The information in this article is courtesy of Fin24 (Agents to Auction Off Houses – 22 June 2009)
The slow property market has urged South African estate agents to turn to auctions as a means of selling property. The popularity of auctions has increased over the past year, mainly due to the fact that it provides a quick and efficient way to get rid of property.
Experts are now implying that the combination of estate agents’ skills and the conventional success of auctions could deliver satisfying results. Re/Max Southern Africa and Yellow Hammer has already announced a strategic partnership to supply auctioneering services to the property market.
Lew Greffen Sotherby’s International Realty has also taken initiative by launching its own venture – Saville Row Auctions. This company will focus mainly on industrial and commercial property, with some residential and recreational property also going under the hammer.
Andrew Smith, director of Yellow Hammer, thinks that all agents will turn to auctions at some point. He added that concept differs from traditional methods of auctioning in that it combines estate agents' out-of-hand methods of selling with auctioning. This way estate agents can use their expertise, skills and contacts to increase the exposure of a property while the auction is used to efficiently concluded the transaction.
Smith added that auctions is both beneficial for the seller and the agents as it is the most active market and estate agents can earn an income in less time and from a broader spectrum.
According to Smith there is no competition between the estate agents and Yellow Hammer as they work independently from the agents.
Monday, June 22, 2009
Monday, June 15, 2009
Price Decline Makes Property Affordable
The information in this article is courtesy of Business Day (Real Price Decline Makes Property Buying more Affordable - 15 June 2009)
Mike Bester, Realty 1 International Property Group CEO, said in an article on the Business Day website that South Africans can realistically hope that the worst of the recession will be behind us by the end of 2009. This comes after consumer confidence in the US improved measurably in the past weeks.
He explained that expectations are growing that the US will reach the end of its depression in the third quarter of 2009. Reports by Absa showed that this country had experience its biggest monthly gain in its expectations index since April 2003.
Back in South Africa however, locals can scoop up some serious bargain, according to Bester. This after house prices showed a first quarter, year-on-year decline for the first time since late 1986.
With the market set to get worse before it get better, it seems that now is the best time to buy. However, Bester warned prospective buyers should be sure what they can afford in terms of monthly repayments, and should not bargain on the interest rate dropping any further.
Bester believes that our nation has lost the discipline of saving, which is a real problem since banks are reluctant to grant loans without a significant deposit. He went on to explain that those currently in the market will make their profits out of buying not selling. This means that buyers should spend a bit more time upfront on getting to know the market and what is for sale in the area in which they want to buy. He especially called on potential buyers to pay careful attention to the properties that have spent a long time on the market because the longer a home has been on the market, the more likely you are to get it for a fair, if not bargain, price.
He also advised buyers to learn the difference between cheap and good value. This means that if you can’t find a bargain, you should be happy with a fair price knowing that you can achieve good capital growth in the long-term.
Another tip from Bester is to act quickly when you found the right property. This means being pre-qualified, flexible and ready to move when you signed the deal – all things that can serve as motivation for a better deal.
Mike Bester, Realty 1 International Property Group CEO, said in an article on the Business Day website that South Africans can realistically hope that the worst of the recession will be behind us by the end of 2009. This comes after consumer confidence in the US improved measurably in the past weeks.
He explained that expectations are growing that the US will reach the end of its depression in the third quarter of 2009. Reports by Absa showed that this country had experience its biggest monthly gain in its expectations index since April 2003.
Back in South Africa however, locals can scoop up some serious bargain, according to Bester. This after house prices showed a first quarter, year-on-year decline for the first time since late 1986.
With the market set to get worse before it get better, it seems that now is the best time to buy. However, Bester warned prospective buyers should be sure what they can afford in terms of monthly repayments, and should not bargain on the interest rate dropping any further.
Bester believes that our nation has lost the discipline of saving, which is a real problem since banks are reluctant to grant loans without a significant deposit. He went on to explain that those currently in the market will make their profits out of buying not selling. This means that buyers should spend a bit more time upfront on getting to know the market and what is for sale in the area in which they want to buy. He especially called on potential buyers to pay careful attention to the properties that have spent a long time on the market because the longer a home has been on the market, the more likely you are to get it for a fair, if not bargain, price.
He also advised buyers to learn the difference between cheap and good value. This means that if you can’t find a bargain, you should be happy with a fair price knowing that you can achieve good capital growth in the long-term.
Another tip from Bester is to act quickly when you found the right property. This means being pre-qualified, flexible and ready to move when you signed the deal – all things that can serve as motivation for a better deal.
Friday, June 12, 2009
100% Home Loans Are Back
The information in this article is courtesy of Fin24 (100% home loans on offer again – 11 June 2009)
The launch of Shaft Citi – a new development for affordable housing in Germiston on the East Rand – showed that banks have quietly adjusted their approaches to risk with some of them granting 100% home loans for the more affordable side of the house market.
The surprising twist came when 26 out of the 67 sectional title units sold, were taken up with 100% bonds.
Ben van Niekerk, director of Nu Citi Developments, explained that they negotiated with four major banks and Absa and Nedbank indicated that they would approve 100% loans for the development. FNB still has to make a final decision and Standard Bank is considering only their own clients for 100% bonds. Nedbank, however will only approve 100% bonds for properties up to R250 000 with buyers being assisted through the entire purchasing process by a mentor.
According to Andre Dippenaar, who is marketing the development for Pam Golding Estates, banks are slowly but surely relaxing their strict lending criteria.
The development is aimed at households earning R7500 to R25 000 a month.
A 100% bond of R150 000 over 20 years will result in a monthly payment of R1548 at current prime rate of 11%.
The launch of Shaft Citi – a new development for affordable housing in Germiston on the East Rand – showed that banks have quietly adjusted their approaches to risk with some of them granting 100% home loans for the more affordable side of the house market.
The surprising twist came when 26 out of the 67 sectional title units sold, were taken up with 100% bonds.
Ben van Niekerk, director of Nu Citi Developments, explained that they negotiated with four major banks and Absa and Nedbank indicated that they would approve 100% loans for the development. FNB still has to make a final decision and Standard Bank is considering only their own clients for 100% bonds. Nedbank, however will only approve 100% bonds for properties up to R250 000 with buyers being assisted through the entire purchasing process by a mentor.
According to Andre Dippenaar, who is marketing the development for Pam Golding Estates, banks are slowly but surely relaxing their strict lending criteria.
The development is aimed at households earning R7500 to R25 000 a month.
A 100% bond of R150 000 over 20 years will result in a monthly payment of R1548 at current prime rate of 11%.
Tuesday, June 9, 2009
Pressure on House Prices to Continue
The information in this article is courtesy of The Times (Absa mid house prices slide 3.6% y/y – 8 June 2009)
Absa announced yesterday that the average nominal price of middle-segment housing was down by 3.6% year-on-year to R932,000 in May 2009. April 2009 showed a decline of a revised 3.2% y/y.
This is the biggest decline since September 1986 when it was also –3.6% y/y.
Compared to April, nominal houses prices were 0.5% lower in May on a month-to-month basis. This contributed to nominal houses prices in the middle-segment being R35,300 lower in May 2009, after peaking at R967,300 in May last year.
Middle-segment house prices were down by a real 10.7% y/y in April, after declining by a revised 10.2% y/y in March. This was the biggest real year-on-year decline since September 1992.
These calculations are based on the consumer price index (CPI) for all urban areas, available from January 2008 as published by Statistics South Africa. These figures are also used by the monetary committee for policy purposes.
Absa also announced that small house prices dropped by 4.0% y/y in May, after 3.2% y/y was recorded in April of this year. This brings the average price for small houses to R658,200.
The average nominal price of large houses declined by 3.5% y/y to around R1,344 million in May this year, after declining by a revised 3.6% y/y in April. This means that the average price of a large houses now stands at R53, 200 below the peak of R1,398 million reached in May last year.
Other sectors like the construction sector are performing relatively well however developments are believed to record negative real growth for the full year.
According to Absa the residential property market is expected to remain under pressure until late 2009.
Absa announced yesterday that the average nominal price of middle-segment housing was down by 3.6% year-on-year to R932,000 in May 2009. April 2009 showed a decline of a revised 3.2% y/y.
This is the biggest decline since September 1986 when it was also –3.6% y/y.
Compared to April, nominal houses prices were 0.5% lower in May on a month-to-month basis. This contributed to nominal houses prices in the middle-segment being R35,300 lower in May 2009, after peaking at R967,300 in May last year.
Middle-segment house prices were down by a real 10.7% y/y in April, after declining by a revised 10.2% y/y in March. This was the biggest real year-on-year decline since September 1992.
These calculations are based on the consumer price index (CPI) for all urban areas, available from January 2008 as published by Statistics South Africa. These figures are also used by the monetary committee for policy purposes.
Absa also announced that small house prices dropped by 4.0% y/y in May, after 3.2% y/y was recorded in April of this year. This brings the average price for small houses to R658,200.
The average nominal price of large houses declined by 3.5% y/y to around R1,344 million in May this year, after declining by a revised 3.6% y/y in April. This means that the average price of a large houses now stands at R53, 200 below the peak of R1,398 million reached in May last year.
Other sectors like the construction sector are performing relatively well however developments are believed to record negative real growth for the full year.
According to Absa the residential property market is expected to remain under pressure until late 2009.
Monday, June 8, 2009
Large Cut in Agent Numbers
The information in this article is courtesy of Business Report (Slump in property market cuts estate agent numbers – 8 June 2009)
The slow property market and low sales levels have resulted in the number of registered real estate agents in South Africa to drop with more than 50% - from 84 000 agents in 2007 to 38 000 this year.
Willie Marais, the national president of the Institute of Estate Agents of South Africa, explained that this was the number according to the Estate Agency Affairs Board computer, suggesting that the number of active agents is far less.
Marais added that the number of agents is not likely to increase even if the economy shows some improvement. This is mainly due to the fact that credit extensions legislation would limit the number of property transactions and the profitability of agencies. Also, new legislation governing the training and qualifications of estate agents is likely to convince older agents to retire. This will also reduce the number of new entrants to the industry. Marais also believes that the cost of registration might increase because of the reduction in the number of registered agents.
According to Marais, IEASA has not kept record of the number of liquidations since the property slump, however he thinks that the number of agencies closing down is bigger than we think.
The slow property market and low sales levels have resulted in the number of registered real estate agents in South Africa to drop with more than 50% - from 84 000 agents in 2007 to 38 000 this year.
Willie Marais, the national president of the Institute of Estate Agents of South Africa, explained that this was the number according to the Estate Agency Affairs Board computer, suggesting that the number of active agents is far less.
Marais added that the number of agents is not likely to increase even if the economy shows some improvement. This is mainly due to the fact that credit extensions legislation would limit the number of property transactions and the profitability of agencies. Also, new legislation governing the training and qualifications of estate agents is likely to convince older agents to retire. This will also reduce the number of new entrants to the industry. Marais also believes that the cost of registration might increase because of the reduction in the number of registered agents.
According to Marais, IEASA has not kept record of the number of liquidations since the property slump, however he thinks that the number of agencies closing down is bigger than we think.
Tuesday, June 2, 2009
Recession Hampers Result of Rate Cuts
The information in this article is courtesy of Business Day (Recession negates effect of rate cuts on home property market – 2 June 2009)
According to John Loos, FNB property strategist, selling due to financial pressure was a key driver of supply.
Loos said that despite interest rate cuts, the economy are still hampering the pace of residential demand, helped on by the announcement that South Africa has slipped into an official recession.
Last week’s decision to cut the interest rate by another percentage point, bought the interest rate reduction since December to 4,5 percentage points. Loos recons that this can only bring some relief to a credit-sensitive market as the residential property market.
Loos warned that consumers could only expect a mild improvement in residential demand in 2009 and that house prices are set to decline till the end of the year. However, this price deflation will peak around mid-year and consumers can expect the rate cuts to start taking effect during the second half of the 2009.
The good news, according to Loos, is that debt repayments are declining – taking the pressure of cash-strapped consumers.
Commercial banks have also reduced their lending rates to the public to 11%.
According to John Loos, FNB property strategist, selling due to financial pressure was a key driver of supply.
Loos said that despite interest rate cuts, the economy are still hampering the pace of residential demand, helped on by the announcement that South Africa has slipped into an official recession.
Last week’s decision to cut the interest rate by another percentage point, bought the interest rate reduction since December to 4,5 percentage points. Loos recons that this can only bring some relief to a credit-sensitive market as the residential property market.
Loos warned that consumers could only expect a mild improvement in residential demand in 2009 and that house prices are set to decline till the end of the year. However, this price deflation will peak around mid-year and consumers can expect the rate cuts to start taking effect during the second half of the 2009.
The good news, according to Loos, is that debt repayments are declining – taking the pressure of cash-strapped consumers.
Commercial banks have also reduced their lending rates to the public to 11%.
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