Weekly Newsletter
Friday, 24 October, 2008
Property Search | Estate Agents | List your property

Edition 41 of 2008, Friday, 24 October 2008

Dear Reader

The International property market is still taking strain and the prices of houses has fallen. This is a fact and not a myth. I can remember a newsletter of a few years ago where we were reporting on the prices of property in England and that most South Africans could only afford to buy a parking bay in central London. Times has changed, this according to Savills Research, house prices in prime central London are expected to fall by 10 to 15 percent this year and then a further 10 percent in 2009 from the highs of 2007. Central London for a song

Not only have we seen a drop in the prices of houses but also dramatic drops in the stock market. However, the current stock market should not freak you out and should not cause alarm among South Africa property investors and homeowners. Stock market slump no cause for property panic

The current economic conditions are forcing people to rent rather than to buy with the results that we have seen a booming rental market over the last few months. According to emerging data it showed that the demand for rental properties has slowed down forcing landlords to lower their asking rentals. What is your viewpoint? Send it to news@cyberprop.com

The Trafalgar City report 2008, launched on Thursday, reveals that analysis done on private and public sector property sales over the past two years has unearthed interesting trends throughout South Africa. Property trends revealed

In this week's edition we focus on the landlord;

  • Landlords cautioned on rental increases
  • Property trouble: When a tenant runs a business behind your back
  • When your tenant does a duck
  • Stringent credit restrictions can make life difficult for landlords as well as tenants

Affectionately known as the Jacaranda City for all the purple blossom-bedecked trees, which line its thoroughfares in summer, Pretoria (Tshwane) is an elegant, quiet city that's a perfect contrast with its more frenetic neighbour, Johannesburg, just half an hour away. Pretoria has a long, involved and fascinating history - first as the capital of the independent Boer republic of the Transvaal, then as one of the three capitals of South Africa, it became an international synonym for apartheid. (www.safarinow.com), Focus on Pretoria (Tshwane), Gauteng, South Africa.

The editor


>> Real Estate news - Cape Verde Islands: A Real Estate Market With Potential

Most people have never heard of Cape Verde, the African islands off the coast of Senegal. However, sunshine lovers from all over the world, particularly from Britain and Ireland, have recently begun trickling into the country and enjoying its natural beauty. Charmed by what they found, some have even invested in property...

>> Central London for a song

Amid global volatility in terms of equities, prime located residential real estate in central London remains a sound investment and a key destination for property investors, including South African buyers.

This according to Dr Andrew Golding, CE of the Pam Golding Property group which is associated with global property giant Savills of London. "In the current market, with prime central London house prices down, there are certainly opportunities which offer good value for money — particularly for cash investors taking a medium to long term view," he says...

>> Further signs of a residential property recovery now becoming evident

A fortnight ago Lanice Steward, MD of Anne Porter Knight Frank, said that she sees signs of the Cape residential property market recovering – albeit slowly – in 2009.

That statement appears to have been vindicated by recent figures from the national bond originators, ooba, which show that average house prices year on year for September have risen by 3 to 3,5% from R768,557 to R794,977...

>> Stock market slump no cause for property panic

Tumbling share prices and financial upheaval around the world should not cause undue alarm among SA property investors and homeowners.

So says Aaron Hodson, head of international growth for Harcourts, the Australasian real estate group that recently bought a multimillion share of SA group Homenet. He notes that historically, investor interest in bricks-and-mortar has always picked up when stock markets declined, and given property a boost...

>> Property trends revealed

The Trafalgar City report 2008, launched on Thursday, reveals that analysis done on private and public sector property sales over the past two years has unearthed interesting trends throughout South Africa.

It showed that highly sought-after residential areas have experienced dramatic property price hikes despite the escalating interest rates.

According to the report several suburbs have shown sales growth in three-bedroom houses and a corresponding drop in smaller home purchases...

>> Landlords cautioned on rental increases

Landlords capitalising on demand for rental property in the current economic climate should be cautious about raising rentals too fast and too far.

Gerhard Kotzé, CEO of the ERA South Africa property group, says evidence from the group’s agents operating in the marketplace suggests that a high percentage of property owners are foisting hefty rental increase significantly above the official inflation rate on to their tenants in an effort to keep up with higher bond repayments brought about by higher interest rates...

>> Property trouble: When a tenant runs a business behind your back

Property law expert Brett Nicholson, of Shepstone & Wylie Attorneys, says when letting a property it is vitally important to be in control of exactly what your tenant can and cannot do, particularly with regard to running a business from the property.

The problems that can arise for a landlord with premises that are being used as a business site are endless...

>> When your tenant does a duck

Guest expert Mike Spencer, a Bloemfontein-based property valuer, estate agent and sectional title expert with Platinum Global, has some tips for landlords who discover that a tenant has done a runner:

Everyone who has let our property knows the feeling when you find out that your tenant has disappeared. Most time there are signs - unpaid or late paid rental. Some tenants plan to go without paying others just cannot pay...

>> Stringent credit restrictions can make life difficult for landlords as well as tenants

The financial institutions’ clamp down on defaulting mortgage bond repayments has made it absolutely essential for those landlords who are themselves bonded to receive payment from their tenants on time every month, says Bill Rawson, Chief Executive of the Rawson Property Group.

“In the old days,” said Rawson, “the banks were often prepared to be understanding about landlords who had difficulty in getting their tenants to pay their rents and they were open to extending bonds and granting access facilities on existing bonds without stringent credit limitations...

>> Beware the three month bond cancellation clause, warns Rawson

Buyers and sellers of South African residential property should take note that certain local banks are imposing big penalties on mortgage bond holders who fail to give a full three months’ notice of their intention to terminate a bond warns Bill Rawson, Chairman of the Rawson Property Group.

The penalty, adds Rawson, is very often three months bond payments, a large sum by any standards. The argument put forward by the banks to justify this apparently draconian ruling, says Rawson, is that they require time to process the documentation and to reinvest the money optimally...

>> D-day for Absa bond-holders

If you got a letter about your home loan from Absa, then you have probably got one day left to withdraw all excess funds before the rules change.

After tomorrow (23 October), you will have to re-qualify and meet affordability requirements to take your home loan up to its limit, says Donnie Claassen of Quantro Garden Route, a mortgage origination company that specialises in loans for investors...

>> Property prices up in Jo’burg’s Old South

Strong demand for property in some of Johannesburg’s southern suburbs has prompted solid price growth – although these homes remain relatively affordable.

Phillip Ratshikhopha, owner and principal of the RealNet Southdale franchise, reports that average property price growth in his area continues to outstrip the national average...

>> Selling your business or company? How to put more money in your pocket

Quite often, the net proceeds receivable by the owner from the sale of a business are significantly less than were expected when the selling price was agreed upon with the purchaser. In fact, when the net proceeds receivable by the owner are calculated, the owner often realizes that the business is worth more to keep than to sell!

One of the main reasons for this has to do with the way that the sale of the business was structured and the tax effects of the particular structure...

>> To the editor

To the editor: (Last week's newsletter)

I would love to know what will happen with property in the West coast area, Langebaan, Saldanha, Vredenburg, Veldrift etc. I am in Ireland at the moment, has been for the last 3.5 years, working as a quantity surveyor for a developer/builder. I would love to move back to SA and maybe look at property development in the mentioned area. I would canvas for investment from my current employer. I was wondering whether there are still opportunity for development in mentioned area. I heard rumours of a gas plant. Would there be a influx of people who work in the area?

Feedback received from: Susan Opie - Chas Everitt International

Dear Gary

The once small seaside holiday town of Langebaan has ‘mushroomed’ over the past 5 years into a rapidly developing and expanding residential as well as business area with excellent investment potential.

With its close proximity to Cape Town, low crime, relaxed beach lifestyle, excellent restaurants, ecotourism, golf estate with Gary Player designed golf course, watersports and equestrian activities, many South Africans seeking a better quality of life are choosing to semigrate and work from home or commute to cities where necessary. Several overseas visitors have also fallen in love with Langebaan and are relocating to this popular tourist destination.

To cater for the ever increasing population there are two private schools, a new shopping mall with the much larger West Coast Mall due to open in early 2009 and a retirement/lifestyle village currently being developed.

Despite the global financial crisis and political uncertainty, the property market remains active and although prices have stabilised over the past year, there are still bargains to be found in particular within the areas of Myburgh Park, Blue Lagoon, Calypso Beach, Country Club and the Golf Estate to name but a few. A significant amount of speculative building is taking place and brand new homes can be snapped up at good prices for investment or rental potential.

All things considered, a move to Langebaan is most definitely a smart one!

For more information regarding Langebaan property please contact:-

Susan Opie CEA
Property Specialist - Langebaan
Cell: +27 (0)82 403 2438
Email: susan.opie@everitt.co.za

>> News from - Green Building Council of South Africa (GBCSA)

GBCSA accepted as full member of World Green Building Council

The Green Building Council of South Africa (GBCSA) has been accepted as a full member of the World Green Building Council.

The World Green Building Council is a global non-profit organisation working to transform the global property industry towards sustainability. It works through its members, the country GBC’s, who are leading the movement to environmentally responsible building practices in their respective countries...

>> In the area...

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

  • Bedfordview
  • Stellenbosch
  • Faerie Glen (Pretoria)
>> In the area 1 - Bedfordview

Sectional title developments and gated communities are rapidly changing the Bedfordview propertyscape.

Historically one of the most affluent suburbs in the country, Bedfordview is known for its handsome freehold homes set on generous stands as well as its good schools...

>> In the area 2 - Stellenbosch

Stellenbosch student flats fill up for next year

Rental accommodation in Stellenbosch is being snapped up fast ahead of the next academic year.

All 200 units currently in rental portfolio of the local Aida office have already been let, says principal Renette Crous, “and by all accounts, units still available at other rental agencies are also going fast”...

>> In the area 3 - Market turns in Faerie Glen

Demand in Pretoria’s Faerie Glen property market has turned from the affordable sector in favour of the middle market.

This is in contrast to many other markets where entry-level and luxury properties are in demand, says Nelis Bezuidenhout of the RealNet Wapadglen office.

“Traditionally we have seen strong demand for townhouses in the R500 000 to R800 000 price range but currently property in the narrow band between R800 000 and R1m is doing well...

Focus on Pretoria (Tshwane), Gauteng, South Africa

With the lilac splendour of jacarandas as its trademark, Pretoria has grown into a metropolitan structure encapsulating a rainbow nation.

It's here where colourful people from all around gather... where busting trade and scintillating nightlife is offset by the tranquillity of nature's reserves...

>> View Properties in Pretoria
>> View Properties in Gauteng

>> Property of the week

Gauteng, Pretoria East, Faerie Glen

Bedrooms: 5
Bathrooms: 4
Garages: 3

HOUSE in DOUBLE Security Estate - Quartyard with fountain - Beautiful Entrance / Lobby - Whine cellar with separate entrance...

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