Buying listed property? Read this
South African listed property delivered exceptional returns over the last 10 years, outperforming both the FTSE/JSE All Share Index (ALSI) and BESA All Bond Index (ALBI), which both had an excellent decade in their own right. With the bar set so high, where to from here for listed property?
Gazing into the future requires us to understand what drove returns over the past decade and then establish how many of these tailwinds will still be evident in the next couple of years, says Harold Strydom, investment analyst at Citadel Wealth Management.
Firstly, however, we need to understand listed property as an asset class.
Owning a house is very different to investing in listed property
For many of us, property is the house we live in and our return is calculated from the purchase price, maintenance and renovations during the years, as well as the eventual selling price.
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Sapoa tackles big property issues
The South African Property Owners’ Association (Sapoa) is taking a proactive and long-term view on tackling key property related challenges in the City of Polokwane.
Municipal relations is a key plank in Sapoa’s mandate from the commercial and industrial property industry, and Sapoa is keenly aware that the effectiveness of municipalities across South Africa requires commitment from both the public and private sectors.
“Although we’re engaged with illegal land uses, illegal trading and economic development initiatives, the legality of the development of the City’s 2014/2015 general valuations roll is arguably our most pressing concern,” says Sapoa regional council chairperson Sumari Ridder.
Legally, municipal rates policies must comply with the Municipal Rates Act 2004. Furthermore, municipal rates policies take effect when the valuation roll is prepared. The valuation roll must accompany the annual budget for the financial year under review.
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Green buildings new online courses
2014 will see a marked increase in the availability and delivery of necessary green building education in South Africa as the Green Building Council South Africa (GBCSA) launches a new online learning system which will play host to a number of new programmes and upgraded existing courses.
The GBCSA will be doing an online re-launch of a number of their existing courses which have been upgraded, reworked and repackaged.
One of which is the Green Star SA Accredited Professional Programme for New Buildings. This AP Programme is the Council’s core educational offering and teaches the background, theory and detail of the application of the Green Star SA Design and As Built rating system for new buildings and major refurbishments.
Other courses to be launched online include two more specialised programs; namely the upgraded Project Certification Workshop and the Simulations and the Submissions Course.
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POPI Act to impact on property sector
The recent gazetting of the Protection of Personal Information Act, which is still to be promulgated, has far reaching implications for the business sector in South Africa.
Passed on 26 November 2013, the Act provides for the constitutional right to privacy while protecting the free-flow of information and advancing the right of access to information. It also regulates the manner in which personal information is processed in line with international standards.
In ensuring the protection of personal information, the Act contains eight key conditions that must be complied with when processing information, namely:
- Accountability
- Processing limitation
- Purpose specification
- Further processing limitation
- Information quality
- Openness
- Security safeguards, and
- Data subject participation.
Should you fix loan interest rate?
The recent increase in the repo rate by 50 basis points was met with surprise, as all indications were that it would stay constant.
Jacques du Toit, property analyst at Absa, says interest rates remain one of the main factors influencing the performance of residential property prices. He says the view shared by most economists that rates would remain unchanged this year and possibly into next year as well, proved to be incorrect when the South African Reserve Bank increased the repo rate by 50 basis points last month. According to Du Toit, interest rate hike tells consumers that the trend forward is gradually upwards, which will have the effect of making investors even more cautious.
Riaan van Deventer, Head of Real Estate at Engel & Völkers Southern Africa says property investors need to be aware at all times of the possibility of further interest rate increases and to adjust their requirements to a price range they can afford. He also stresses the importance of using a reputable real estate company with experienced sales advisors, who would assist both first-time buyers and investors to make a sound investment when buying property.
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4 reasons why banks reject home loans
Publicising the reasons why most people often have their bond applications rejected has helped them greatly improve their chances of getting a bond.
This is according to Mike van Alphen, National Manager of Rawson Finance, who says the simple truth is that a fairly high percentage of those who come to them are unaware of the full criteria on which banks judge their credit position. He says they can help them prequalify, and in many cases, put matters right if they are at first not accepted.
1. He says around 30 percent of all declines from banks come about because the credit bureaux has data showing that those applying have, at some stage, had a court judgement against them. However, it is surprising how often clients are not aware that these matters are recorded.
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Delinquent tenant & can I cut water?
A Property24 reader asks:
I have tenants who've been in the unit I bought for about 5 years and they have gone through good and bad times, but currently are really bad. They refuse to pay any rental increases, they have taken to paying late and now have run up a water bill of R14 000 over 3 months due to a leaking toilet.
They didn't inform me of the leak, it was only after the body corporate called a plumber out to check on the high consumption that I was made aware of it. I got a plumber to fix the problem, but they are not allowing the plumber in to do the work.
I do not feel that the R14 000 should be for me to pay, yet they refuse to pay it. When I give them notice, they ignore it and continue to stay in the property, even after we agree on a leaving date (they have done this twice now).
I would like to cut off the water until such time as the leak gets fixed. Am I allowed to do this?
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