Weekly Newsletter
Friday, 01 August, 2008
Property Search | Estate Agents | List your property

Edition 29 of 2008, Friday, 01 August 2008

Dear Reader

This week we saw an increase in the South Africa's consumer price index excluding mortgage rate changes (CPIX) for metro and other areas but what is most importantly used by the South African Reserve Bank for its inflation target. The CPIX was up 1.1 percent month-on-month after it increased 1.1 percent month-on-month in May and for the fifteenth month running it has been above the six percent upper target limit. How Economists react to the CPIX data, by iAfrica;

Colen Garrow, Brait: "It's a little bit higher than expected. I think the inflation numbers are not going to carry the same meaning as they did in the past until we get the new weightings and they are fully operational. I'd be very surprised if it prompts another rate hike. The prudent stance would be to put things on hold until we can assess where the new weightings will take inflation."

Jeff Gable, Absa Capital: "Higher than expectations, and will spark a rally in the bond market and pretty much erase better inflation prospects for 2009."

Doret Els, Efficient Group: "It's slightly above our expectations. It shows that inflation pressures are still a real phenomenon in the economy. The number doesn't bode well for interest rates, but we believe CPIX will peak in the third quarter of 2009 and subside thereafter. So an interest rate hike in August will have little or no impact on it."

Carmen Altenkirch, Nedbank: "The figure is certainly higher than expected, but it should really not come as much of a surprise, with inflation expected to get worse over the next three months. "The good news is that inflation is probably reaching its peak, with both international oil and food prices falling over the past week or two. However, these prices have been volatile over the past few months and there's always a chance that they might rebound."

Annabel Bishop, Investec: "We expect no more interest rate hikes this year as the SARB estimates that the monetary policy transmission mechanism impacts inflation with a lag of twelve to 24 months (arguably shorter by some), and we believe under the re-weighting that CPIX inflation will regain target in H2.09. "The sharp drop in the level of inflation in 2009 is also likely to cause the SARB to cut interest rates significantly in H1.09 next year as the newly weighted (and substantially lower) CPIX inflation series becomes a fact.

In the last newsletter we focused on building and building plans. A warning to our readers this week; A neighbour that takes exception to your planned alterations can cause lengthy delays and even forced cancellation of plans - at great cost! It pays to do your homework before embarking on an building project and ensure you have all the right approval and permission in place before hand

In the mean time it is business is as usual at the top end!

We are noticing a number of interesting and positive trends in the residential property market within different segments around the country, for example ongoing investment in homes here among South African expatriates living in various countries overseas and a strong rally among cash buyers, particularly in the R5m and upwards price range; Strong rally in R5m-plus cash buyers Strong rally in R5m-plus cash buyers

A gracious double-storey home in the Johannesburg suburb of Parktown North has been sold for R8,5m – a record price for the area; Record sale price for Parktown North

“There are amazingly good opportunities available for cash buyers, mainly at the top end ,” says O’Shea. Luxury, views at the top end

Celebrating fifteen years in the décor and design industry, Decorex Joburg 2008 marks this magical milestone with the most exceptional show features ever with an invigorating theme to match ‘Imagine.. Innovate.. Realise..’; Decorex 2008!

The editor


>> Property news - Australian property trends very similar to those of SA

Mike Greeff, CEO of Greeff Properties, recently returned from Western Australia (where he signed an association agreement with Perth estate agency, Glen O’Brien Real Estate) with the message that the current lull period in the residential property market is being experienced more severely in Australia than it is in South Africa’s Western Cape...

>> South Africa: Market Trends Not That Reliable

MARKET sentiment is not as reliable a short-term barometer on the market as many commentators on investment suggest.

The favourite test of its accuracy is, we're told, the future correlation of share prices and earnings growth. If the market trend changes, this, we're told, means much the same trend is about to happen to companies' investment fundamentals...

>> Whites return to South Africa

When South African native Nicky Prins lived in London, there was one television advertisement that always touched her heart.

As part of an effort to encourage tourism, the South African Government ran a commercial showing the country's dramatic landscape, coupled with emotive music and excerpts from President Thabo Mbeki's famous "I am an African" speech...

>> Light on the horizon

APKF MD says residential market has “turned”

Lanice Steward, MD of Anne Porter Knight Frank, has joined one or two other high profile spokesmen for the residential property sector in saying that, as she sees it, the market appears to have bottomed out and is already showing signs of an improvement.

“While this is not the general perception,” said Steward, “the signs in my view are very definitely there.”

>> Don’t go lightly into relocation

Relocation to another city or town always needs careful consideration – and more so in a slower property market.

So says Berry Everitt, MD of the Chas Everitt International property group, who notes that there are, of course, always reasons for some people to relocate, the most common being a new job or a corporate transfer, or a planned change of lifestyle such as retirement...

>> Strong rally in R5m-plus cash buyers

Dr Andrew Golding, chief executive of the Pam Golding Property group, gives his views on the state of the real estate market - and his own business:

Whatever the outcome of the current inflation figures debate, we sincerely hope that the forthcoming meeting of the Monetary Policy Committee does not see the necessity to implement a further increase in the repo rate, as this will undoubtedly have a further negative effect on growth, amid already high fuel, food and electricity costs, coupled with the fact that the manufacturing and retail sectors are experiencing a significant slow-down...

>> Record sale price for Parktown North

A gracious double-storey home in the Johannesburg suburb of Parktown North has been sold for R8,5m – a record price for the area.

The sale was negotiated by David and Theodora Brickhill, area specialists for Lew Geffen Sothebys International Realty, who say the price achieved has raised the bar for the suburb, where the previous record price was R8,2m – and that in a boom year...

>> Luxury, views at the top end

BUILT for a large family originally from the UK, our feature home is set within Pezula Private Estate in Knysna on the Garden Route. This southern Cape estate has been recognised internationally as one of the most successful luxury developments in the world. The estate consists of Phases 1, 2 and 3 where all plots offer the buyer a choice of panoramic views of the sea, forest or Outeniqua Mountains...

>> Legal action by bodies corporate against developers of schemes

In new sectional title developments, the first purchasers of apartments in the building usually buy their properties “offplan” from the developer, as the actual buildings are not yet in existence at the time the apartments are sold.

Developers have perfected the art of marketing a new scheme using models, glossy advertising brochures and detailed plans to convince prospective purchasers that the actual buildings will be as impressive as those described. There is no problem with these marketing and sales techniques, provided that the property that it being sold is adequately defined in the contract of sale and what is ultimately built is what has been marketed...

>> Summit to speed up change in the property sector

Writing in the June issue of De Rebus, the monthly journal of the SA legal profession, Johann Appies, national chairman of the Black Conveyancers’ Association and senior partner of the attorneys, Appies Incorporated, says that the Black Conveyancers’ Association is calling for a summit meeting to facilitate far more rapid transformation in the property industry.

The summit will take place on 11th September 2008 at the Birchwood Hotel in Benoni and the BCA expects anything up to 500 people to attend. These, says Appies, will be drawn from all the disciplines serving the property sector and the related financial services sector, including government, parastatals and other interested parties...

>> Demystifying sectional title

What is sectional title? How does it work?

There’s now finally a book that answers frequently asked questions and gives advice about every aspect of this community lifestyle and its accessibly with an uniquely energetic and spirited approach.

“It’s about time that there is a book that speaks to the layperson about their rights and obligations in these complexes,” say authors of Demistifying Sectional Title, Marina Constas and Karen Bleijs.

When building turns ugly – avoiding the pitfalls of illegal alterations and neighbour disputes

Relentless interest rate hikes and stratospheric building costs have put the idea of building a dream home out of the reach of most people.

Instead, buying an existing property and renovating it to your liking seems to offer a more cost-effective solution and a better return on investment than building from scratch...

>> News from - RealNet Property Group - Auctions ineffective and costly, say agents

Homeowners under pressure to sell their property may choose to auction it in the belief that this is a quicker process that will reach a wider buying audience.

But in the current market conditions, says Tjaart van der Walt, CEO of the RealNet property group, this does not necessarily hold true. “Our experience shows that auctions to sell residential property are not drawing large numbers of interested buyers – and on average only one out of five properties currently offered on auction actually finds a buyer...

>> Decorex 2008!

Decorex Joburg is Fifteen and Fabulous

Celebrating fifteen years in the décor and design industry, Decorex Joburg 2008 marks this magical milestone with the most exceptional show features ever with an invigorating theme to match: ‘Imagine. Innovate. Realise’.

Visit Decorex Joburg for the ultimate roundup of what’s new and now: furniture, kitchens and bathrooms, fabrics, décor accessories, lighting, fine finishes, adorable essentials for indoor- & outdoor living in association with Plascon as main sponsor and SABC3 as media partner...

>> Latest changes to the Mortgage Lending Policies of the 4 major banks

These are the latest changes to the Mortgage Lending Policies of the 4 major banks.

The loan-to-value (LTV) ratio is a mathematical calculation which expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property.

For instance, if a borrower wants R1,300,000 to purchase a house worth R1,500,000, the LTV ratio is R1,300,000/R1,500,000 or 87%...

>> The Green Building Council of South Africa

The Green Building Council of South Africa (GBCSA) today released the first tool in the Green Star SA green building rating system toolset: Green Star SA – Office PILOT.

According to Bruce Kerswill, Executive Chairman of the GBCSA, the tool assesses the environmental performance of buildings on a range of issues including energy, water, materials and emissions, and provides an objective assessment of how “green” a building is...

>> Focus on Centurion, Gauteng, South Africa

Centurion is a town in Gauteng Province, South Africa, located between Pretoria and Midrand (Johannesburg), and part of the City of Tshwane Metropolitan Municipality. It is located at the intersection of the N1 and N14 highways. The R21 also passes through Centurion.

The Waterkloof Air Force Base, as well as the Swartkops Air Force Base (which includes the South African Air Force Museum) is located in the town...

>> View Properties in Centurion
>> View Properties in Gauteng

>> Property of the week

Gauteng, Centurion, Midlands Estate

This house have ultra modern finishes For that special modern person who appreciate the modern things in life. This is now an urgent sale Price has been reduced far below current market value.

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>> BetterBond's tips to home buyers and sellers

Buying a ‘Fixer-Upper’

You’ve seen the property listings: “in need of TLC”, “fixer-upper”, and “great potential”. The perfect “fixer-upper” is the home that everybody wants when fixed up, but few can see past its imperfections to buy. The peeling paint, worn and grubby carpets and scuffed doors are all easily correctable features that often turn off many home buyers.

Thanks to the recent changes in the property industry, there’s a surplus of homes for sale and while some are in ‘move-in’ condition, others need work. For those willing to take on the added time and effort of renovation, the rewards can be great.

So, why consider a fixer-upper?

The most obvious reason is the reduced cost. Homes that require work are generally harder to sell and there is often more room for price negotiation. Location is extremely important – this may give you the opportunity to get into a desirable suburb that would normally be out of your price range. You get to be your own designer. You can choose your own paint colours, new carpets or tiles, lighting fixtures etc. Renovating the kitchen and bathrooms can add enormous value to the property. You have control over how the house will look after the renovations are complete.

There is also some risk in buying a fixer-upper. Take a close look at the repairs it will need. If there are major structural repairs needed, it will be expensive to renovate. Check that the doors and windows fit properly; check for cracks in the foundation, leaning walls and floors that aren’t level. Ultimately, it’s important to weigh the advantages and disadvantages before deciding whether to take on a fixer-upper.

Make sure you have the time and money to renovate. And if you don’t, can you live in the house in that state, while you undertake the renovations when you have the time and money? If you are up to the challenge, buying a fixer-upper can give you the opportunity to create the home of your dreams.

Article by: Cheryl Marais – Direct Marketing Manager - Betterbond

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