What you'll need to earn to buy a home in 2050
Anyone involved in real estate will tell you that the best time to buy property is now.
Back in 2011 Werner Scheffer, Customer Relations Manager for Multi Spectrum Property (MSP), says he pointed to this showing that property prices had historically grown at an average rate of 11.25% per annum since 1966, when the average price for a home in South Africa was R9 516.
In 2011, 45 years down the line, Scheffer says the average house price was just over R1 million. He then continued this growth trend to 2050.
Body corporate loans for upgrades can boost ST home values
Although the new Sectional Title Schemes Management Act (STSMA) now makes it compulsory for all schemes to have a substantial reserve fund to cover major maintenance and repair projects on a planned basis, there are many buildings and complexes where there is a need for upgrades right now but the available reserves are still insufficient to cover the cost according to Andrew Shaefer, MD of national property management company Trafalgar, who says the answer for such schemes is a body corporate loan, which provides immediate access to the finance needed for urgent maintenance and capital projects – and enables owners to protect and even improve the value of their units.
“The compulsory reserve funds are going to take several years to build up in many cases – and especially in buildings and complexes where the owners previously voted to keep levies down by dispensing with reserve funding. But values in these schemes will decline if repairs and major maintenance projects are deferred due to lack of funds,” says Shaefer.
Some tough realities ahead for Cape Town's property market
While it is true that the Western Cape continues to be the top performer in the South African residential property market, often far outpacing other provinces such as KwaZulu-Natal and Gauteng, those people dealing in this sector must beware of allowing their expectations to become detached from the realities of today’s situation.
“Encouraged by spectacular price increases of in, some cases, 10% or more per annum, many estate agents continue to talk up and exaggerate the strength of the Cape market,” says Rowan Alexander, Director of the new Brackenfell headquartered company Alexander Swart.
“It is absolutely true that this is still a very good place to buy, and further price increases are likely, however, it has to be recognised that our figures show that from the start of this year, on an annualised basis value rises have been around 10%, in other words 2% to 3% lower than in previous years.”
What flat interest rates mean for SA's property market
The Reserve Bank’s Monetary Policy Committee announced at Thursday’s meeting that the repo rate would remain unchanged at 7%, with the prime lending rate at a stable 10.5%.
This is welcome news for homeowners and the property market which continues at a “fairly balanced pace”, says Samuel Seeff, chairman of the Seeff property group. “A flat interest rate and lower inflation gives more breathing space to consumers and homeowners, and allows buyers to still benefit from a rate saving and get slightly bigger bonds.”
Seeff says although the rand remains volatile, the lower inflation rate is good news while the IMF (International Monetary Fund) also recently upgraded the economic growth rate to 1% for this year, from 0.8%.
All the legal need-to-know about boreholes
Do you need any authority or licence to drill a borehole? Chantelle Gladwin, Partner, and Nonhlanhla Ndhlovu, Candidate Attorney at Schindlers Attorneys, answer this question - and more - on boreholes.
The recent water restrictions have brought into sharp focus how even ‘first world’ cities like Johannesburg are battling to manage their water resources in a sustainable manner. Johannesburg Water SOC Ltd and the City of Johannesburg Metropolitan Municipality (COJ) are accordingly promoting the use of borehole water as an alternative to the conventional municipal supply.
This is done in an effort to alleviate the pressure on municipalities to provide sustainable and quality municipal services to all residents within their jurisdictions. The use of boreholes to supplement, or replace, the conventional municipal supply is thus becoming more common, especially in new developments outside of traditional city limits.
Buying in a new development vs older apartments
One of the many decisions to make when it comes to buying an apartment is deciding between an older, established development and a newly built one.
Broker Manager of RE/MAX Central, Cameron Jansen, says in order to make an informed decision, buyers will need to look at the pros and cons of each option and see what fits into their criteria for purchasing a home.
“Each option has its benefits and setbacks, so buyers will need to assess what makes the most sense to them regarding their current lifestyle needs,” says Jansen.
He says there has been a general softening in the market over the past while, and developers have been dropping their prices quite remarkably to remain competitive.