Weekly Newsletter
Friday, 10 October, 2008
Property Search | Estate Agents | List your property

Edition 39 of 2008, Friday, 10 October 2008

Dear Reader

Thursday, 09 October 08 and South Africa's Monetary Policy Committee for the second consecutive meeting decided not to make any changes to the repo rate leaving it at 12 percent. Indeed not what property owners were hoping for.

What had Trevor Manuel, Minister of Finance had to say about this;

  • Building costs are a huge threat to what we want to do. I’m not too concerned but we need to be watching it,”
  • If liquidity dries up, how do you finance cross-border deals — be it in trade, investment, or links into the global payments system? Raising foreign exchange will be very tough in an illiquid market,”
  • It’s going to be a lot tougher and may impact on the cost of infrastructure.”
  • The bottom line is that in the next while — and it’s not going to be six months or a year but probably two years — there will probably be enormous recalibration of what we do and how we finance it,”
  • We’ve never lived through such a period of uncertainty,”

Consumers were hoping for some relief as were most economic sectors such as retail, motor vehicles, leisure and of course the residential market, which has become subdued since the heady days of the property boom. Rates Reaction – Andrew Golding

There has been much talk lately of the good opportunities that exist for homeowners with cash or equity in their properties to upgrade to larger, more expensive homes. However, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), there are other factors to consider before making such a move. “For example, you should ask yourself whether you want to spend all the equity you have built up as the deposit on a new home, or if you’d rather use only some of it to alter your existing home. Questions to ask before you upgrade

We introduce a new section to our newsletter this week "In the area" and this week we take a closer look at the property market in the following areas;

  • East London
  • Heidelberg - Western Cape
  • Kuilsrivier

According to a new survey that came out on Monday, Realestateweb, More than 5 months to sell a home - new survey reported as follows;

  • It took an average of 14 weeks and six days to sell property
  • Fewer people are receiving asking price from buyers
  • There were fewer residential investors (12%) buying properties last quarter compared to the second quarter (14%
  • One in five sellers cite emigration as the reason for offloading their properties - a figure that has been rising this year
  • One in four sellers cite financial constraints as the reason for putting their homes on the market - also a higher figure than the previous quarter
  • There's an increase in the number of investment properties that are being returned to the market without making a profit for their owners - and even a loss; and
  • Downscaling because of financial pressures appears to be more marked in KwaZulu-Natal and the Western Cape than Gauteng

Enjoy!
The editor


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>> Real Estate news - Dubai firm plans 'Amazulu World' in South Africa

DUBAI (AFP) — A Dubai-based real estate company said on Monday it plans to build a multi-billion-dollar themed entertainment development in South Africa, the largest of its kind in the African continent.

"Amazulu World" will be "a multi-billion-dollar themed entertainment and mixed-use destination development on the north coast of Durban," the firm Ruwaad said on the first day of an international real estate exhibition...

>> Rates Reaction – Andrew Golding

CAPE TOWN (October 09) - Although most South Africans will understandably be disappointed at today's decision by the Monetary Policy Committee to keep the repo rate unchanged it is to be expected given that our economy continues to experience inflationary pressures.

Consumers were hoping for some relief as were most economic sectors such as retail, motor vehicles, leisure and of course the residential market, which has become subdued since the heady days of the property boom...

>> Lanice Steward gives her reasons for "Total" confidence in SA residential property

The turmoil and near-collapse experienced in the world’s financial markets in the last three weeks have left people wondering just how all this will impact on the South African residential property market, says Lanice Seward, MD of Anne Porter Knight Frank.

“Once again,” she said, “we are seeing highly qualified economists predicting that this or that will happen in SA as a result – but often this is pure speculation...

>> Property logjam brewing

A potential shortage of property stock is brewing with major implications for property values and investment returns down the line.

That’s the warning from Gerhard Kotzé, CEO of the ERA South Africa property group, who says that while this may be difficult to imagine given current market conditions, there are early indicators that such a scenario is in the making...

>> Acquire good investments offshore

The current worldwide economic crisis will impact severely on the South African and international real estate sector causing perhaps one-third of the people currently employed in property related work – professionals, developers, contractors and, not least, estate agents – to have to find new jobs, but it carries with it the opportunity for canny investors to find exceptionally good new buys in the distressed international markets, says Mike Flax, Executive Director of Madison Property Fund Managers...

>> Madison CEO outlines strategy for "collapsed" economic scenario

MADISON ESTABLISHING VULTURE FUND TO ACQUIRE GOOD INVESTMENTS OFFSHORE

The current worldwide economic crisis will impact severely on the South African and international real estate sector causing perhaps one-third of the people currently employed in property related work – professionals, developers, contractors and, not least, estate agents – to have to find new jobs, but it carries with it the opportunity for canny investors to find exceptionally good new buys in the distressed international markets, says Mike Flax, Executive Director of Madison Property Fund Managers.

>> Higher inflation good for property - and Zuma presidency could lead to better delivery by public service bodies - which will also benefit property

In a statement some weeks ago Bill Rawson, Chairman of Rawson Properties, said that, as he sees it, the residential property market in SA had bottomed out and is now on a slow but clearly discernible recovery path.

The recent deposing of President Mbeki has, said Rawson, surprisingly caused only a momentary halt in property’s recovery – and it now continues as before...

>> Property ownership versus life-long rental a ‘no brainer’

A leading property group has dismissed as totally inadvisable the renewed debate surrounding property ownership versus rental.

“Right now the pendulum favours rental more out of economic necessity than choice. But long term, there’s no question that property ownership makes more sense financially and in many others ways,” says Gerhard Kotzé, CEO of the ERA South Africa property group...

>> Questions to ask before you upgrade

There has been much talk lately of the good opportunities that exist for homeowners with cash or equity in their properties to upgrade to larger, more expensive homes.

However, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), there are other factors to consider before making such a move. “For example, you should ask yourself whether you want to spend all the equity you have built up as the deposit on a new home, or if you’d rather use only some of it to alter your existing home...

>> Entrepreneurs more reliable, survey shows

Small business owners are often viewed as bad risks when it comes to mortgage finance, but new study shows that they are actually better risks than the average borrower.

The Experian study, which investigated the financial behaviour of 2,7m small business owners from April 2007 to April 2008, shows that fewer than three out of 100 business owners fell 90 or more days behind on their home loans during the period under review, compared to a delinquency rate of almost four in 100 among homeowners in general...

>> To the editor

Hi

I am a South African and have been living and working in Dubai UAE for the last 10 years. I am a loyal "Capey" in terms that my wife and I have invested in property in SA over the last few years with a piece of land in Knysna and a two bed roomed house in Sedgefield. The opportunity has presented itself that I may be able to invest in a house in Langebaan. Would it be possible to give me your opinion on the market in general as well as how you see the development of Langebaan and whether this would be a smart move or not? Not having been back to SA for any length of time over the last 10 years I would appreciate your opinions as I have found your news letter to be of great value and interest for serious property investor/owners.
Kind regards

Gary Reuter
Dubai
UAE

From the editor - Send you viewpoint to news@cyberprop.com

>> News from - Bales Delaporte

Commercial Property - A Certain Asset in Uncertain times

Whilst the uncertainty of global markets currently haunts investors, the certainty of income streams on commercial property are proving to be relatively comforting for commercial property investors.

This is according to Tony Bales of Bales Delaporte Commercial Property Dealmakers who says that whilst various tenants are feeling the squeeze and interest rates are higher than they were 24 months ago, on the whole, income streams from commercial property investments have held up extremely well in South Africa...

>> In the area...

"In the area" is a new section in our newsletter that will focus on property news in specific areas.

This week we take a closer look at the following areas;

  • East London
  • Heidelberg
  • Kuilsrivier
>> In the area 1 - East London bucks the property downtrend

In stark contrast to prevailing property market conditions, the East London residential sector is positively buoyant.

Colin Kuhlmann, principal of the local Chas Everitt International franchise, says homes across the price spectrum are moving well and that top end homes in particular are selling fast.

Kuhlmann himself has sold six homes from the company’s exclusive property collection at prices in excess of R2m over the past three months, and achieved a record price for a home on the Nahoon River...

>> In the area 2 - Pretty Heidelberg draws tourists, lifestyle buyers

Heidelberg in the Western Cape is widely regarded as the western gateway to the Garden Route and is benefiting from increasing numbers of tourists and homebuyers who attracted by the slower pace of this country town and are finding good property value here.

Derek Jones of the local Homenet estate agency notes that Heidelberg is a mere 35km from Witsand, famous for its whale sightings, and an easy day trip away from Stilbaai...

>> In the area 3 - Young buyers boost Kuilsrivier market

The property market in the Western Cape town of Kuilsrivier is showing signs of renewed activity, with young buyers being particularly evident in the market.

“Newlyweds and young professionals striking out on their own are active in the price range between R700 000 and R900 000 and they are targeting townhouses in newer developments. The brand new properties surrounding the recently opened Zevenwacht shopping complex are especially in demand,” says Elton Gallant of the local RealNet office...

Focus on East London, Eastern Cape, South Africa

South Africa's only river port city is situated on the Buffalo river on one of the most attractive stretches of the Eastern Cape coastline. Sweeping white beaches extend for miles - uncrowded and unspoilt.

The climate is temperate and watersports are enjoyed all year round. River mouths, lagoons and gullies provide a paradise for fishermen. Several seaside resorts are scattered along the coastline, all within a short distance from East London...

>> View Properties in East London
>> View Properties in Eastern Cape

>> Property of the week

Eastern Cape, East London


Search for property in your area

Enter City/Suburb:
>> More than 5 months to sell a home - new survey

Sellers take much longer to offload properties, take bigger discounts, but estate agents are feeling more positive - barometer in a nutshell.

Not so long ago, properties were being snapped up within weeks and even days of being advertised to the market. But these days, it is taking an average of more than five months to sell residential real estate.

This was one of the trends to emerge in the latest FNB Property Barometer, a survey that gauges sentiment and other factors among estate agents...

>> Software at its best!

Cell Phone enquiries from the public

Buyers driving past your advertising boards will be able to see an unique Internet Number allocated to the specific property. They will then SMS that number to 35476 and will receive an SMS back with all the details of the property. At the same time the agent / agency will also be informed of a potential buyer. How's that for technology working for you! The cost - mahala! Free to all CyberAgent subscribers.

Here's a diagram on the way this process will work...

  1. Agent captures the details of the property and pictures into CyberAgent
  2. Agent updates the property to the Internet
  3. The Internet server sends back a unique number for that property
  4. Agent puts up his "For Sale" board together with our SMS board
  5. Potential buyer sees the "SMS" board and SMS's the unique number to the Internet server
  6. The Internet server sends back an SMS with all the property details and a link to the website where he/she can view pictures on the propert

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

For Sale Property:
Eastern Cape Freestate Gauteng Kwazulu Natal Mpumalanga North West Northern Cape Limpopo
Western Cape

To Rent Property:
Eastern Cape
Gauteng Kwazulu Natal North West Western Cape


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