How to get finance for commercial property
Investors who purchase commercial or industrial property will almost invariably need to approach their bank for commercial property finance. Even “cash buyers” tend to use banks to enhance their returns by adding an element of gearing according to Andre Theron, a director at Baker Street Properties in Cape Town specialising in commercial property and investment sales, who says by the very nature of commercial property, the capital values involved are generally much larger than for residential property.
Theron spent some 30 years working in commercial property finance at some of South Africa’s leading commercial and private banks prior to joining Baker Street Properties.
Double-digit property price growth for May
Despite slow economic growth, positive property market and home loan lending conditions continue to prevail in South Africa, according to bond originator ooba’s May property indicators. The Average Purchase Price increased in May by 13.3% to R1 072 615, says Rhys Dyer, ooba CEO, and this is the second consecutive month that the oobarometer has recorded double-digit year-on-year house price growth.
The oobarometer also shows sustained year-on-year growth in the Average Purchase Price for First-Time Buyers, with an 8.6% rise to R796 261.
Dyer says six months ago, first-time buyers accounted for 56% of applications made to ooba, but this ratio dropped to 51% in May, indicating a greater mix of higher value second-time buying activity in the market.
Agreement to fast track housing delivery in E Cape
Human Settlements Minister, Lindiwe Sisulu, will on Tuesday sign a service level agreement with the Eastern Cape Provincial Government to fast track housing delivery in Port Elizabeth. Minister Sisulu will sign the agreement with MEC for Human Settlements, Helen Sauls-August, and Nelson Mandela Metropolitan Municipality Mayor Danny Jordaan.
The signing ceremony will be preceded by a two-day workshop for contractors at the Nelson Mandela Metropolitan Municipality. This follows an undertaking by Minister Sisulu at a meeting held with the sector earlier this month.
Two Cape Town ST property management companies join
Two of Cape Town’s sectional title property management companies, Sandak-Lewin Property Trust and J & S Penkin cc, will be amalgamating, strengthening Sandak-Lewin Property Trust’s position as a sectional title property management company in the Western Cape. This is according to David Rebe, CEO of Sandak-Lewin Property Trust, who says they will have a combined workforce of more than 60 staff members, who will be responsible for the management of approximately 500 sectional title buildings in Cape Town and neighbouring areas in the Western Cape.
Rebe says that the amalgamation will strengthen the company’s resources and enhance their ability to serve clients across the Western Cape.
Rawson Auction Gauteng pioneers 'bid with bond'
The Rawson Auctions Gauteng franchise has introduced a system, which is thought to be a first in South Africa, whereby certain bidders are able to make offers on homes at auction subject to them getting bond finance according to Rob Whiteley the franchisee for Rawson Auctions Gauteng, who says traditionally, bidders at auction have had to pay cash for property with no suspensive condition in the agreement for finance.
“However, we have discovered that many potential auction attendees don’t have ready cash, maybe it’s invested elsewhere, but would certainly qualify for a bond and wish to buy a home at auction.”
He says in the middle and upper residential home market today there are large numbers of “end user” buyer, someone who wants to live in the property rather than rent out.
Can you make money 'flipping' property?
Economists are predicting interest rate hikes, and it seems that it has become even more expensive to build your own home. With these market conditions prevailing, is it still possible for South Africans to make money "flipping" property? If done correctly, flipping a home can deliver excellent yield, however, it can also end up costing you more than you make. So how should you proceed? According to Carol Reynolds, Pam Golding Properties area principal in Durban, Durban North and La Lucia, flipping homes can work well, depending on the area and the buying price. She says it works best with professionals who are in the trade, for example builders who are able to build at cost to realise greater profits, architects who are able to save on the cost of plans or even real estate agents who are knowledgeable about the market and know a good buy when they see one.
Selling your home? FICA documents you need
Properties in the northern suburbs of Johannesburg are taking, on average, between six and 11 weeks to sell in the current market, provided they are priced correctly. However, there are some stumbling blocks that are holding up the listing of available property stock according to Debbie Justus-Ferns, divisional manager of Renprop Residential Resales, who says the biggest stumbling block is resistance from sellers when it comes to providing the required Financial Intelligence Centre Act (FICA) documentation before a property can be listed on the market.
“The limited supply of property in northern Johannesburg is driving demand, and the market is currently buoyant. This is evidenced by the fact that properties priced below R1.2 million are most often selling within a matter of days,” she says.
Building vs buying a home: what is cheapest?
For many South Africans it’s a dream come to true to design and build their own homes to meet their individual needs, in a style that best suits them according to Bruce Swain, MD of Leapfrog Property Group, who says unfortunately, the latest data from Absa Home Loans indicates that building a new home is just becoming too expensive, especially during this period of economic uncertainty and rising electricity costs.
“We’re seeing demand for existing housing, especially in the lower end of the market, thus properties under R1.5 million, but new housing developments have become scarcer, save in a few areas, as construction costs soar,” he says.