross domestic product (GDP).
Mboweni was initially reluctant to start the rate cut cycle mainly due to the fact that rate cuts weaken a currency. Fortunately the Rand has been stable, even strengthening against major currencies at times.
Friday, May 29, 2009
Wednesday, May 27, 2009
SA Officially in Recession
The information in this article is courtesy of The Times (SA hits first recession in 17 years – 27 May 2009).
South Africa has entered its first recession in 17 years. This comes after the economy decline by an annualised 6,4% in the first 3 months of 2009 – a result that was much worse than expected.
This announcement will back the case for another 100 basis point rate cut when the Monetary Committee meets on Thursday, 28 May.
It is expected that the economy is going to continue its downward spiral but not by much.
According to Joe de Beer, executive manager for national accounts at Statistics South Africa, the decline in economic activity is widespread across the economy with both the mining and manufacturing sectors posting the lowest quarter growth rates on record.
All signs point to a bigger rate cut with Jeff Gable, head of research at ABSA Capital and other analyst agreeing that the GDP data would likely tip the scale in favour of a full percentage point cut.
Central bank Governor Tito Mboweni is due to announce the rates decision from 13:00 on Thursday, when the monetary policy committee concludes a 2-day meeting.
South Africa has entered its first recession in 17 years. This comes after the economy decline by an annualised 6,4% in the first 3 months of 2009 – a result that was much worse than expected.
This announcement will back the case for another 100 basis point rate cut when the Monetary Committee meets on Thursday, 28 May.
It is expected that the economy is going to continue its downward spiral but not by much.
According to Joe de Beer, executive manager for national accounts at Statistics South Africa, the decline in economic activity is widespread across the economy with both the mining and manufacturing sectors posting the lowest quarter growth rates on record.
All signs point to a bigger rate cut with Jeff Gable, head of research at ABSA Capital and other analyst agreeing that the GDP data would likely tip the scale in favour of a full percentage point cut.
Central bank Governor Tito Mboweni is due to announce the rates decision from 13:00 on Thursday, when the monetary policy committee concludes a 2-day meeting.
Tuesday, May 26, 2009
Call For 150 Basis Point Cut
The information in this article is courtesy of Fin24 (4200 SA firms to shut in ’09 – 25 May 2009).
According to Statistics South Africa, a total of 349 liquidations were recorded for April 2009 – an increase of 41,3% year-on-year. These liquidations mostly occurred in the financing, insurance, real estate and business services. Fin24 reported that 308 of these liquidations were voluntary, while 41 were compulsory.
Meanwhile a leading economist suggested that a cut of 150 basis points in the repo rate is needed to halt the slide in the real economy, as around 4200 corporate closures could be seen this year.
According to Luke Doig, senior economist at Credit Guarantee Insurance Corporation, the local real economy has been hit hard by a decrease in demand and the effect of lower interest rates are yet to kick in.
Doig recons a 150 basis point cut by the Monetary Policy Committee later in the week could be the answer that they have been looking for to halt the slide. He added that they have seen some positive signs of a let-up in the severity and occurrence of potential payment default, which might indicate that the bottom has been reached.
South Africans can expect the rate cut announcement by the Monetary Policy Committee shortly after 3pm on Thursday, 28 May 2009.
According to Statistics South Africa, a total of 349 liquidations were recorded for April 2009 – an increase of 41,3% year-on-year. These liquidations mostly occurred in the financing, insurance, real estate and business services. Fin24 reported that 308 of these liquidations were voluntary, while 41 were compulsory.
Meanwhile a leading economist suggested that a cut of 150 basis points in the repo rate is needed to halt the slide in the real economy, as around 4200 corporate closures could be seen this year.
According to Luke Doig, senior economist at Credit Guarantee Insurance Corporation, the local real economy has been hit hard by a decrease in demand and the effect of lower interest rates are yet to kick in.
Doig recons a 150 basis point cut by the Monetary Policy Committee later in the week could be the answer that they have been looking for to halt the slide. He added that they have seen some positive signs of a let-up in the severity and occurrence of potential payment default, which might indicate that the bottom has been reached.
South Africans can expect the rate cut announcement by the Monetary Policy Committee shortly after 3pm on Thursday, 28 May 2009.
Monday, May 25, 2009
13 Easy Ways to Market Your Property Website Offline
Marketing your website is as important as having one. That’s why many real estate agencies spend a large amount of time and money on online marketing strategies, including search engines optimisation, email marketing, and pay-per-click campaigns. These all-important methods are great ways to direct traffic to your site, but the marketing of your website will be incomplete without offline advertising. The good news is that there are easy, inexpensive ways to effectively market your website offline. Here are some ideas:
1. Use Corporate Stationary
It is extremely important to use every opportunity you get to market your website. Always print you web address on all your corporate stationary. This includes letterheads, fax coversheets, envelopes, business cards, email signatures etc.
2. Drive Advertising with Company Vehicles
Printing magnetic decals with your company logo and web address is a cheap and effective way to advertise your website. An even cheaper alternative is to stick a bumper sticker with your details on your car or company transport.
3. Wear Your Website
Buy t-shirts and print you web address on it. Ask your employees to wear these t-shirts to the gym or make Fridays your t-shirt day at work. This is a fun and inexpensive way to market your company’s website.
4. Spread Flyers
Distribute flyers with you website’s details on it wherever you go. Carry a role of tape and flyers with you and put it up when you see an opportunity. Ask friends and family to help you distribute flyers by displaying it at their place of work.
5. Let your Voice Message Speak for You
Leave your website address on you voice message and encourage callers to visit the site for information. It is really as easy as that.
6. Utilise For Sale/On Show Boards
All real estate agencies use boards to indicate property for sale or show houses. Make sure that your web address is printed on these boards. By using a small space you can market your property listings effectively.
7. Mark Marketing Materials
Brochures, flyers and ads in the newspaper can be use to advertise you website. These marketing materials reach a large audience and can be very effective to drive traffic to you site.
8. Give It Away
Promotional giveaways are a great way to market your website offline. Freebies can be anything from mugs and pens to calendars and fridge magnets. These are things that people use everyday and provide you with a great opportunity to market your website.
9. Become a Sponsor
Sponsor the local soccer team's jerseys and let them display you web address on the back of the jerseys or sponsor the prize for a competition. This will give you a chance to give your website more exposure.
10. Use Digital Billboards
High traffic areas usually have a digital billboard next to the road. This is a golden opportunity for a real estate agent to market his or her website.
11. Stamp Your Mail
Make sure your website address is display on all mail and packages. Design a stamp with your URL engraved in it. Use red ink to stamp your website’s address on the envelope or package to make it stand out.
12. Network
Always carry your business card (with your web address printed on it) around with you. Attend networking events and hand out your business card to other business owners or contacts.
13. Word of Mouth
Ask family, friends and employees to tell potential clients about your website and the services you render.
Wednesday, May 20, 2009
Mortgage Stress On The Rise
The information in this article is courtesy of Business Report (Mortgage stress set to increase – 20 May 2009)
Alliance Group Auctioneers believes that properties that are two months behind with their payments is set to increase in the second quarter of the year.
The Distressed Asset Index, which is due to be released by Alliance Group at the end of June, indicates that mortgage stress (2 months behind on mortgage payments) will increase from 125 000 home owners to 200 000 home owners in the second quarter. The index also shows that severe mortgage stress (4 months behind on payments) will shoot up from 55 000 to 85 000.
According to Rael Levitt, CEO of Alliance Group, the market is expecting “jumbo mortgage distress” in luxury as well as developments and golf estates. He added that there is also some distress in the commercial property market.
Another shocking find by the Distressed Asset Index is that 80% of bondholders who were in severe distress would in all likelihood have to sell their homes. This led to a new programme by Alliance Group where real estate agents could earn commission by bringing buyers to auctions.
Levitt said: “Real estate agents and auctioneers will combine forces to assist struggling home owners to sell their properties successfully.”
Adding to this, Levitt said that the Broker Participation Programme would allow all brokers and estate agents to introduce buyers to properties that were being bought to the auction floor through various residential property recovery programmes.
Alliance Group Auctioneers believes that properties that are two months behind with their payments is set to increase in the second quarter of the year.
The Distressed Asset Index, which is due to be released by Alliance Group at the end of June, indicates that mortgage stress (2 months behind on mortgage payments) will increase from 125 000 home owners to 200 000 home owners in the second quarter. The index also shows that severe mortgage stress (4 months behind on payments) will shoot up from 55 000 to 85 000.
According to Rael Levitt, CEO of Alliance Group, the market is expecting “jumbo mortgage distress” in luxury as well as developments and golf estates. He added that there is also some distress in the commercial property market.
Another shocking find by the Distressed Asset Index is that 80% of bondholders who were in severe distress would in all likelihood have to sell their homes. This led to a new programme by Alliance Group where real estate agents could earn commission by bringing buyers to auctions.
Levitt said: “Real estate agents and auctioneers will combine forces to assist struggling home owners to sell their properties successfully.”
Adding to this, Levitt said that the Broker Participation Programme would allow all brokers and estate agents to introduce buyers to properties that were being bought to the auction floor through various residential property recovery programmes.
Tuesday, May 19, 2009
Banks Constraining Economy
(The information in this article is courtesy of Fin24 - Banks "Throttling the Economy" - 19 May 2009)
Large commercial banks are constraining the economy while the housing market threatens to collapse and millions of consumers are in debt. Among those agreeing with this statement is Reserve Bank Governor, Tito Mboweni, who is also accusing the banks of holding on to credit and aggressively pursuing the indebted.
The debt counsellors Consumer Assist said that property sales are down by 30%, mainly due to the banks not issuing loans.
According to debt counsellors, creditors were going after lenders aggressively, especially where vehicles and mortgages were involved.
New statistics also showed that 46% of tenants couldn’t pay their full rental each month, according to Consumer Assist.
CEO of Consumer Assist, Andre Snyman, said that many indebted consumers don’t realise that by selling their houses and cars don’t let them off the hook. He advised that such individuals should immediately go under debt counselling so the terms of the loan can be structured and they don’t have to lose the car or the house.
He stressed that it is critical for heavily indebted consumers to get help before legal actions is taken against them, as they are constrained in how much they can assist once legal action has begun.
Snyman stated that they are currently helping 66 759 people and the figure was growing by 7000 per month. They expect the number of people receiving debt counselling will grow by 300% this year.
Snyman is convinced that debt counselling is making a difference even though banks and creditors are trying to resist it.
"Once an individual is under debt counselling, no one can touch his or her assets for the first 60 days while the debts are being renegotiated," Snyman explained.
After that, Snyman explained, creditors cannot remove assets as long as the person keeps paying back, according to the restructured loan or credit agreement.
Snyman would like to see government and businesses developing systems to better help those trying to get out of debt, as consumers are still confused as about how to use debt counselling.
Large commercial banks are constraining the economy while the housing market threatens to collapse and millions of consumers are in debt. Among those agreeing with this statement is Reserve Bank Governor, Tito Mboweni, who is also accusing the banks of holding on to credit and aggressively pursuing the indebted.
The debt counsellors Consumer Assist said that property sales are down by 30%, mainly due to the banks not issuing loans.
According to debt counsellors, creditors were going after lenders aggressively, especially where vehicles and mortgages were involved.
New statistics also showed that 46% of tenants couldn’t pay their full rental each month, according to Consumer Assist.
CEO of Consumer Assist, Andre Snyman, said that many indebted consumers don’t realise that by selling their houses and cars don’t let them off the hook. He advised that such individuals should immediately go under debt counselling so the terms of the loan can be structured and they don’t have to lose the car or the house.
He stressed that it is critical for heavily indebted consumers to get help before legal actions is taken against them, as they are constrained in how much they can assist once legal action has begun.
Snyman stated that they are currently helping 66 759 people and the figure was growing by 7000 per month. They expect the number of people receiving debt counselling will grow by 300% this year.
Snyman is convinced that debt counselling is making a difference even though banks and creditors are trying to resist it.
"Once an individual is under debt counselling, no one can touch his or her assets for the first 60 days while the debts are being renegotiated," Snyman explained.
After that, Snyman explained, creditors cannot remove assets as long as the person keeps paying back, according to the restructured loan or credit agreement.
Snyman would like to see government and businesses developing systems to better help those trying to get out of debt, as consumers are still confused as about how to use debt counselling.
Friday, May 15, 2009
2,5% Growth Expected for SA in 2010
The information in this article is courtesy of Mail & Guardian Online (Economy to see 2,5% growth in 2010 – 14 May 2009)
Ettienne Le Roux, senior economist at Rand Merchant Bank recons that South Africa’s economy might see up to 2,5% growth in 2010.
Le Roux announced this prediction while he was addressing the Steel and Engineering Industries Federation of South Africa’s annual conference in Johannesburg where he added that this figure should not be considered a bad performance.
Le Roux explained that the many “shock absorbers” that the country has in place won’t prevent a recession. These shock absorbers included a flexible rand exchange rate, counter cyclical policies, lower inflation, a social safety net, falling interest rates and infrastructure spend – all things that will allow South Africa to recover around the end of 2009 into 2010.
Le Roux said that leading up to the global financial crisis, the world had been in a bizarre state of stable disequilibrium and the surplus countries had allowed funds to flow into the deficit countries. Also, inflation was low and policy makers were complacent and there was a reduction in risk aversion. All of this, according to Le Roux was a breeding ground for problems.
"Interest rates had to go up and the rest is history," he said. He added that South Africa had enjoyed a boom period in 2003 where it imported more than it exported, resulting in a huge current account deficit.
He noted that both inflation and rates were low resulting in unsustainable spending, a rise in inflation and the monetary policy tightened.
This also led to the property bubble bursting and assets on balance sheets devaluated. Because the banks had problems they didn’t lend – a scenario where the economy can’t grow. Stimulus packages by governments, however, prevented a great depression. Le Roux explained that instead we have a recession in 2009.
"When there is a global upswing, South Africa tends to outperform global growth, but when there is a global downturn, we tend to under perform global growth."
He added that being a deficit country, meant that we suddenly no longer look attractive. Mining and manufacturing has been severely hit and because the consumer matters when it comes to our country’s economy, South Africa is now also suffering from a slow demand.
According to Le Roux this means that we need to get the consumers going if we want to restart the economy. He added that banks are not lending easily at the moment but once the economy stabilized we can expect banks to ease lending criteria.
Ettienne Le Roux, senior economist at Rand Merchant Bank recons that South Africa’s economy might see up to 2,5% growth in 2010.
Le Roux announced this prediction while he was addressing the Steel and Engineering Industries Federation of South Africa’s annual conference in Johannesburg where he added that this figure should not be considered a bad performance.
Le Roux explained that the many “shock absorbers” that the country has in place won’t prevent a recession. These shock absorbers included a flexible rand exchange rate, counter cyclical policies, lower inflation, a social safety net, falling interest rates and infrastructure spend – all things that will allow South Africa to recover around the end of 2009 into 2010.
Le Roux said that leading up to the global financial crisis, the world had been in a bizarre state of stable disequilibrium and the surplus countries had allowed funds to flow into the deficit countries. Also, inflation was low and policy makers were complacent and there was a reduction in risk aversion. All of this, according to Le Roux was a breeding ground for problems.
"Interest rates had to go up and the rest is history," he said. He added that South Africa had enjoyed a boom period in 2003 where it imported more than it exported, resulting in a huge current account deficit.
He noted that both inflation and rates were low resulting in unsustainable spending, a rise in inflation and the monetary policy tightened.
This also led to the property bubble bursting and assets on balance sheets devaluated. Because the banks had problems they didn’t lend – a scenario where the economy can’t grow. Stimulus packages by governments, however, prevented a great depression. Le Roux explained that instead we have a recession in 2009.
"When there is a global upswing, South Africa tends to outperform global growth, but when there is a global downturn, we tend to under perform global growth."
He added that being a deficit country, meant that we suddenly no longer look attractive. Mining and manufacturing has been severely hit and because the consumer matters when it comes to our country’s economy, South Africa is now also suffering from a slow demand.
According to Le Roux this means that we need to get the consumers going if we want to restart the economy. He added that banks are not lending easily at the moment but once the economy stabilized we can expect banks to ease lending criteria.
Friday, May 8, 2009
Innovative Move Aims To Help Market
The information in this article is courtesy of The Times (Real estate deal of the Century – 7 May 2009)
The ailing property market has taken its toll with only 35 000 agents remaining out of the 90 000 registered in the boom times.
In an effort to boost the struggling market, Century 21 - one of the world’s largest property groups - is offering 3 franchises worth R200 000 up for grabs.
Colleen Gray, managing director of Century 21 says that difficult times call for innovative solutions and they aim to make a difference with this initiative.
Century 21 has more than 8500 offices and 150 000 agents in around 67 countries around the world.
To enter the competition, you have to be older than 21 and registered with the Estate Agents Affairs Board. Those interested can visit www.century21.co.za for more information. The deadline for this golden opportunity is 31 May 2009.
The ailing property market has taken its toll with only 35 000 agents remaining out of the 90 000 registered in the boom times.
In an effort to boost the struggling market, Century 21 - one of the world’s largest property groups - is offering 3 franchises worth R200 000 up for grabs.
Colleen Gray, managing director of Century 21 says that difficult times call for innovative solutions and they aim to make a difference with this initiative.
Century 21 has more than 8500 offices and 150 000 agents in around 67 countries around the world.
To enter the competition, you have to be older than 21 and registered with the Estate Agents Affairs Board. Those interested can visit www.century21.co.za for more information. The deadline for this golden opportunity is 31 May 2009.
Wednesday, May 6, 2009
House Prices Keep Falling
The information in this article is courtesy of Mail&Guardian (House prices continue to deteriorate – 4 May 2009).
House prices continued to fall during April. This finding by the FNB House Price Index is mainly due to a sizeable oversupply that had built-up in the residential market.
John Loos, property economist at FNB said that the index had reached double-digit year-on-year average house price deflation for the first time reaching -10,2%. This was last seen at the end of 2006.
The recent interest rate cuts, according to Loos, might not be enough to break the downward cycle, as the significant oversupply of property on the market will take some time to be mopped up.
The troubled global economy and its impact on South Africa’s economy is the key threat to the housing market according to Loos. He added that May is an important month for the local economy with some key political matters to be settled.
Loos concluded by saying that it is crucial for the new political leaders to send out the right signals as political matter plays a huge role in a thin residential market.
House prices continued to fall during April. This finding by the FNB House Price Index is mainly due to a sizeable oversupply that had built-up in the residential market.
John Loos, property economist at FNB said that the index had reached double-digit year-on-year average house price deflation for the first time reaching -10,2%. This was last seen at the end of 2006.
The recent interest rate cuts, according to Loos, might not be enough to break the downward cycle, as the significant oversupply of property on the market will take some time to be mopped up.
The troubled global economy and its impact on South Africa’s economy is the key threat to the housing market according to Loos. He added that May is an important month for the local economy with some key political matters to be settled.
Loos concluded by saying that it is crucial for the new political leaders to send out the right signals as political matter plays a huge role in a thin residential market.
Monday, May 4, 2009
Rate Cut: How Much Are You Saving?
Tito Mboweni announced another 100-basis point rate cut on Thursday, bring it down to 8,5%. This means bondholders who have a Prime related mortgage can expect to have some more cash left in their wallets from next month. Here is a break down of what you can expect if you are paying your mortgage over 20 years.
R750 000 bond = R528.67 savings per month
R1 000 000 bond = R704.90 in savings per month
R1 500 000 bond = R1057.34 in savings per month
R750 000 bond = R528.67 savings per month
R1 000 000 bond = R704.90 in savings per month
R1 500 000 bond = R1057.34 in savings per month
Cut Positive But Not Enough
The information in this article is courtesy of iAfrica (Property hails rate cut – 30 April 2009).
A step in the right direction. This is how chief executive of Pam Golding Property, Andrew Golding describes the recent 100-basis point rate cut. He added that there are signs that a positive turn in the market is nearer rather than further.
Golding recons that under normal circumstances the 3,5% rate cut seen over the coarse of this year would have positively impacted property sales but due to the extra ordinary times we are currently experiencing, the interest rate reductions has had little impact on house sales.
He added that the rate cut has to some degree eased the burden on consumers but that the liquidity crunch that banks are experiencing should be eased to make a real difference in the property market. Golding does not see this happening in the near future.
Golding also believes that the stabilisation of sales volumes and further rate cuts would enable consumers to meet the banks’ strict lending criteria and improve affordability. He added that they should anticipate a wait-and-see attitude as the country has just elected a new president – and with any change there is a sense of hope.
Buy Cape Town property
A step in the right direction. This is how chief executive of Pam Golding Property, Andrew Golding describes the recent 100-basis point rate cut. He added that there are signs that a positive turn in the market is nearer rather than further.
Golding recons that under normal circumstances the 3,5% rate cut seen over the coarse of this year would have positively impacted property sales but due to the extra ordinary times we are currently experiencing, the interest rate reductions has had little impact on house sales.
He added that the rate cut has to some degree eased the burden on consumers but that the liquidity crunch that banks are experiencing should be eased to make a real difference in the property market. Golding does not see this happening in the near future.
Golding also believes that the stabilisation of sales volumes and further rate cuts would enable consumers to meet the banks’ strict lending criteria and improve affordability. He added that they should anticipate a wait-and-see attitude as the country has just elected a new president – and with any change there is a sense of hope.
Buy Cape Town property
Subscribe to:
Posts (Atom)
Posts
