There is one recession-proof property investment in South Africa that experts swear by – student accommodation.
According to Berry Everitt of Chas Everitt International, the demand for rental units near campuses is growing as student numbers increase year-on-year. Everitt stated that universities are struggling to build additional student residences which means that student are relying on the private sector for housing.
To secure your investment, Everitt said that rent for student accommodation per square meter is higher than residential units. To find a student tenant is also easier with many institutions compiling free property listings, which are distributed at the end of each academic year.
Everitt advised that one should look to invest in property close to the campus, as rates are higher in these areas. At the moment Pretoria, Johannesburg and Witwatersrand are showing growth with Potchefstoom also pointing to potential. Everitt advised to keep an eye out for Pietermaritzburg where numbers are expected to grow.
However, Everitt warned, investors need to carefully select property that needs little or no maintenance. Look for robust surfaces that are easy to replace and implement a breakage cost paid by the tenants.
Use December summer holiday to do maintenance in and around the property for most students will not use the accommodation then.
(This article is courtesy of IOL)
Rent property in South Africa
Monday, December 29, 2008
Tuesday, December 23, 2008
Cape Town Voted Best World City
Cape Town has been voted ‘Best World City’ in the 2008 Telegraph Awards. This spectacular destination was voted above major cities like San Francisco and Sydney to walk away with the honours. If that’s not enough South Africa also claimed a place in the top three in the ‘Best Non-European Country’ category.
From the 40 000 people that were used in the poll, 92% said that the credit crunch will have no effect on holiday destination choices. Among the top destination on earth were New Zealand, Australia, South Africa and Canada. Alongside Cape Town were San Francisco, Sydney and Vancouver in the top cities category.
Cape Town’s top tourist attractions include Table Mountain, the V&A Waterfront, Robben Island, the Cape Winelands and Kirstenbosch Botanical Gardens.
Cape Town was also recently voted one of ten cities in the world that are most likely to become a global sustainability centre by 2020.
The same awards saw Singapore Airlines, Virgin, Emirates and Qatar Airways walk away with the people’s favourite airlines.
Buy property in Cape Town
From the 40 000 people that were used in the poll, 92% said that the credit crunch will have no effect on holiday destination choices. Among the top destination on earth were New Zealand, Australia, South Africa and Canada. Alongside Cape Town were San Francisco, Sydney and Vancouver in the top cities category.
Cape Town’s top tourist attractions include Table Mountain, the V&A Waterfront, Robben Island, the Cape Winelands and Kirstenbosch Botanical Gardens.
Cape Town was also recently voted one of ten cities in the world that are most likely to become a global sustainability centre by 2020.
The same awards saw Singapore Airlines, Virgin, Emirates and Qatar Airways walk away with the people’s favourite airlines.
Buy property in Cape Town
Auctioneer Timid About 2009
This article is courtesy of Realestateweb (2009: Auctioneer gazes into his crystal ball – 22 December 2008)
Rael Levitt, CEO of the Alliance Group warns that global events will continue to have a huge impact on the distressed South African economy in 2009.
Levitt says that The Alliance Group, South Africa’s largest asset services and auction group, has experienced a turbulent 2008 with the property market going into free fall from the middle of the year. This started with a sharp increase in car repossessions and then house repossessions. Personal insolvencies followed which left Levitt’s company with large volumes of these distressed markets.
“By the end of the year we saw liquidations following and this December there have been more liquidations of companies than since the turbulent mid-1990s".
Levitt explained that what we are seeing know in South Africa is six months behind the USA, UK and Europe where distress is moving from the retail environment in business. Also following in the global trend is the property market, with a flood of residential stock hitting the market with both forced and non-forced sellers’ values dropping across the board.
Levitt said that by the end of this year, mortgage stress (less than two months in arrears) has grown to over 100 000 and severe mortgage stress (being four months in arrears) has also spiked to over 30 000 home owners. He added that for this to slow down, the Reserve Bank have to slash the interest rates by more than 4% at the start of 2009.
Commercial property, according to him has not been hit that hard even though the banks have tightened up on new finance criterion, which has dampened the demand. Sellers of commercial property prefer a “hold position” rather than discounting their prices. Levitt believes without a doubt that cost inflation will cause an upward pressure on prices and rentals. With rentals increasing as a result of supply constraints, plus lower interest rates, many opportunistic buyers will emerge.
Liquidations have increase sharply with the weakening rand impacting local businesses and both domestic and foreign investor sentiment. This can be seen in the large numbers of liquidations and business closures in November and December. Levitt warns that importers, motor trade, building suppliers and contractors can expect a rough 2009.
However, Levitt still believes that the 2010 Soccer World Cup will improve sentiment in certain sectors. He concluded by saying that those investors who understand the market cycles and who has access to finance, will be the ones who have a once in a decade opportunity to accumulate assets and businesses at fantastic values.
Buy property in South Africa
Rael Levitt, CEO of the Alliance Group warns that global events will continue to have a huge impact on the distressed South African economy in 2009.
Levitt says that The Alliance Group, South Africa’s largest asset services and auction group, has experienced a turbulent 2008 with the property market going into free fall from the middle of the year. This started with a sharp increase in car repossessions and then house repossessions. Personal insolvencies followed which left Levitt’s company with large volumes of these distressed markets.
“By the end of the year we saw liquidations following and this December there have been more liquidations of companies than since the turbulent mid-1990s".
Levitt explained that what we are seeing know in South Africa is six months behind the USA, UK and Europe where distress is moving from the retail environment in business. Also following in the global trend is the property market, with a flood of residential stock hitting the market with both forced and non-forced sellers’ values dropping across the board.
Levitt said that by the end of this year, mortgage stress (less than two months in arrears) has grown to over 100 000 and severe mortgage stress (being four months in arrears) has also spiked to over 30 000 home owners. He added that for this to slow down, the Reserve Bank have to slash the interest rates by more than 4% at the start of 2009.
Commercial property, according to him has not been hit that hard even though the banks have tightened up on new finance criterion, which has dampened the demand. Sellers of commercial property prefer a “hold position” rather than discounting their prices. Levitt believes without a doubt that cost inflation will cause an upward pressure on prices and rentals. With rentals increasing as a result of supply constraints, plus lower interest rates, many opportunistic buyers will emerge.
Liquidations have increase sharply with the weakening rand impacting local businesses and both domestic and foreign investor sentiment. This can be seen in the large numbers of liquidations and business closures in November and December. Levitt warns that importers, motor trade, building suppliers and contractors can expect a rough 2009.
However, Levitt still believes that the 2010 Soccer World Cup will improve sentiment in certain sectors. He concluded by saying that those investors who understand the market cycles and who has access to finance, will be the ones who have a once in a decade opportunity to accumulate assets and businesses at fantastic values.
Buy property in South Africa
Sunday, December 21, 2008
The Year Ahead: What to Expect
The information in this article is courtesy of Realestateweb (Fasten your seatbelts: it’s another rough property ride – 22 December 2009)
After a difficult year, the property market is set for another bumpy ride according to experts. Sure with the interest rate finally dropping a bit we might feel pessimistic but will this really make a difference in the year ahead.
There are some things we can take into consideration including that banks have tightened up on lending criteria to the point where home loan providers are rejecting about one in two buyers. At the moment there is no sign that this is going to change soon.
The amount of buyers has drastically falling due to harsher economic conditions. With less and less people considering buying or selling houses, estate agency will have a hard time keeping their heads above water.
Property prices have fallen and some are saying that it might not be the bottom yet, and while buyers are sitting on the sideline waiting for property prices to reach the bottom, agency are having a hard time surviving. These buyers are also waiting for expected interest rate drops, meaning that they might get a bigger home loan in 6 months’ time.
The unstable political scene will also have its effect on the property market in 2009. The 2009 elections in South Africa might bring some necessary relieve, but will also mean that buyers will sit on the sideline and wait before they enter the market. With our government yet to resolve the problems in Zimbabwe, we might also see more sellers that buyers. This is bad news because the property market has an excess stock as it is – particularly in the R2 million plus range.
If you are, however feeling optimistic about South Africa’s future there is not better time than now to invest. You are likely to pick up excellent bargains with great potential should things start looking up again.
Look for property in South Africa
After a difficult year, the property market is set for another bumpy ride according to experts. Sure with the interest rate finally dropping a bit we might feel pessimistic but will this really make a difference in the year ahead.
There are some things we can take into consideration including that banks have tightened up on lending criteria to the point where home loan providers are rejecting about one in two buyers. At the moment there is no sign that this is going to change soon.
The amount of buyers has drastically falling due to harsher economic conditions. With less and less people considering buying or selling houses, estate agency will have a hard time keeping their heads above water.
Property prices have fallen and some are saying that it might not be the bottom yet, and while buyers are sitting on the sideline waiting for property prices to reach the bottom, agency are having a hard time surviving. These buyers are also waiting for expected interest rate drops, meaning that they might get a bigger home loan in 6 months’ time.
The unstable political scene will also have its effect on the property market in 2009. The 2009 elections in South Africa might bring some necessary relieve, but will also mean that buyers will sit on the sideline and wait before they enter the market. With our government yet to resolve the problems in Zimbabwe, we might also see more sellers that buyers. This is bad news because the property market has an excess stock as it is – particularly in the R2 million plus range.
If you are, however feeling optimistic about South Africa’s future there is not better time than now to invest. You are likely to pick up excellent bargains with great potential should things start looking up again.
Look for property in South Africa
Wednesday, December 17, 2008
Currency Trend Can Bail Out SA Market
PropertyWire, a global property news service, reported that the real estate market in South Africa is experiencing the toughest conditions most people can remember. However, they do predict that the currency fluctuations could help recover the struggling market.
Samual Seeff, chairman of the Seeff property group, is known for selling the country’s most expensive property earlier this year. Seeff says that volumes are down and times are tough. He added that even the top end of the market is quietened down.
Like other agencies, Seeff is not expecting a good summer but is rather focusing on surviving the slump.
Berry Everitt, MD of Chas Everitt International, is more optimistic. He reckons that interest from foreign property investors could be a trend that can help the property market. He added that there is a “mood of optimism sweeping through the global market” in the wake of the US election outcome and is generating renewed interest in South African real estate.
Everitt’s prediction is that European buyers in particular would once again see the properties in South Africa as a good investment, and the weakness of the rand against their currencies will help this on. In addition, he said, the South African market is in good shape and likely to recover faster than other markets.
Everitt says that the foreign interest can already be seen in the “substantially higher” number of inquiries they have received from foreigners.
Everitt concluded by saying that these buyers are not necessarily interested in any property but rather more expensive, lifestyle properties.
Invest in property in South Africa
Samual Seeff, chairman of the Seeff property group, is known for selling the country’s most expensive property earlier this year. Seeff says that volumes are down and times are tough. He added that even the top end of the market is quietened down.
Like other agencies, Seeff is not expecting a good summer but is rather focusing on surviving the slump.
Berry Everitt, MD of Chas Everitt International, is more optimistic. He reckons that interest from foreign property investors could be a trend that can help the property market. He added that there is a “mood of optimism sweeping through the global market” in the wake of the US election outcome and is generating renewed interest in South African real estate.
Everitt’s prediction is that European buyers in particular would once again see the properties in South Africa as a good investment, and the weakness of the rand against their currencies will help this on. In addition, he said, the South African market is in good shape and likely to recover faster than other markets.
Everitt says that the foreign interest can already be seen in the “substantially higher” number of inquiries they have received from foreigners.
Everitt concluded by saying that these buyers are not necessarily interested in any property but rather more expensive, lifestyle properties.
Invest in property in South Africa
Tuesday, December 16, 2008
Pros and Cons of Owning Holiday Homes
(Information in this article is courtesy of Realestateweb (Holiday homes: The pros and cons – 19 November 2007)
While on holiday this year, some might become so bedazzled by the local scenery that they might decide to buy property in a holiday destination. Real estate agents in these areas are already gearing up for, what might be a busy season for them.
If you look at the advantages of owning a holiday home, flat of apartment you’ll see that having an investment like a holiday home, it might earn you some income on the long run or even open the door for rental income.
Absa recently pointed out that a holiday homes, apartment or even vacant land can also serve as a collateral for other debt.
If you are buying with the financial help of a bank you have take in consideration that this might put a lot of strain on your income. If you want to use the property occasionally, you are going to have to rely on short-term tenants like holiday rentals. Expect to do most of the marketing for this yourself, seeing that there is a shortage of short-term rental agents in South Africa.
There is also the possibility of the interest rates rising, in which case you will have to pay more for your holiday haven. Another big expense might be cleaning and maintaining your property in between visitors’ stays.
Other disadvantages include higher maintenance cost because of the proximity to the coast, as well as the fact that sea or mountain views are not preserved and can impact your property’s value. In tough market conditions you might find it hard to sell you property.
There are, however, a lot of advantages to owning a holiday home; if you do your sums carefully and make wise decisions you will reap the rewards. If you are not planning to use the property often and not planning to rent it out, it might be smarter to invest in a different kind of property all together.
But property for sale in South Africa
While on holiday this year, some might become so bedazzled by the local scenery that they might decide to buy property in a holiday destination. Real estate agents in these areas are already gearing up for, what might be a busy season for them.
If you look at the advantages of owning a holiday home, flat of apartment you’ll see that having an investment like a holiday home, it might earn you some income on the long run or even open the door for rental income.
Absa recently pointed out that a holiday homes, apartment or even vacant land can also serve as a collateral for other debt.
If you are buying with the financial help of a bank you have take in consideration that this might put a lot of strain on your income. If you want to use the property occasionally, you are going to have to rely on short-term tenants like holiday rentals. Expect to do most of the marketing for this yourself, seeing that there is a shortage of short-term rental agents in South Africa.
There is also the possibility of the interest rates rising, in which case you will have to pay more for your holiday haven. Another big expense might be cleaning and maintaining your property in between visitors’ stays.
Other disadvantages include higher maintenance cost because of the proximity to the coast, as well as the fact that sea or mountain views are not preserved and can impact your property’s value. In tough market conditions you might find it hard to sell you property.
There are, however, a lot of advantages to owning a holiday home; if you do your sums carefully and make wise decisions you will reap the rewards. If you are not planning to use the property often and not planning to rent it out, it might be smarter to invest in a different kind of property all together.
But property for sale in South Africa
Thursday, December 11, 2008
Rate Cut: What Do the Experts Say
This article is courtesy of Realestateweb (Tito’s Tonic: Too little, Too Late – 12 December 2008)
Yesterday South Africans heard that the repo rate was cut by half a percent. This announcement by Tito Mboweni is said to pave the way for lower interest rates from commercial banks and even further cuts next year. But the question on everyone’s lips is, is this enough. The cut will not make a major difference to individuals’ debt repayments and would not influence the property market anytime soon, according to analysts.
The repo rate – the key monetary policy interest rate – now stands at 11,5%, which will lower the prime mortgages rates offered by banks to 15%. Nedbank has already announced that they would be cutting the rate for their customers.
This is the first time the repo rate has been lowered in two-and-a half years. Since June 2006, interest rates have been climbing steadily and the extra 5% ramped up home loans repayments by more than 30%. The economy has taken a huge blow and many have lost their jobs and possessions because of this.
John Loos, property strategist for FNB’s home loans’ division said that the cut implies a decline in prime rate instalment repayment of about R185 on a R500 000 (20 years) and about R371 on a R1m bond (20years). Even though this is not much it is believed to be the start of a series of cuts that are expected to end about 3,5% lower - to about 12%.
Jacques Du Toit, senior property analyst with Absa Homeloans said: “Against the background of current and expected economic conditions, especially with regard to inflation, interest rates are forecast to be cut further during the course of 2009.
He added that the outlook for the residential property market towards the end of 2009 remains depressed. A noticeable improvement is expected in 2010.
According to Neil Gopal, CEO of the South African Property Owners’ Association we require more cuts to really see the effects. He added that it takes about 2 years for interest rates to take effect. This means the hikes of last year are still being felt now.
"I don't think consumer spending will improve in the short term and we should see some recovery in the retail sector in the second half of next year. We need more government spending on infrastructure projects to ensure jobs in the construction sector are maintained."
Brain Falconer, CEO of Colliers International Residential, is more positive about the cuts and Samual Seeff, chairman of Seeff Properties agrees but says that only a 3-4% cut would have a positive effect on the market. He added that the real estate market would continue to suffer if the banks aren’t willing to lend money more freely.
Dr Andrew Golding, CEO of Pam Golding Properties says that it will take a while for the rate cut to influence the market and hopes for a more substantial cut. Hershel Jawitz agrees and said that there are great buying opportunities out there and can’t be taken advantage of due to the banks’ strict lending criteria.
But property in South Africa
Yesterday South Africans heard that the repo rate was cut by half a percent. This announcement by Tito Mboweni is said to pave the way for lower interest rates from commercial banks and even further cuts next year. But the question on everyone’s lips is, is this enough. The cut will not make a major difference to individuals’ debt repayments and would not influence the property market anytime soon, according to analysts.
The repo rate – the key monetary policy interest rate – now stands at 11,5%, which will lower the prime mortgages rates offered by banks to 15%. Nedbank has already announced that they would be cutting the rate for their customers.
This is the first time the repo rate has been lowered in two-and-a half years. Since June 2006, interest rates have been climbing steadily and the extra 5% ramped up home loans repayments by more than 30%. The economy has taken a huge blow and many have lost their jobs and possessions because of this.
John Loos, property strategist for FNB’s home loans’ division said that the cut implies a decline in prime rate instalment repayment of about R185 on a R500 000 (20 years) and about R371 on a R1m bond (20years). Even though this is not much it is believed to be the start of a series of cuts that are expected to end about 3,5% lower - to about 12%.
Jacques Du Toit, senior property analyst with Absa Homeloans said: “Against the background of current and expected economic conditions, especially with regard to inflation, interest rates are forecast to be cut further during the course of 2009.
He added that the outlook for the residential property market towards the end of 2009 remains depressed. A noticeable improvement is expected in 2010.
According to Neil Gopal, CEO of the South African Property Owners’ Association we require more cuts to really see the effects. He added that it takes about 2 years for interest rates to take effect. This means the hikes of last year are still being felt now.
"I don't think consumer spending will improve in the short term and we should see some recovery in the retail sector in the second half of next year. We need more government spending on infrastructure projects to ensure jobs in the construction sector are maintained."
Brain Falconer, CEO of Colliers International Residential, is more positive about the cuts and Samual Seeff, chairman of Seeff Properties agrees but says that only a 3-4% cut would have a positive effect on the market. He added that the real estate market would continue to suffer if the banks aren’t willing to lend money more freely.
Dr Andrew Golding, CEO of Pam Golding Properties says that it will take a while for the rate cut to influence the market and hopes for a more substantial cut. Hershel Jawitz agrees and said that there are great buying opportunities out there and can’t be taken advantage of due to the banks’ strict lending criteria.
But property in South Africa
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