SA residential property market trends
More than 70 percent of the home loans currently being granted are for amounts under R1 million, according to the latest statistics from BetterBond Home Loans, which accounts for more than 25 percent of all residential mortgage bonds being registered in the Deeds Office.
Another 26 percent of the loans being granted are in the R1 million to R2.5 million range, leaving only about 3 percent in the over R2.5 million category, says chief executive officer Shaun Rademeyer.
Buyers and prices
Rademeyer points out that despite all the attention recently given to the increasing sales of multimillion-rand trophy homes, the real backbone of the housing market at the moment is the lower end, where every month sees many thousands of people making offers to purchase and applying for home loans.
Buy property close to work and save
The high cost of petrol does not only diminish consumer bank balances but also influences where people choose to buy a home, says David de Waal, chief executive officer of Steeple Estate Agents.
He says ongoing increases in petrol price reduce the allure of areas that are far away from employment districts or amenities while nearer suburbs become more popular. “The rental gradient (the concept that property prices decrease as the average commuting time/distance increases) is said to become more pronounced as transport costs increase.”
De Waal explains that property within the “concrete highway” that ring Johannesburg already sell at a premium and they expect that premium to increase further this year.
Flats record strong rental growth
With an overall rental index increase of 8.01 percent for the year, residential rentals increased in every major city in the country, but dipped well below the standard 10 percent annual escalations of the past, according to the Trafalgar Residential Rental Index.
Johannesburg leads the pack with a 9.74 percent average annual increase up to January 2014, followed by Port Elizabeth at 8.63 percent in stark contrast to sister-city East London, which lagged with the lowest rental growth in the country at 5.78 percent. The index is based on a comparison of the rentals for unfurnished two bedroom flats in Trafalgar’s residential letting portfolio, which comprises over 10 000 rental units countrywide.
“It would appear the days of standard 10 percent rental increases are now past with soaring utility increases imposing significant pressure on tenants and constraining affordable rental increases,” comments Andrew Schaefer, managing director of Trafalgar.
Sold home and retrenched - can I cancel?
A Property24 reader asks:
I signed an offer to purchase from a buyer but two weeks down the line I was retrenched, so I called the buyer to discuss with him that I wished to cancel the deal because I won't be able to get a bond and that I would rather take my pension payout and use it to settle my existing bond, and that I'm prepared to cover his legal fees. There was no agent involved, I advertised privately. I would like to know if I'm allowed to do this and what legal action can be taken against me for breach of contract. This all happened one month ago. Jaco Rademeyer, from Jaco Rademeyer Estates, responds:
The contract is perfecta, or in other words complete in all forms.
Illegal building can cost buyers
Residential property buyers are always being advised to thoroughly inspect the properties on which they hope to make an offer.
This is according to Bill Rawson, Chairman of the Rawson Property Group, who says, however, it has to be admitted that this is not an easy task. He says in the United Kingdom, it is possible to get hold of a recent inspector’s report on a building, but in South Africa, building law enforcement officers are few and far between.
Nevertheless, he says they do have municipal inspectors, who can be asked to come to the site free of charge as they get paid by the municipality.
This may indeed be a challenge to organise in some of our often poorly run cities, but if you suspect illegal renovations have been done it's worth going this route. But to save time first ask for a copy of the latest building plans.
How do we split joint property assets?
A Property24 reader asks:
My partner and I are separating. We were never married and so have no legal documents to deal with ownership, assets etc. In our time together we bought a number of properties, some in my name, one in his. In order to divide up our assets fairly it is necessary that he take ownership of one of the properties that is currently in my name. What is the best way to transfer ownership in this case?
Denoon Sampson, a director of DenoonSampson Ndlovu Inc. Conveyancing Attorneys, advises:
How would he take ownership of a property currently in her name?
The answer is that transfer of ownership into his name will have to be registered in the Deeds Office. There is no other option. The process will require a disposal agreement to transfer, repaying any existing mortgage bond, the payment of legal fees, transfer duty and advance levies and/or rates and taxes. A conveyancer will have to control and manage the process.
Communities report housing corruption
Human Settlements Minister Connie September has urged communities to report illegal activities in the development of housing.
Addressing the Housing Summit in Clanwilliam in the Cederberg Municipality in Cape Town, the minister said housing beneficiaries must be vigilant and speak out “whenever they feel there is something wrong, irrespective of whether this is committed by the authorities”.
“When you see that something illegal is happening in your community or neighbourhood, please report that to the police or to the street committee,” she said.