Property 24/10 - 238

SA house price growth in 2015
South African house price growth is expected to remain in “the high single digits” in 2015, allowing property investors to beat inflation, even as the central bank continues to raise borrowing costs in an effort to quell rising prices, according to Standard Bank.

House price growth averaged 7% in 2014 with marginal real price growth, thanks to a combination of a shortage of housing stock in sought-after areas and a growing appetite among banks to extend mortgages to consumers, says Steven Barker, Head of Home Loans at Standard Bank. This has helped cushion the effects of rising interest rates, accelerating inflation and constrained economic growth on consumer appetite for purchasing ‘big ticket’ items.

“We think we’ll continue to see real house price growth," he says. “While there are pockets of the market in sought-after areas within Johannesburg, Cape Town and Durban – where we are seeing growth in the mid-teens, average growth across all segments is likely to remain in the high single digits this year.”

Rising rentals make homeownership viable
Many factors have led to a noticeable revival in the average South African’s confidence and willingness to invest in property.

This is according to Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, who says that perhaps the greatest of these has been the phenomenal increase in rentals, which, in urban areas have often been above 10% year-on-year and in some cases have even begun to approach 20%.

Van Alphen says tenants on R8 000 to R9 000 monthly rentals, for example, are now saying to themselves that the same outlay could provide them with an R800 000 to R900 000 bond, provided they can find a deposit of R80 000. He says under those circumstances, it becomes illogical, almost irresponsible, not to opt for homeownership.

Load shedding impacts property sector
The South African Property Owners Association (SAPOA) is calling on South Africa’s commercial property owners to partner and work with Eskom in light of the current electricity supply constraints in the country.

This is according to Neil Gopal, Chief Executive Officer of SAPOA, who says while load shedding negatively impacted overall business production for several months in 2014, further load shedding is expected to continue in 2015, with the property sector, particularly retail, set to be affected.

At the end of last year, SAPOA urged Eskom to reassess its load shedding schedules in light of the harmful impact the power outages had on retailers during the valuable peak festive season trading times.

SAPOA is the official voice of the South African commercial property sector, which makes a significant contribution to the country’s economy. Its members control about 90% of all commercial property, with assets estimated at more than R400 billion in value. This includes the owners and managers of almost of all South Africa’s malls and shopping centres.

Is your home not selling? Try this
If and when a home is brought to the market but does not sell, the owner and the estate agent are quite likely to start looking for reasons - and will no doubt come up with three or four that appear to explain the lack of success.

Although many factors can be considered, says Tony Clarke, Managing Director of the Rawson Property Group, the most likely culprit is usually the price. He says this point also tends to be overlooked often.

“The plain truth is that virtually any home will sell if it is correctly priced.”

If the price makes allowance for the negative factors which the estate agent has identified and the price is in line with the achieved sale prices of other homes in the area, there is no reason why it should 'stick' on the market, he says.

New law around home inspections
The imminent publication of the draft Property Practitioner’s Bill (PPB) is a game changer for the small but fast-growing South African home inspection industry.

The PPB is expected to give a massive boost to the local home inspection industry and, in doing so, create up to 10 000 new jobs in the private and public sectors.

Bryan Chaplog CEO of the Estate Agency Affairs Board (EAAB) has announced that home inspectors will be regulated under the new Property Practitioner’s Regulatory Authority (PPRA), which is to replace the EAAB. Estate agents will also be regulated by the PPRA.

Consumer rights of the home buying public will also be effectively protected by the PPRA. Sections of the Consumer Protection Act dealing with property sales will be repealed, and protection for property consumers will be provided by the PPRA. This will be achieved by requiring estate agents to recommend a home inspection to all prospective home buyers. By advising buyers to get a home inspection, most of the uncertainty of buying a used home voetstoots (as is) will be removed.

Step-by-step guide to buying property
It’s a new year, you have new goals, and homeownership is one of them. So now what?

Debbie Justus-Ferns, divisional manager of Renprop Residential Resales, says those who are looking to buy property in the year ahead should ensure they are well-prepared in order to ensure a smooth transaction.

She says buying a property is a big decision for anyone to make and the process can be stressful, even though it is exciting. She says buyers should therefore make sure that they are adequately prepared before they start house hunting.

Justus-Ferns provides buyers with a step-by-step overview to help them prepare for the biggest financial decision they are likely to make in their lifetimes:

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