Weekly Newsletter
Friday, 18 February, 2005

Edition 6 of 2005, Friday, 18 February 2005

Dear Reader,

A cut in interest rates? SOUTH African bond yields fell to record low this week, fueled by expectations that the Reserve Bank will lower interest rates at its next monetary policy committee meeting in April.

".. as a kid I used to milk cows in Devil's Peak on "Momsen's Farm" - so a lot of attachment to the area..", one of our readers shares with us the difference between "Devils Peak" and "Vredenhoek"

So what is a property bubble exactly? A property bubble is an unsustainable growth in property prices causing a collapse or severe correction at some point.
This is what Dave Welmans from "The Property Game" shares with our readers this week.

And that reminds me, we promised a competition this week. This week in Have Fun, we are giving away two copies of "The Property Game". Don't miss out!

From small beginnings in 1714, Strand, Western Cape, South Africa has grown into a thriving town & vacation destination 30 minutes from Cape Town and offers a wide range of activities and miles of white, sandy beaches. Read more in Focus on

Enjoy!

CyberProp greetings!
The editor

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>> Real Estate News

Bond yields hit record low on hope of rate cut

SOUTH African bond yields fell to record lows yesterday, fueled by expectations that the Reserve Bank will lower interest rates at its next monetary policy committee meeting in April.

Analysts said that the strong rand and favourable inflation outlook would give the Bank room to cut rates without fueling demand and increasing fears of a rise in inflation...

>> The Property Game - SA Property Bubble - Talking about the bubble.

Supplied by Dave Welmans www.thepropertygame.co.za

There is a famous saying that goes "economists have as much success controlling the economy as weather men have of controlling the weather". In the last two years this observation has never been truer, the rand /dollar exchange rate being a case in point.

If you follow the financial news you will have seen our economists debate the subject of sky-rocketing property prices with equal passion...

>> "Devils Peak" vs "Vredenhoek"

From one of our readers:

"As an old resident of the Devil's Peak Estate area, I noticed that various Estate Agents in the City Bowl Area have a lot of properties incorrectly listed as "Devil's Peak" properties, when they are in fact in Vredehoek. The concern is of course that by incorrectly listing the area's that these properties are situated in..

>> Residential property outlook for 2005

Yet more property price increases are on the cards for 2005, albeit at a slower rate than last year, according to Len Pears, founder and director of Pears Properties. “Residential properties in the Western Cape showed increases of over 30% last year. Sales in the greater Southern Suburbs over the past two months have increased at a slower rate of roughly 15% annualized, due to buyer resistance. Buyers have definitely put their foot down and are not prepared to pay unrealistic prices for houses anymore,” says Pears.

>> Focus on Strand, Western Cape, South Africa

Situated along approximately 6 km of coastline, at the foot of the Hottentots Holland mountain range, situated 20 minutes from Cape Town International airport and about 40 minutes from the well known V & A Waterfront, you’ll find the small town of The Strand nestled in a tranquil setting, combining coastal and country living in close proximity of all amenities.

In the past two years property values in this area have soared to new heights and have seen development of new apartment blocks in excess of R 800 milion and has become one of the Western Cape’s most prosperous investment areas which still shows a potencialafor enormous growth.

Invest in Strand and make your investment work for you

By Durr Strand

View Properties in Western Cape | View Properties in Strand

>> Property of the week

Western Cape, Strand

Price: R4 300 000
Bed: 5
Bath: 5
Garages 2

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>> S. Africa reports 3.7% growth in 2004

JOHANNESBURG, Feb. 15 -- South Africa's economy grew by 4 percent in the final quarter of last year, bringing overall growth in the gross domestic product (GDP) for 2004 to 3.7 percent,the country's statistical authorities announced on Tuesday.
South Africa gained overall growth in GDP of 2.8 percent in 2003. But the fourth quarter growth in 2004 was lower than that in the previous quarter, which hit 5.7 percent, said Stats SA.

South African economists expected the slow-down in the growth rate could spell good news for interest rate cuts.

"The combination of strong rates of capital investment and slowing growth are expected to gradually suppress SA Reserve Bank concerns of capacity problems in the economy, preparing the way for further mild interest rate reduction," economist John Loos said, quoted by the SAPA news agency.

"We expect a 50 basis point repo rate cut during April," he said, adding that the GDP figure was lower than the expected 4.2 percent growth.

The South African Reserve Bank, the country's central bank, decided on last Thursday to keep the repo rate unchanged at 7.5 percent, following the expectation of the majority of economists but disappointing trade unions which accused strong rand of leading to huge job losses.

Stats SA said the final quarter's increase could be attributed to increases in real value added by finance, real estate and business services (1.1 percent), wholesale trade, retail trade, hotels and restaurants (1 percent), transport and communication (0.7 percent) and manufacturing (0.4 percent).

Overall, the growth in economic activity for 2004, was attributed to wholesale trade, retail trade, hotels and restaurants (0.9 percent), finance, real estate and business services (0.7 percent), transport, storage and communication (0.5 percent) and manufacturing (0.4 percent).

>> Have fun!!

This week 2 lucky readers stand a chance to win a copy of Iona Minton & Dave Welmans' new book: The Property Game.

All you have to do is to complete the short survey below.

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