Buy-to-let market poised for growth
Savvy South African buy-to-let investors are now getting returns in excess of 6 percent per annum thanks to low home prices and interest rates.
Many of these investors are growing their portfolios to cash in on good returns, says Lanice Steward, managing director of the Cape Peninsula estate agency, Anne Porter Knight Frank (APKF).
APKF points out that about 90 percent of the homes in their rental portfolio are now owned by buy-to-let investors and this figure is increasing.
The other 10 percent are people who are living elsewhere, who might be working offshore, but do not want to sell their homes in case they return.
“In my opinion, the most successful investors are those who have focused on and become familiar with one or two specific areas.”
Steward says throughout the boom of 2005 to early 2009 potential homebuyers were able to get bonds fairly easily leading to softening of rentals.
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Interest rates and the property market
If interest rates hold at low levels, the outlook for the South African property market appears upbeat, says Seeff chairman, Samuel Seeff.
FNB household and property strategist John Loos says it is widely expected that the MPC decision will be to leave the repo rate unchanged at 5.5 percent, which would imply an unchanged prime rate of 9 percent.
Seeff say low interest rates used to be the core driver of market activity, however, he notes that over the past two years, this has done little to stimulate significant buyer activity.
“Any indication of an increase now is likely to negatively impact the already low demand,” he says.
He says ideally, they would like to see the Reserve Bank’s Monetary Policy Committee (MPC) take a prudent stance on interest rates.
The MPC will announce the interest rate decision later this afternoon.
He points to growth in property sales – thanks to marginal easing of the lending criteria on the part of banks –still, he says they are nowhere near the transaction volumes that would be viewed as normal market activity.
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New Act's impact on property rights
Property developers wishing to obtain property rights are advised to proceed under the existing provincial ordinances to change land rights.
Andrew Bembridge, director at Edward Nathan Sonnenbergs says property investors and South Africans wishing to obtain property rights should not proceed with new change of land rights applications under The Development Facilitation Act 67 of 1995 (the “DFA”) as all applications under the DFA will be brought to a halt on 18 June 2012.
Developers with applications already in the process may have to reapply under different laws, he says.
Bembridge explains that the DFA came into effect as an alternate mechanism for approval of land developments to expedite the time consuming process of applying for land use changes and development under the existing provincial ordinances.
While not stated in the DFA, the original intention of the DFA was to ensure that the provision of low cost housing was expedited.
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Why agencies need to be tech savvy
The willingness to adopt 21st Century Information Technology is what separates a winning real estate agency from the crowd, says expert.
Bill Rawson, chairman of the Rawson property group says the gap between these big agency brands, IT sophisticated organisations and those who continue to believe that elementary emailing and cell phone skills are all that are required to sell property is widening month-by-month.
“The truth is that developing and implementing successful IT systems is very expensive and beyond the reach of smaller organisations.”
For this reason, more estate agents are gravitating towards companies that can provide sophisticated IT systems and training that will take them forward in the use of this type of technology.
The use of good IT is particularly important these days in marketing, he says.
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Reasons to hire a property inspector
Homebuyers are urged to conduct thorough inspections and ensure there are no nasty surprises waiting at the end of the property sales agreement.
According to Eric Bell of Inspect-A-Home, a couple recently ended up paying R150 000- an amount over and above the purchase price of their new home.
What they didn’t know when they signed the sales agreement was that they would need to replace the roof sheeting, rotten door frames, and a leaking geyser before they moved in.
They signed a disclosure document stating that the house was in good working order, they couldn’t return to the seller or estate agent with their complaints or bills, he says.
Bell notes that Carte Blanche recently investigated the selling of houses with disclosure documents, often including a voetstoets clause.
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10 things that agents should know
Reaching the top of your game in any career is no mean feat and the property industry is no exception, says a seasoned real estate agent.
Shirley King, a property agent at Fine & Country International Realty SA,says in order to appreciate success, one needs to be prepared to start at the bottom and steadily work one’s way to the top with focused determination.
With an illustrious career that spans two decades under her belt she has paid her dues, having enjoyed meteoric highs, as well as endured considerable set-backs.
King recalls the real estate bug first biting during a visit to a show house in the 1980s.
She has since worked for the company that was selling that particular show house (where she garnered several ‘top seller of the month’ awards), started her own successful company called King Real Estate, taken two sabbaticals, was head-hunted by Lew Geffen and then joined her current employer, Fine & Country International Realty SA.
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Sapoa course to boost property skills
The Nelson Mandela Metropolitan University Business School (NMMU) will present a commercial property course in Port Elizabeth and East London.
NMMU has announced that it will partner with the South African Property Owners Association (Sapoa) to present a course entitled Introduction to Commercial Property Programme (ICPP) to be presented on 4 June in Port Elizabeth and 18 June in East London.
For the first time in years, Sapoa, in association with the NMMU, will be running an Introduction to Commercial Property Programme , says Martin Ferguson, Sapoa Human Resource development manager.
Ferguson says the programme is targeted at people who have no experience or formal knowledge of the commercial and industrial property sector.
He says the programme pitched at commercial property brokers, owners and employers that want to fast-track employees with an induction programme in commercial property, especially new employees.
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