Property downgrades and upgrades
A recent FNB report revealed that 14 percent of sellers were downscaling due to life stage while 20 percent were upgrading in the fourth quarter of 2013.
We chat to agents in various areas to find out more about downscaling and upgrading in the areas in which they operate.
Of people selling in your area, what are the main reasons they sell property?
Laurie Wener, managing director for Pam Golding Properties (PGP) in the Western Cape’s Cape Town metropolitan area, says there are various reasons why people sell, including the need to downgrade or upgrade, a move for safety and security reasons, family changes, while emigration and unemployment are becoming dominant trends, at least in their area.
Carol Reynolds, area principal for PGP in Durban, Durban North and La Lucia, says they are experiencing stock shortages, and as such, people generally stay in their properties and only sell when they absolutely have to.
Building activity and housing costs
The Absa report reveals that since the start of 1994 to November 2013 a total number of 1 123 242 private sector financed new housing units were built countywide, of which about 823 370 units, or 73.3 percent of the total, were constructed in the segments for smaller-sized houses (measuring below 80 square metres) and higher-density flats and townhouses.
Writing in the report, Jacques du Toit, Absa Home Loans property analyst says the number of new housing units for which building plans were approved dropped by 32.4 percent year-on-year (y/y) to 3 761 units in November and was down by as much as 1 627 units compared with October last year.
The construction phase of new housing saw a drop of 30 percent y/y to 3 331 units built in November, which was 1 306 units less than in October, he says.
Increase property value with a carport
Investing in property is a big decision and serves as a life-long investment that could potentially earn you big profits. It is vital to bear certain things in mind when buying a home, as these same factors will determine whether you will be able to sell it when the time comes.
Increasing property value is key and is also simpler than you might think.
Apart from the obvious improvements to your home, it is often necessary to add a couple of extras that make it seem all the more attractive to potential buyers. If these buyers know that their livelihood will be at its peak in their new home, they are more likely to make a viable offer.
As safety is an undeniable need for any couple or family looking to buy property, it should be your first priority. Installing burglar bars and security gates in all rooms will set prospective buyers at ease.
7 reasons to invest in property
Before you decide where to invest your hard-earned money, consider these top seven reasons, selected from countless others, why a direct investment in property is a superior alternative, particularly in these times when market volatility, investment risk and investor uncertainty have reached unprecedented levels, says Dr Koos du Toit, chief executive officer of P3 Investment Group.
1. Simple but highly effective
Far removed from complex investment options, shrouded in jargon, buy-to-let property investment is simple and streamlined.
You don’t need to understand economics, markets or financial jargon. You simply buy a property using mortgage finance and rent it out to a tenant.
Provided you choose a good property in a good area with solid rental demand, and maintain the property over the years, this property will continue to produce an ongoing, passive, inflation-linked rental income year after year, as well as steady capital growth over the long term.
2. Proven, tried-and-tested system
Buy-to-let property investment is a system of wealth creation that has been proven and tried-and-tested by countless ordinary investors, as well as the world’s wealthiest property owners, institutional investors such as pension funds, and listed property companies, all of which, essentially, are large-scale buy-to-let specialists.
Attracting multiple offers on property
Homeowners who plan to sell their property this year may find the conditions slightly more to their liking than in the past few years.
This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says various factors will come into play and have a positive impact on the housing market over the next 12 months.
“While we have seen favourable conditions for buyers over the last while, we could see the market shifting towards sellers in 2014, with the numbers of properties available to buyers lessening. According to both Absa and FNB property reports, residential building activity has been under pressure and the number of new homes being built has dropped. This, coupled with fewer existing homes on the market, could give rise to more sellers attracting multiple offers on their property.
“However, that said, just because it is a possibility, doesn’t mean it’s a guarantee. It is still important that sellers are aware that we are in a competitive real estate market and buyers want the best value for money that they can find. Sellers must be prepared and present their homes in the best possible manner to give themselves the best chance of garnering not just one offer, but several,” he says.
Sole mandate vs open mandate
As sellers return to a more upbeat marketplace, a question which often arises is: why should I sell my home on a sole mandate - in other words exclusively through one real estate agency.
Howard Markham, national manager,business development for Pam Golding Properties, explains the facts and practical reasons why a sole mandate with a reputable estate agency is the best option for a seller.
He says a sole or exclusive mandate is a formal instruction to an agent to have the exclusive right to sell a client’s property on their behalf for a period of time, and this can range from three months to as long as two years.
This agreement precludes the homeowner from selling the property in his or her private capacity, and it means that during the period of the sole mandate anyone interested in buying the property must deal solely with the appointed agent.
Markham says there is a school of thought which may then argue that surely the greater the number of agents listing the property the greater the exposure to potential buyers and so the quicker the sale? This is not so, and is further exacerbated by a misconception that estate agents simply want control of the mandate for all the wrong reasons.
Civil summonses issued for debt
According to Statistics South Africa (Stats SA) the total number of civil summonses issued for debt increased by 0.3 percent in the three months ended November 2013 compared with the three months ended November 2012.
A 6.5 percent decrease was recorded between November 2012 and November 2013.
Stats SA notes that the main categories that contributed to the 0.3 percent increase were services (contributing 3.2 percentage points) and rent (contributing 0.7 of a percentage point).
Meanwhile, the total number of civil judgements recorded for debt decreased by 7.8 percent in the three months ended November 2013 with a decrease of 9.3 percent recorded year-on-year (y/y) in November 2013.
The main categories that influenced the 7.8 percent decrease were civil judgements relating to money lent (contributing -6.2 percentage points), goods sold (contributing -2.6 percentage points) and promissory notes (contributing -2.1 percentage points).