Property 24/10 - 128

No need to rush buying a property
Although market conditions are currently ideal for property buyers with many prime opportunities available to them, there is no need for them to rush their decision.

This is according to Gerrit Stenvert, Broker/Owner of RE/MAX Outeniqua, who says because purchasing a property is not a decision to be taken lightly, a buyer should take their time and do some research. "They should make a list of their needs and wants along with determining their plans for the future.”

He says once a buyer has decided what they are looking for, it is important for them to work with a reliable estate agency that comes with good referrals, is registered with the Estate Agents Affairs Board and operates according to the Financial Intelligence Centre Amendment Act and Consumer Protection Act.

“An experienced property professional with a reputable company will be able to assist the buyer in various ways, such as helping them determine what they can afford, providing the buyer with valuable information regarding the area they are interested in and finding them a home that matches their criteria.”

Selling homes: auction vs estate agent
In the past, a home on auction would probably have belonged to a distressed seller, someone who had fallen on hard financial times and had his or her home repossessed by the bank. Today, however, more and more estate agencies offer auctions as an option to their sellers, as an addition to the more traditional estate agency sale.

Heidi Franck, Group COO at One Property Holdings outlines how to decide on the best option for your property.

The residential property market is slow and due to the current economic climate, there is little growth. That said, sellers will still sell their properties, but it is taking much longer than previously, depending on its value. “Houses that are priced below R 1 million will sell more quickly, as there are more buyers in this market than for the more expensive properties,” Franck explains.

To this end, buyers in a rush to sell their properties may find the idea of an auction more appealing, as properties move more quickly selling this way. Most sales that take place on auction do not have conditions or ‘subject to’ clauses, Franck says. Buyers at auctions are required to put down a deposit and have been pre-approved for a bond by their banks prior to bidding, so the sale on auction is unlikely to fall through due to the inability of the seller to qualify for a bond. Moreover, it frees the seller from dealing with buyers who are not serious - if they make a bid on the house, they generally have their ducks in a row and mean business.

Gap between new and secondhand homes
The gap between new buildings and those that have already been lived in for some time has widened drastically in South Africa since 2009.

This is according to Bill Rawson, Chairman of the Rawson Property Group, who says this is all the more remarkable because builders and developers have ‘bent over backwards’ in the last few years to reduce their price rises and in many cases have done so very efficiently.

He says FNB’s Barometer for some of the less affluent areas in Cape Town shows that in 2009, the gap between new buildings and those that had already been lived in was only 3%, and nationally the figure was only 2%. However, he explains when the economic crunch hit in 2010, the gap rose rapidly to 23% for the less affluent Cape areas and 22% nationally - today, the gap stands at 26% for Cape Town and 25% nationally.

These figures, says Rawson, lend credibility to the statements often made by estate agents that secondhand home prices in South Africa are at levels which are significantly lower than those of the peak periods in the past, but these are unlikely to remain at these low levels for much longer.

5 tips to reduce your home loan
A house is usually the biggest asset that you will buy in your lifetime, but it's made affordable by the 20 year term of monthly repayments, according to Craig Deats, ooba sales director.

Deats says most people factor their monthly bond payments into their budgets, but don't think about the total value of repayments over the term of the loan.

As an example, he says when using the ooba calculator, one can see that on a house bought for R1 million, paid off at R8 678 monthly over 20 years, the buyer will have paid the bank R2 082 776.

Click here for the calculator.

However, there is a lot that one can do to reduce the term and the final total of loan repayment, says Deats.

1. The bigger the deposit, the better

It is wise to allocate whatever money you can to your deposit when applying for your home loan.

This makes your application more likely to be approved by the bank, and a R20 000 deposit on a R1 million home loan will reduce your total repayments by R41 656.

2. Secure a lower interest rate

Another approach to take is to secure the lowest possible interest rate.

Use an expert mortgage originator to negotiate on your behalf to get the lowest possible interest rate.

“Even a small reduction will result in a significant reduction in total repayments.”

Secure estates appeal to home buyers
South Africa’s secure gated estates account for more than a quarter of the value of South Africa’s total residential property market, says a report.

Jeff Gilmour, President of the Association of Residential Communities (ARC) explains that this is clear from a newly-released groundbreaking study by the Property Sector Charter Council (PSCC), which has established the value of residential property in South Africa at R3 trillion.

Click here to read the article.

Gilmour says a recent survey conducted by ARC found that Home Owners Associations (HOAs) in gated estates have assets of R800 billion under their management, which is close to 27 per cent of the R3 trillion total market value.

“It is also almost double the R420 billion value that the PSCC put on the nation’s retail shopping centres,” he says.

The ARC survey also established that annual rate payments by estate homeowners amount to R4.7 billion, while their collective levies total R8 billion annually.

Easy and practical home greening tips
There is a growing awareness among home designers about the importance of reducing energy costs and creating an eco-friendly home. 

Nancy Todd, Western Cape Regional sales manager for the Rawson Property Group says what so often happens is that the man-on-the-street picks up a book or a brochure on this subject and then finds himself daunted by what is expected of him and by the cash outlays required, but these need not be nearly as expensive as most people think.  

Potential homeowners and builders should learn to take the necessary steps and do so with humour and light-heartedness rather than taking this matter so seriously. 

She says if, however, you do have funds or can get a loan, it does pay to install a heat pump and solar heating as a first step towards sustainable living. 

These will reduce your energy expenditure by 40 percent - geysers and pool pumps are the big consumers of energy, thereby recovering the capital outlay in less than three years. 

New: Henley Real Estate Centre Africa
Henley Business School South Africa has introduced the first African centre for the real estate, built environment and planning industries.

The centre will be based within the main campus located in Paulshof Johannesburg.

Henley’s main objective for the Henley Real Estate Centre Africa is to provide opportunities for international standards of education and intelligent industry collaboration in order to professionalise and integrate the industry.

 It will focus on executive development, knowledge transfer, research and academic programmes, drawing from 34 years of experience in the Henley School of Real Estate and Planning in the UK, acknowledged as one of the top three schools in the world. 

Practical at heart, it will build the skills for a commercially astute, environmentally aware and transformed industry.

“We will work closely with government, business and communities in emerging economies to increase management and professional capacity and, in so doing, to accelerate rural and urban infrastructure development,” says Prof Jon Foster-Pedley, dean of Henley, the African arm of Henley Business School UK.

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