Weekly Newsletter
Friday, 05 June, 2009
Property Search | Estate Agents | List your property

Edition 22 of 2009, Friday, 05 June 2009

Dear Reader

In his first major speech President Jaco Zuma on Wednesday said that South Africa must act now to minimise the impact of the global financial crisis on the poor but still has to spend wisely. Yes this might be true but easier said than done. Housing, having your own property, currently stays a problem. Where is it all going to end? The million rand question, who is to be believed?

Things are definitely looking up in the residential property market, with a number of factors combining now to give consumers their confidence back.” This according to Chas Everitt’s CEO, Berry Everitt. “The first of these, of course, is the series of rate cuts since December that has brought significant relief to those with home loans to pay off - and helped many people to keep their homes. The second is the fact that the banks are much more approachable than they were in previous economic downturns and are really making great efforts to assist homeowners who are still in financial distress and in default on their home loan installments. They are offering several different options to help these owners avoid having their properties repossessed. The third factor is the re-emergence of serious buyers and investors who perceive that the market is primed for an upturn and that prices are not likely to get much lower than they are now.

Many of these buyers have significant cash resources and are not looking for 100% bonds - and at the same time we are seeing the banks become somewhat more flexible on their deposit requirements anyway, so the bond approval rate is starting to rise.

And this of course means more successful sales, which combined with rising economic confidence as we go into the final phase of preparations for the 2010 Soccer World Cup, bodes very well for the coming summer.

There’s a wintry chill blowing through SA’s residential property data. Generally, prices will keep falling, perhaps until the end of this year. However, despite the hammering property has been given globally and locally, the SA house market has shown itself to be amazingly resilient, with an expected 10% to 15% peak-to-trough fall far milder than that of many other countries. Pam Golding Properties executive director Ronald Ennik sticks to his forecast of a 10% fall in 2009.

Seeff chairman Samuel Seeff reckons that by the end of 2009 the national average price will be as much as 15% down from its 2007 peak. No winter warmth here
   
“With South Africa officially now in recession, conditions in the South African economy are hampering the pace of residential demand growth despite a series of interest rate cuts having already taken place," FNB property strategist John Loos said. Home values still falling
   
South Africa is unlikely to see another residential property boom in the foreseeable future and a full-scale revival in residential property is probably two to three years off, says Bill Rawson, Chairman of Rawson Properties – but, he adds, the turnaround point and the beginning of the upswing have already been reached and several encouraging signs are now already evident. Bill Rawson still sees signs for hope
   
Despite the fact that the economy is now in recession - or perhaps because it is – the residential property market is currently in a rare state of perfect equilibrium. So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that financially capable homebuyers who were simply “not interested” last year are now coming out of hiding as they perceive the market to be at or near the bottom of its cycle and set for an upturn. “With buyers still very cautious and cagey, sellers should definitely not read this interest rate decrease – or the next one – as a signal to raise their asking prices. They should rather take the opportunity to conclude a deal more easily and move on to their next home at an advantageous price.Market now perfectly balanced, says Geffen

It is a year ago that Mr. Geffen’s, in a company memo to his agents, warned that the property market was even worse than the banks have been suggested. Who can still remember the shock waves this memo created in the property industry? Was he right?

South Africans face other economic challenges with the result that the cut in the interest rates is to have a mute effect on the property market. Do you agree? Send your viewpoint to news@cyberprop.com

Enjoy!
The editor


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>> Real Estate news – USA - Calling the bottom of the property market?

After several hard years that have seen property sales volumes dramatically curbed and residential prices falling more-or-less back to 2002 levels, US newspapers are increasingly reporting speculation that the end of the bust period may be nigh. USA Today recently reported that more repeat buyers appear to be snapping up homes, "contributing to a slight uptick in existing home-sales" in the last quarter. "The majority of buyers are now repeat buyers, which includes owner-occupants who are moving up to larger or more expensive homes. Investors make up the rest of the market," it says...

>> No winter warmth here

There’s a wintry chill blowing through SA’s residential property data. Generally, prices will keep falling, perhaps until the end of this year. However, despite the hammering property has been given globally and locally, the SA house market has shown itself to be amazingly resilient, with an expected 10% to 15% peak-to-trough fall far milder than that of many other countries...

>> Home values still falling

The build up of a substantial oversupply of residential housing stock is sustaining the drop in home values experienced of late, FNB said on Monday.

Its latest house price index continued to decline in May to -11.3 percent year-on-year, it said in a statement.

This represented a deterioration on the revised -9.2 percent rate of year-on-year decline recorded for April...

>> Interest rate cuts may not prompt swift recovery

THE downward trend in interest rates, which are at 2006 levels, is expected to have a muted effect on the property market as a result of economic challenges.

The Reserve Bank’s decision to cut interest rates by one percentage point, reducing the Bank’s prime lending rate from 12% to 11%, brings the total interest rate reduction since the first rate cut in December to 4,5 percentage points...

>> Weak property market set to continue

Standard Bank's median house price index decreased by 4.1% y/y in May.

There is no light at the end of the tunnel for house prices and property market weakness is set to continue, Standard Bank said on Tuesday as it released house price data.

Standard Bank's median house price index decreased by 4.1% year-on-year in May, following average declines of 2.7% year-on-year in the first four months of the year...

>> Bill Rawson still sees signs for hope

South Africa is unlikely to see another residential property boom in the foreseeable future and a full-scale revival in residential property is probably two to three years off, says Bill Rawson, Chairman of Rawson Properties – but, he adds, the turnaround point and the beginning of the upswing have already been reached and several encouraging signs are now already evident...

>> Market now perfectly balanced, says Geffen

Despite the fact that the economy is now in recession - or perhaps because it is – the residential property market is currently in a rare state of perfect equilibrium.

So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that financially capable homebuyers who were simply “not interested” last year are now coming out of hiding as they perceive the market to be at or near the bottom of its cycle and set for an upturn...

>> No deposit required!

Banks have recently gone from offering 108 percent bonds to requiring that you have anything from a 10 percent to a 30 percent deposit and that you fund all costs related to acquiring the property from your own pocket.

On a purchase of a R1-million, with a 10 percent deposit, this translates to having approximately R150 000 available. This is with a 10 percent deposit; heaven help you if the bank insists on a larger deposit...

>> Living in Gauteng? If yes, you can support the Chas Everitt Home Makeover 2009

CHAS EVERITT INTERNATIONAL ICE SKATING CHARITY EVENING

Please join Chas Everitt for a day of ice-skating fun at the Northgate Ice Rink
on the 13th of June 2009 at 17h30
For only R90.00 per person, you will receive a meal, drink, entrance
& ice-skate rental!
All proceeds will go to the Chas Everitt Home Makeover for
‘Die Kinderhuis’ Orphanage in Durbanville, Cape Town
Please bring your kids and family and help us make a difference

RSVP – Michelle Bester 011 801 2500 (michelleb@everitt.co.za)
By the 6th June 2009
(no charge for under 2’s)

>> Cape Town's established Southern Suburbs still considered blue chip by most investors, says Vineyard Estates CEO

While he is “absolutely convinced” that despite lower interest rates and other favourable signs, the Cape property market still has half a year to go before it is in a real upturn phase, those who say it is lacking in life simply do not know what is in fact happening “out there”, says Anton du Plessis, CEO of Vineyard Estates, which is headquartered in Claremont, opposite Arderne Gardens, and focuses on a relatively small area: Upper Claremont, Kenilworth, Bishopscourt, Rondebosch, Newlands and Upper Constantia...

>> Entry-level homebuyers flock to Midrand

The entry-level sector of Midrand’s property market is experiencing a spate of activity, with demand outstripping supply.

So says Beulah Thomas, principal of local leading agency Homenet/ Harcourts Midrand, who says much of the activity is stemming from buyers seeking to upgrade from the surrounding townships, particularly Thembisa...

>> Claim-free land draws buyers to Upington

Demand for farmland is underpinning the property market in Upington.

Frikkie Truter and Boetie Bill van Dyk, new owners of the local Aida franchise, say demand for residential units in town, as well as for commercial and industrial property has flattened but that farmers who have sold farms elsewhere due to land claims are increasingly resettling on farms around Upington...

>> Fewer agents: industry set for lasting change

The drop of more than 50% in the number of registered estate agents in South Africa is likely to change the face of the industry dramatically – and permanently.

In reaction to the news that the number of agents has dropped from about 80 000 in 2007 to about 38 000 currently, Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), says it is unlikely that the number will materially increase in future, even when the economic climate improves...

>> Distressed sales: Choose the right agent

Tough economic conditions are pushing consumers with large debt loads to the wall but quick action to deal with mounting debts can save substantial sums of money and even prevent sequestration.

Berry Everitt, CEO of the Chas Everitt International property group, says homeowners who cannot service their home loans are advised to be proactive and to try to manage the process of getting out of debt rather than to stick their heads in the sand and hope that problems will resolve themselves...

>> SASSI Expands in a big way - Info Gauteng

South African Self Storage Investments (SASSI) announced this week that they have broken ground for, and are going ahead with, a fifth new facility (with 450 plus self storage units), this time on the West Rand of Johannesburg alongside the busy N14 highway. The store will be nestled within the Cradle City precinct and only minutes away from Lanseria Airport and will form part of the Stor-Age brand of self storage facilities...

>> News from ERA / Benefits for property in high-speed broadband

The advent of faster, cheaper broadband services to South Africa when it is connected to the world via the Seacom undersea cable will undoubtedly benefit the property market.

So says Gerhard Kotzé, CEO of the ERA South Africa property group, who notes that South Africans are only just beginning to grasp how far-reaching the impact of the coming communications revolution will be...

>> In the area...

The areas we are going to take a closer look at this week are;

  • Blouberg
  • Shelley Point
  • Claremont

>> In the area 1 – Blouberg

The economic downturn has seen a shift in property trends

Blouberg, an area in the Cape renowned for its great views of Table Mountain and still relatively affordable property, seems to be chartering a course towards the top rung of the property ladder.

Taking a closer look at the property market, Fanie Lategan, principal of Chas Everitt Western Seaboard, says that while sales are down on last year, the market is still buoyant compared to other areas of Cape Town. “The challenge,” he says, “lies with the banks’ strict credit policies meaning only about one third of home loan applications are approved...

>> In the area 2 – Shelley Point

Shelley Point’s property responds to buy-in by Mauritian group

The move by Mauritian based Dale Capital Partners to purchase – and manage – the country club, hotel and spa at Shelley Point, has given a huge boost to property throughout the 149ha estate, says Gert Joubert, Shelley Point’s developer...

>> In the area 3 – Claremont

THE CLAREMONT” A RUNAWAY SUCCESS WITH LANDLORDS AND RESIDENTS

Lanice Steward, MD of the Anne Porter Knight Frank real estate marketing group, says that in all her experience she has seldom, if ever, come across apartments capable of giving such satisfactory returns as those of “The Claremont” on Main Road in the suburb of that name. What is more, these highly satisfactory returns are, she says, being achieved on resale prices – not just on the original launch prices. (The project came on stream in December 2006.)

>> Focus on Vanderbijlpark, Gauteng, South Africa

Dr HJ van der Bijl, a brilliant young scientist working in the United States, was called back to South Africa in 1920 by Prime Minister Jan Smuts to advise the government on planning South Africa'a industrial development. Van der Bijl oversaw the inauguration of the Iron and Steel Corporations's (ISCOR) first plant at Pretoria in 1934 and, with increased demand, 10 000ha was bought to build a large steelworks and model city for its employees - Vanderbijlpark...

>> View Properties in Vanderbijlpark
>> View Properties in Gauteng

>> Property of the week

Gauteng, Vanderbijlpark, Mantevrede

Once in a Lifetime Opportunity

Bedrooms: 5
Bathrooms: 5
Garages: 3

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>> Sectional Title News for Everyone by Paddock

Last evening I attended my scheme's AGM. Twelve people huddled in a room for an action-packed 95 minutes going through a year's worth of issues, breaking some new ground and planning for what we expect to be a better future - including a managing agent and a planned maintenance programme. Perhaps the most remarkable thing was that, taking proxies into account, we had 100% attendance and managed to take two truly unanimous resolutions. We obviously needed more air!

You can download the May 2009 issue of Paddocks Press by clicking this link.

In this issue:

  1. Dina Porteous underlines the importance of training in her business;
  2. Jennifer outlines 10 steps to dealing with sectional title conflicts;
  3. I unpack the various parts of the Scheme Management course (and we include a list of past students - use the 'find' feature to locate your name);
  4. Rob deals with Condensation in his Building Maintenance series;
  5. I have a new feature - "Mutterings";
  6. Jennifer answers a series of sectional title questions;
  7. We welcome new members to our Paddocks and Getsmarter team; and
  8. We include various in-text and classified adverts

>> Software at its best!

The Property Manager provides you with a very extensive and detailed list of criteria which you can capture for your property listings and gives you the control to decide how you would want these properties to be displayed on the Internet

  • Manage property for sale and previously sold
  • Activate or deactivate Internet listings with immediate effect - no waiting!
  • Keep track of your On Show and On Special properties and list them on your website
  • Print and email multiple reports
  • Unlimited number of pictures
  • Keep a history database

If you would like to know more about the above features and benefits that CyberAgent offer, visit: www.cyberagent.co.za or email: sales@cyberprop.com

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