Weekly Newsletter
Friday, 11 April 2008
Property Search | Estate Agents | List your property

Edition 14 of 2008, Friday, 11 April 2008

Dear Reader

"The battle with inflation is going to be long and hard" This is what Tito Mboweni, Reserve Bank Governor had to say yesterday as the bank decided to increase the repo rate by 50 basis points to 11,50 percent lifting prime interest rates to 15 percent.

The increase in prime interest rate was indeed not good news for home owners and property investors but what was the general feeling about this increase and the results thereof in the property market?

Andrew Golding Pam Golding Property Group - The decision by the Monetary Policy Committee to raise the repo rate by 50 basis points is regretted by Andrew Golding, CE of the Pam Golding Property Group, who believes it will undoubtedly exert further pressure on consumers whose disposable income is already being eroded by rapidly rising fuel and food costs as well as proposed significant hikes in electricity tariffs.

Jeanne van Jaarsveldt RE/MAX - The repo rate increase of 50 base points will further trim the already shrinkage in the volume of residential property sales, but its impact would again be cushioned, just as the earlier increases had been absorbed to some degree, by sellers lowering their expectations on asking price.

John Loos FNB Home Loans - With CPIX inflation near 10%, and today’s 50 basis points rate hike signalling the seriousness with which the SARB takes its inflation targeting job, John Loos, FNB Home Loans Property Strategist, warns that the economy is definitely not out of the “danger zone” yet with regards to risks of further rate hikes.

As such, he advises the market to proceed with caution when involved in home purchasing and to buy in a price range well within one’s means. “Scenario planning to allow for the possibility of further interest rate hiking would be a good practice.”

Falling house prices and rising inflation may make you feel queasy about bricks-and-mortar assets. Don't despair: it won't be long before prices start turning the corner and heading up again. That's the message from Tony Clarke, managing director of Rawson Properties, who believes you can expect a 60% capital gain on your property by 2011. His comments follow warnings from estate agency bosses like Lew Geffen, chairman of Lew Geffen Sotheby's International Realty, that sellers reject today's offers at their peril. Geffen believes the property market is faring much worse than Absa's House Price Index figures suggest. Property returns: "expect 60% in 3 years

Are you ready? One of the keys to making the buying a house process easier and more understandable is planning. In doing so, you'll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the process. This according to our www.cyberprop.com Blog team.

Enjoy!
The editor


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>> Real Estate News - Zimbabwe - Change in Zimbabwe will be good for property

Hopes are high for a peaceful regime change in Zimbabwe – and for the positive spin-offs that it would bring in terms of foreign aid and investment.

Also on the cards would be a renewal of the local property market, and increased foreign interest in property in the whole SADC region, says Berry Everitt, MD of the Chas Everitt International property group, which has just announced plans to open offices in Zimbabwe as well as Zambia...

>> Rate hike to hit property market

The latest interest rate hike will hit residential property markets, with a property expert saying this year's predicted recovery in the market would be delayed considerably.

The South African Reserve Bank earlier hiked rates by a further 50 basis points, after a brief pause during its January meeting, bringing the increase since June 2006 to 450 basis points...

>> Property returns: "expect 60% in 3 years

It won't be long before the residential property market turns the corner, says real estate player.

Falling house prices and rising inflation may make you feel queasy about bricks-and-mortar assets. Don't despair: it won't be long before prices start turning the corner and heading up again.

That's the message from Tony Clarke, managing director of Rawson Properties, who believes you can expect a 60% capital gain on your property by 2011...

>> Rates reactions - Andrew Golding Pam Golding Property Group

Today's decision by the Monetary Policy Committee to raise the repo rate by 50 basis points is regretted by Andrew Golding, CE of the Pam Golding Property Group, who believes it will undoubtedly exert further pressure on consumers whose disposable income is already being eroded by rapidly rising fuel and food costs as well as proposed significant hikes in electricity tariffs.

From a residential property market perspective Golding says the higher interest rates will once again see the lower and middle sectors bearing the brunt of this increase which will serve to slow the market even further...

>> Rates reactions - Jeanne van Jaarsveldt RE/MAX

Today’s repo rate increase of 50 base points will further trim the already shrinkage in the volume of residential property sales, but its impact would again be cushioned, just as the earlier increases had been absorbed to some degree, by sellers lowering their expectations on asking price.

More important to Jeanne van Jaarsveldt, marketing and finance director of RE/MAX of Southern Africa, was the effect the hike would have on residential rentals as he was in little doubt the rise would be flashed onto tenants...

>> Rates reactions - John Loos GNB Home Loans

With CPIX inflation near 10%, and today’s 50 basis points rate hike signalling the seriousness with which the SARB takes its inflation targeting job, John Loos, FNB Home Loans Property Strategist, warns that the economy is definitely not out of the “danger zone” yet with regards to risks of further rate hikes.

As such, he advises the market to proceed with caution when involved in home purchasing and to buy in a price range well within one’s means. “Scenario planning to allow for the possibility of further interest rate hiking would be a good practice.”

>> To fix or not to fix

JOHANNENSBURG (April 10) - Fixed home loan rates became popular in 1998 when homeloan rates catapulted to 23,5% and the prime lending rate reached an extreme high of 25.5%.

Financial institutions offer fixed-rates on home loans for which the interest rate is predetermined for a certain period of time and does not vary in line with the Reserve Bank’s repo rate. Deon Lessing, marketing director of Betterbond, provides insight on fixing homeloan rates.

>> Renting - the "real deal"

Staggering rentals for family homes. Prices, trends for rental property: Joburg, Cape Town, Durbs.

The past five years of economic prosperity saw a large number of people becoming homeowners. Interest rates bottomed out, inflation was low and the economy was booming.

But all good things must come to an end, and no sooner had we bought our sprawling homes when spiralling food and oil prices caused a rapid increase in worldwide inflation, leaving the SA Reserve Bank little choice but to increase interest rates. On the back of the stagnant housing market, the rental market is showing a remarkable upswing. Yields are up from as little as 0.5% in the past, to a staggering 9% (FNB Property Barometer, March)...

>> Are You Ready?

Knowledge and experience are the keys to successful real estate transactions.
One of the keys to making the buying a house process easier and more understandable is planning. In doing so, you'll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the process.

Do You Know What You Want? That is the question.
Whether you are a first-time property buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy? Are you planning to move to a new area due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not know you have? Do you have a purchasing timeframe?

Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting you’re your estate agent.

Do You Have The Money?
Property and financing are closely intertwined. (Financing is the difference between the purchase price and the down payment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require high down payment or less.

In addition to a down payment, buyers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a house with no money down, but also underwrite closing costs.

Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most Property buyers choose to buy with some cash up front.

As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a house that requires the owner to pay some or all of your settlement expenses. Speak to your estate agent for more details.

Is Your Financial House in Order?
Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a property, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.

The www.cyberprop.com blog team

>> Offers to purchase should never be rushed

Property buyers should never allow themselves to be hurried into signing an offer to purchase, even if they’re very keen to buy a particular property.

That’s the advice of Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), who says it is vital that buyers read every clause in an offer to purchase and make sure they understand them all before putting pen to paper.

>> Letters to the editor

Reader: Thank you for your wonderful newsletter. Please need your help as Interest rate is killing a few of us. How do we avoid losing our houses? Can we negotiate a lower premium with the bank? Or do you recommend we work via a lawyer?
Anita

Editor: Anita, we have asked one of our Mortgage Originators for their answer. Here it is;

There are a number of options to help you through this difficult period and to avoid losing your home.

The banks can defer payment for a certain period, but they have certain terms and conditions. Or you can extend your loan period from 20 to 30 years – you will pay more interest in the long term, but your monthly repayments will be lower.

Or you might want to consider a re-advance on your home loan. When you have repaid a portion of your home loan, you may be eligible to borrow all or part of the loan amount again.

By taking up a re-advancement on your home loan, you’ll be provided with the cash needed to have more money in your pocket each month by consolidating your debt. Through debt consolidation, you are able to reduce your multiple monthly payments and bills to a single monthly instalment. Moreover, the amount of money paid each month will be substantially reduced, since you will be paying less interest, thus giving you more money to spare.

Betterbond can see you through the tough times by arranging the re-advancement and we will also ensure that funds are available to you immediately. Through our valued partnership with one of South Africa’s most recognised bridging finance companies, Bridgeway, you will have immediate access to that extra cash. Betterbond can be contacted on 0800 007 111.

>> Focus on Stilbaai, Western Cape, South Africa

The treasure of nature unique to Still Bay (Stilbaai) has attracted visitors to this Bay of Sleeping Beauty for centuries. The unique limestone area with its abundance of natural springs, provided the ideal habitat for ancient man, whose footprints still linger here.

For close on two hundred years Stilbaai has grown in favour as a holiday resort and retirement village for those charmed by the safety, tranquility and harmony...

>> View Properties in the Western Cape
>> View Properties in Stilbaai

>> Property of the week

Western Cape
Stilbaai
Jongensfontein

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>> News from - Realnet Property Group

Country towns flourish as semigration trend grows
The move towards “semigration” is growing in SA and boosting the demand for property in many country towns.

The term semigration (from semi-emigration) refers to those who seek a better quality of life away from urban grime, crime, congestion and stress, but who are not prepared to leave South Africa...

>> Software at its best!
CyberAgent makes canvassing easy! Use data from SAPTG, CyberTrade and the Deeds office to do mail drops!
CyberAgent enables the estate agent to manage buyers and sellers, sending them birthday cards, emails etc.
CyberAgent enables the estate agent to manage properties and print great reports with a click of a button.
CyberAgent enables the estate agency to keep track of sales related commissions, VAT, outstanding payments and more...
CyberAgent links with the transfer attorneys, send and monitor transfers electronically!
Get your own dynamic web site linked to CyberAgent. Work OFFLINE!!! Only go online when updating your web site.

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For Sale Property:
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Western Cape

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


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