Don't wait too long, buy property now
According to Tony Clarke, managing director of the Rawson Property Group, the best time to buy property was 20 years ago and now.
Clarke points to several reasons such as the fact that the US economy is steadily recovering slowly and this bodes well for South Africa because, like that of almost all other countries in the world, South Africa’s economy is heavily influenced by the US’s economic performance.
“In the short term, prospects for South Africa may look a little dismal because the current FED tapering period is now in action. This, I believe, will lead to high interest rates in the USA, which will then again attract investment overseas. “ Secondly, he says there is no need to be overly concerned about the possible rises in South Africa’s interest rates.
Registering as an intern estate agent
There are regular inquiries to the Institute of Estate Agents, Western Cape, as to what to do when one wants to register to become an intern agent, whether this is necessary, and what steps to follow once registered to become fully qualified.
This is according to Annette Evans, regional manager for the Institute, who says there are three basic things that need to be done, the first being the actual registration with the Estate Agency Affairs Board, which needs the following:
- The fully completed and signed application form (which can be downloaded);
- A certified copy of a valid ID book;
- A certified copy of a valid passport if not a South African;
- A valid work permit if not a South African;
- The required payment or proof of payment of R529.80;
- A letter of employment signed by the principal of the firm confirming employment of the applicant.
SA property market and estate agents
Established Cape Law firm, Herold Gie Attorneys, who this year celebrate 120 years of legal expertise, recently held an informative property and tax seminar at the Cape Town Hotel School attended by a number of property professionals from across the city.
Presented by Di Seccombe, National Head of Tax Training at audit and advisory firm Mazars, the seminar delivered a broad analysis of the recent 2014/ 2015 Budget Speech, as well as recent legislative and administrative changes that impact the SA property industry and real estate agents in particular.
Seccombe says there had been no great surprises delivered in the latest Budget Speech, as Finance Minister Pravin Gordhan instead appeared to tread a fine line (as well as an ‘election tightrope’) between balancing South Africa’s social demands with the need to prove to ratings agencies such as Moody’s, Fitch and Standard & Poor’s, and thus to international investors, that there is a steady hand on the country’s financial tiller. He ultimately stuck fast to the government’s plan to reduce spending, grow the economy and cut its budget deficit.
Home insurance cover for disasters
Everyone who owns a home, whether it is still bonded or they have already paid it off, should check at least once a year to see that they have enough homeowners insurance (HOC) to cover the total costs of replacing it, if it is destroyed by fire, flood or other disaster.
This is according to Shaun Rademeyer, CEO of SA’s leading mortgage origination group BetterBond, who says if your home is under-insured, as it may well be if it has increased in value since you bought it or if you have made additions and alterations, you could be in for a big financial blow if something untoward happens.
“Taking the example of a home bought 10 years ago for R500 000, this may well have doubled in market value to R1 million now, and will no doubt have an even higher replacement cost due to the fact that building costs have increased substantially in the meanwhile.
Managing agents and debt collection
For some time there has been confusion as to whether managing agents must register with the Council for Debt Collectors and operate a separate trust account under the provisions of the Debt Collectors Act, 114 of 1998 ("the DCA"), in addition to the trust account they must operate under section 32 of the Estate Agency Affairs Act, 112 of 1976 ("the EAAA").
A "debt collector", for the purposes of the DCA is: “A person, other than an attorney or his or her employee or a party to a factoring arrangement, who for reward collects debts owed to another on the latter’s behalf …”. This definition is clearly wide enough to cover the levy collection activities carried out by managing agencies, so it seems that their levy collecting activities are regulated by both the EAAA and the DCA. This gives rise to the impractical situation where a managing agent has a statutory obligation to open trust accounts under both Acts.
After extended negotiations with the Debt Collector's Council, Dr. Gerhard Jooste of the National Association of Managing Agents of South Africa ("NAMA") has reported that the issue has been settled.
Lease agreement: tenant and landlord
Landlords, particularly DIY landlords, tend to use a general lease agreement that they have possibly bought from their stationers. However, what they don’t realise is that they can adjust their lease agreements to fit in with their individual needs.
This is according to Michael Bauer, general manager of IHFM, who says if, for instance, the unit is an apartment where what the tenant does or has in his apartment not only affects him but also those around him, it is not unreasonable to state that no animals are allowed or that smoking inside the unit is not permitted.
It is also usually advisable that the lease states how many people are allowed to live in the unit, it could include their names and possibly even ID numbers. In some cases, it might even be necessary to state that the unit be used only for what it is intended, i.e. a residential unit and no work from home facilities, if it affects the neighbours adversely (for example, noise problems if a person chooses to repair cars in their own garage for a living).
Essential basics for home buyers
The recent interest rate increase, added to the prospect of higher rentals this year, has given many young people who have been sitting on the fence a push to make a decision and buy their own homes now.
This is according to Richard Gray, CEO of the Harcourts Real Estate group, who says they don’t want to risk not being able to qualify for a home loan if interest rates go up any more, and in many areas, rentals have in any case begun to exceed the monthly home loan repayments for equivalent homes.
He says this has led to a flurry of activity in the past three weeks, with many of their offices in popular metro areas reporting a spike in first-time buyers.
However, Gray says such buyers should not throw caution entirely to the wind. There are certain home buying basics that they must keep in mind, including the decision to never overcommit their financial resources, he says.