Weekly Newsletter
Friday, 08 August, 2008
Property Search | Estate Agents | List your property

Edition 30 of 2008, Friday, 08 August 2008

Dear Reader

14 August is coming and one cannot help to start wondering about what is going to happen with the interest rates. The general feeling amongst analysts is that there is not going to be an increase. But not all of them are optimistic;

"I know this is against the grain as everyone has jumped on the re- weighting story," This from Peter Attard Montalto, Analyst from Lehman Brothers who expects a hike of 50-basis-points.

The biggest news this week regarding the property industry; Home loan shocker: FNB pulls plug on property credit. The Ombudsman for Banking Services fired a warning shot at FNB for withdrawing home loans approvals on a large scale as a result of rising inflation and falling property prices continues. Absa has revealed that it is the self-employed professionals that are being hit the hardest by the recession in the property market.

Furthermore Absa also reported that the nominal price growth if all three categories of housing in the middle segment of the market has slowed down further. Absa reports lowest house price growth in almost nine years

To auction or not to auction? Auctioneers have been reporting an increase in the number of distressed sales as consumers feel the effects of the economic downturn. ‘Distressed’ sales have pitfalls as well as opportunities 

 After months of desperation at the lack of buyers in the market, estate agents are perking up as sales activity takes a turn for the better. Lew Geffen, chairman of Sotheby’s International Realty in SA, says that with prices continuing to fall in real terms, show house attendances are suddenly starting to pick up again and buyer numbers are also starting to increase once more. Buyer numbers pick up as prices drop

 Bakoven has the potential to eclipse Clifton as SA’s most sought-after beachfront suburb. Nestled sedately on the periphery of Camps Bay, the area already boasts property prices on a par with Clifton – and has a few features that may soon put it ahead in the best-address stakes, Is Bakoven the new Clifton?

Read more in Focus on about Bakoven, Western Cape, South Africa

Enjoy!
The editor


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>> Property news - Is the turning point in residential housing closer than most realise?

Bill Rawson, the Chairman of Rawson Properties, said this week that the much discussed low point in house sales and house prices could now be far closer than most people realise.

 Analysing the Residential Property Price Ranger latest figures for the Cape Peninsula, Rawson said that these show that, despite much negative comment from the public and media, prices have held up remarkably well.

>>Absa reports lowest house price growth in almost nine years

by Rodney Hayter

JOHANNESBURG (August 07) - Nominal price growth in all three categories of housing in the middle segment of the market, as defined by Absa, slowed down further in July this year, whereas prices dropped in real terms (i.e. after adjustment for inflation).

This, the bank says in its comment on the data, was the result of deteriorating market conditions on the back of rising inflation and interest rates, adversely affecting household finances and the affordability of housing.

>>Home loan shocker: FNB pulls plug on property credit

Property deals set to crumble as big bank withdraws approved home loan offers "on a large scale".

 Property deals are set to crumble, leaving developers, estate agents and conveyancers scramble to cover costs, as one of the biggest banks withdraws approved mortgage offers "on a large scale".

It's not just service providers who will be knocked financially: buyers and sellers with deals from other banks could find themselves high-and-dry where FNB pulls the plug on a key buyer in the chain.

>>South African property discounts

A growing number of South African property owners are radically cutting their asking prices in order to sell their homes, presenting prospective purchasers with a potential bargain, according to property auctioneers The Alliance Group.

Rael Levitt, chief executive of The Alliance Group, commented: “Homeowners are now setting asking prices at about 10% below their peak. The supply of property for sale in South Africa has outstripped demand in the past three months, which is the first time this has happened in the past six years.

>>Retail market still going strong, say experts

Denise Mhlanga
03 August 2008

Shopping malls still packed; interest rates still rising. Can massive new expansion projects by retailers prove profitable?

The country waits in anticipation of when SA Reserve Bank Governor Tito Mboweni will finally change the nation's interest rates' course. But the consumer concern has not slowed down expansion and developments of retail businesses across the country.

The point worthy pondering is why retailers and bankers alike are investing heavily in this property market.

Three retail property players recently aired their views on where the retail market is going, in the Madison Property Fund Managers' Property Innovation (July).

>>‘Distressed’ sales have pitfalls as well as opportunities 


THE increase in distressed home sales can give buyers the opportunity to acquire bargains, but they must read the fine print before going to auctions as there can be pitfalls.

Auctioneers have been reporting an increase in the number of distressed sales as consumers feel the effects of the economic downturn.

Brian Kew, a director at Werksmans Attorneys, says sellers who are in distress obviously benefit from selling by auction, because the “auction situation” provides the seller with a “captive audience” of 20 to 30 people in some instances.

>> 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...

>>Buyer numbers pick up as prices drop

After months of desperation at the lack of buyers in the market, estate agents are perking up as sales activity takes a turn for the better.

Lew Geffen, chairman of Sotheby’s International Realty in SA, says that with prices continuing to fall in real terms, show house attendances are suddenly starting to pick up again and buyer numbers are also starting to increase once more.

>>“Credit Securing” for home loans rule out face-to-face assessment  

RAWSON FINANCE MANAGER

 Traditionally in South Africa loans to buy homes are issued on the security of the home itself.  In the days when the building societies controlled this market, says Gavin Zinn, National Manager of Rawson Finance, in many cases the home was considered sufficient security provided that the borrower appeared to be firmly ensconced in his or her job and had a good credit record.

 Then, says Zinn the banks were given permission through the new Financial Institutions Act to become involved in this field and rapidly became the dominant lending force, absorbing the building societies into their structures.

>> Residential building costs dip, says FNB

The cost of building a new home dropped slightly in the second quarter of the year, after a modest rise in the first quarter, the FNB’s Commercial Property Finance Residential Building Cost Index showed.

The index reflects the cost per square metre, as charged by building contractors when winning tenders in the formal residential property sector. It excludes affordable and so-called RDP housing.

On average, contractors charged 5,877 rand per square metre in the second quarter.

Year-on-year, building cost inflation measured 6.3% for the second quarter, down from a revised 8.2% in the previous quarter. The inflation rate in the first quarter is a far cry from the 38.8% recorded at the last peak in the third quarter of 2006, reflective of very weak residential demand and low contractor pricing
power.

>> Rental agents: "hot and bothered" by new regulations

New legal requirements for rental agents send waves of surprise, confusion among their ranks.

News of the new education dispensation has been received with shock and uncertainty of how it will translate into practise for estate agents.

Rental agents who spoke to Realestateweb following the announcement of the new education dispensation said they are aware of the new regulations but could not

talk about its expected impact on the industry as it is "too early to say.

South African estate agents under the new education dispensation will have to comply with the regulations as published in the government gazette last month.

>> News from - iAfrica.com

True cost of ownership
Article By:
Wed, 06 Aug 2008 07:00


The gap between asking prices and selling prices is continuing to widen. However, while this creates more value-for-money opportunities in the residential property market, it does not necessarily mean you can afford to buy your dream home simply because the cost of home ownership might be a lot more than you think. So, just where does the money go?

>> Is Bakoven the new Clifton?

Bakoven has the potential to eclipse Clifton as SA’s most sought-after beachfront suburb.

Nestled sedately on the periphery of Camps Bay, the area already boasts property prices on a par with Clifton – and has a few features that may soon put it ahead in the best-address stakes

“Bakoven shares a number of Clifton’s attributes and they both offer similar types of properties,” says Alan Meyer, area specialist for Chas Everitt International, “but Bakoven surpasses Clifton on some counts, particularly in terms of privacy.”

>>Focus on Bakoven, Western Cape, South Africa

Bakoven

CBakoven is Camps Bay's baby sister. A small exclusive seaside suburb located just as you leave Camps Bay en route to Llandudno and Hout Bay.

It is a suburb with two very distinct sides to it - below Victoria Rd and above Victoria Rd. The homes below Victoria Rd are mainly charming seaside bungalows and that area retains an almost village like feel, where neighbours still greet each other and know one anothers business.

>> View Properties in Bakoven
>> View Properties in Western Cape

>> Property of the week

Western Cape, Atlantic Seaboard, Bakoven

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 or Selling, what to do first?

Should you sell your property before you buy a new property or is it better to buy first and then sell?  Quite frankly, both options have their advantages – so let’s examine both and you can decide.

When you sell first, you will know how much money you have at your disposal and you’re able to narrow your focus on what you can afford to buy.  You have a much clearer picture of your financial position and can make a more informed decision on how much you can afford to use as a deposit for the new property. Your time frames become much clearer and you can use this to your advantage when negotiating the purchase of your new property.  By selling first you are also in a better position to make a clean offer with no conditions attached.  This type of offer is usually much more attractive to property sellers and may even be accepted above an offer that is higher but has conditions attached to it.  The positive equity realized after selling your property will also place you in a financially stronger position and you will have a better chance of having your home loan application approved.

Some people prefer to buy the new property first as this makes them feel secure in knowing that they have a place of their choice to live in before selling their existing home.  However, you will be under pressure to sell your home within a shorter time frame and might even have to lower your selling price.  Sellers who aren’t under pressure to sell often obtain higher sales prices because buyers realize the sellers are not under pressure to sell immediately. 

When the numbers of buyers are many and there is a shortage of housing in the market, homes generally sell within days of hitting the market.  In this instance, there is little risk in buying first and selling second.  However, this is very definitely not the situation in South Africa today.  This is a buyers’ market.  Because buyers have many homes to choose from, not every home for sale will sell.  Sometimes, regardless of the marketplace, a home will come on the market at a price that is simply too good to pass up.  Due to the seller’s personal circumstances, they may need to sell in a hurry and you might want to be the first offer on the table.  In this instance, it makes sense to buy before you sell.

Then there’s the emotional decision.  Real estate is often an emotional business – if you have seen your dream home and money is no object, buy it.

So you decide. 

Article by: Cheryl Marais – Direct Marketing Manager - Betterbond

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