Invest in student flats: Buyer's guide
Every year thousands of students from all over the country stream to Stellenbosch, Pretoria, Potchefstroom and Bloemfontein to embark on their academic journey. Although these Universities all have residences which can accommodate students, the demand for accommodation far exceeds the supply, resulting in thousands of students having to find alternative accommodation each year.
Seeff’s agents all agree that this is one of the main reasons that parents and investors choose to invest in the student market, but that finding the right property in your price range requires a lot of homework. Prospective buyers need to undertake comprehensive research on specific areas and apartment blocks to narrow down their search before entering the market.
Jacques Becker, Seeff agent in Stellenbosch, says the student housing market in Stellenbosch has always been a captive market and buying property in the area is a good investment, especially when a property is close to the campus.
He says two bedroom apartments/houses in Stellenbosch are especially popular among parents who buy property for their student children for the duration of their studies, because the second bedroom can be rented out to someone else, giving the parent an extra income.
Interest rates set to remain unchanged
With the Reserve Bank’s Monetary Policy Committee (MPC) expected to announce the interest rate decision on Thursday, Investec’s Annabel Bishop is of the view that the repo rate will remain unchanged although the weakness of economic activity urgently signals a cut is needed.
Writing in the MPC Preview report, Bishop explains that the Rand is slightly stronger as no change to repo decision is already priced by markets.
Bishop points out that the Rand and the bond yields market continue to be influenced to a greater degree by Federal Open Market Committee’s (FOMC) communications and US data releases.
Foreigners hold a third of South Africa’s Rand denominated bonds and yields have risen with the 10 year government bond now recording 7.70 percent in SA from 6.74 percent at the start of the year.
According to Bishop, the Rand has strengthened in the last few days to R10.10/USD, R13.64/EUR and R17.25/GBP from R10.32/USD, R13.91/EUR and R16.60/GBP earlier last week.
She says while some expect the Reserve Bank to hike interest rates early in 2014, the economy continues to be slow, way below its potential growth rate.
Demystifying the damage deposit
The use of a tenant’s rental deposit is an issue that can cause friction between the landlord and tenant – one which is subject to certain misconceptions from both parties.
When a tenant vacates a property leaving it in a clean and damage-free state, having consistently paid their rent on time, they expect their full deposit to be returned to them, and are unpleasantly surprised when they receive a list from the landlord detailing charges for what the landlord deems ‘fair wear and tear’.
Marlon Shevelew, Director of Marlon Shevelew and Associates Inc, bbelieves that in order to avoid things turning ugly, it is vital for both parties to be aware of their legal rights in the landlord/tenant relationship, as set out in both the Rental Housing Act (RHA) and, more recently, the Consumer Protection Act (CPA).
According to the RHA, a landlord is not permitted to charge a tenant for ‘fair wear and tear’, as tenants are not liable for deterioration or depreciation in the value of the subject matter by ordinary and reasonable use.
Home loans and interest rate hikes
During the last meeting of the Reserve Bank's monetary policy committee in September this year, it was decided that the rates would be left unchanged for the seventh time - a decision that has made it easier for many homeowners to comfortably pay their mortgages.
This is set to change with many analysts telling Business Day that they predict that Reserve Bank Governor, Gill Marcus, will raise the interest rate by 50 basis points over the next eight months and a further 100 points by July 2015," says Jan le Roux, CEO of Leapfrog Property Group.
He says they all know the analogy of placing a frog in hot water - it jumps right out. Place it in cold water, heating it slowly and you've got frog stew, he says, and that's exactly the kind of situation homeowners face today.
"Whether these analysts are correct in their estimations or not, the interest rate will eventually go up and homeowners who haven't prepared for this will be caught in hot water".
According to a report by the International Monetary Fund (IMF) the South African household debt to disposable income ratio stands at 76 percent, having increased by almost 30 percent between 2002 and 2009. Add to this the National Credit Regulator's data, as reported on IOL, showing that almost half of all credit holders have impaired records and a worrying image starts to emerge.
Real estate induction course in CT
The Institute of Estate Agents, Western Cape, will be running a regular real estate induction course for those who are new to the industry or those not yet practising as agents but interested in becoming estate agents, says Annette Evans, regional manager for the Institute.
“This course would be beneficial to those leaving college or school who are interested in the property industry or those considering a career change, as well as serving as a 'principal assist' training programme for busy principals not able to spend time training prospective new recruits,” she says.
The course covers property contracts and law, property finance, the estate agent’s business plan, prospecting for new clients and properties, negotiation skills and an assortment of other skills and information needed by agents.
Challenges in EAAB’s intern programme
The Estate Agency Affairs Board’s programme to transform the real estate sector by introducing previously disadvantaged learners into estate agencies across the country, which was proposed and put together by the former Minister of Human Settlements, Tokyo Sexwale, is now about to go ahead and following its adoption by the new Minister, the Honourable Connie September, will be rolled out over the next ten weeks.
Bryan Chaplog, CEO of the Estate Agency Affairs Board, has asked for all estate agency leaders to sign a pledge form, committing their companies to the programme and the response has been very positive says Tony Clarke, Managing Director of the Rawson Property Group.
“As proposed at the original summit conference, where I played an integral role,” says Clarke, “the main aim of the programme is to de-racialise the estate agency sector. The goal is to have every agency in South Africa as well as each branch/franchise of those agencies to take on a new intern agent from a previously disadvantaged background.”
He says the agency or branch monitoring the intern will be responsible for mentoring and teaching their intern via the EAAB and more specifically helping him to study and pass the compulsory NQF4 and later the NQF5 examinations.
Tips for your property search
While finding the ideal home may sound like a relatively easy process, it may take a little more time and effort than buyers expect, especially if it’s not handled in the correct manner. However, there are methods that buyers can use to reduce the stress of finding a property and assist them in finding their perfect home in a fairly short period time.
This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says one of the biggest challenges that most buyers face when starting out on their property buying journey is knowing where to start when sifting through the vast volumes and wide variety of properties that are available to them. He says few buyers actually buy the first home that they view, and often it is the viewing of random show homes that can add to the buyer’s confusion and make the decision that much harder.
He says not having a plan and simply looking for as many show houses as possible can make it difficult to keep tabs on what the buyer has seen, what they liked about the various properties and for what price they were selling. Goslett says setting out with a clear plan can simplify the matter and make the ultimate buying decision a lot easier.