Property 24/10 - 315

Office rentals in key nodes still offer exciting potential
The weaker economic outlook continues to add pressure on office rentals, but JSE-listed diversified real estate investment trust Redefine Properties (JSE: RDF) says a well located office block with the right offering “should let”.

“It is unlikely the current economic conditions are going to change any time soon and this means the outlook for the office rental market remains gloomy. Secondary properties in particular remain under significant pressure to retain and gain tenants. But this should not mean there is no opportunity in this office space either,” says Redefine’s chief operating officer, David Rice.

Redefine’s strategy three years ago to improve the profile of its office portfolio by acquiring modern properties in better nodes, redeveloping and upgrading existing properties places it in a stronger position today.

Fuel price decrease will impact rental property market
The drop in fuel prices set to happen this coming Wednesday is a welcome relief for many cash-strapped consumers and businesses.

Richard Gray, Harcourts Africa Chief Executive Officer, says fuel price decreases translate into a reduction in transport costs, which means the price of household expenses are also reduced - such as food and transport costs. Gray says the same applies to businesses who are affected by high transport costs - they are set to experience an ease in expenses across an array of categories.

“The for sale property market is not usually susceptible to short-term changes like fuel price increases and decreases, however the rental property market might be more vulnerable to these fluctuations,” he says.

Property Q&A: Replacement vs market value
What is the difference between property ‘replacement value’ and ‘market value’?

Replacement value
This is the current cost to replace a building, i.e. to reinstate a property to its original state if completely destroyed.

It excludes the value of the vacant land itself. The replacement value is usually determined by adding the estimated cost to replace the buildings (contract price), professional fees and demolition costs, plus VAT.

Nine reasons to use a mortgage originator
If there was an expert willing to build you a home for free, would you refuse the help and do it yourself? Probably not - and the same logic should be applied when it comes to securing the finance to buy a home.

Ria Venter, Gauteng Regional Manager for Rawson Finance, says banks all have different home loan credit criteria, deposit stipulations, documentation requirements and response times, so applying for a home loan on your own can be a nightmare.

“But if you apply through a reputable mortgage originator, you will have access to a home finance expert who is not only familiar with what each bank requires, but also with all the different mortgage products or packages currently on offer and the applicable interest rates,” says Venter.

Homeowners - save money on insurance premiums
As consumers continue to face the ever increasing cost of living, along with the possibility of further interest hikes before the end of the year, many homeowners may be reassessing their financial situation and looking at ways to save money and cut down on costs.

This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says one of the ways in which homeowners can save money is by taking a look at their current home insurance policies and possibly changing their cover.

“While insurance is a necessity for homeowners, this does not mean that it has to be a financially draining burden. Homeowners should shop around and see what options are available to them from various insurance providers,” says Goslett.

He says comparing various quotes from an array of insurance companies will give homeowners insight into the options available to them, and will help them choose the best cover for the best possible price.

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