Is an interest rate cut likely in 2018?
At the release of the PayProp Rental Index Annual Review of 2017 it was suggested that the lending rate could fall in 2018. “Economists are talking about a possible rate cut, which will boost not just the economy but also the rental and the housing market,” says Johette Smuts, head of data and analytics at PayProp.
Paul Stevens, CEO of Just Property, ventures his view on the possibility. Here are his answers...
1. How likely is a rate cut in your opinion?
Given the change on the political front, I do think that a large degree of confidence has been restored. While there are still many uncertainties, this sense of hope will slowly start to affect our economic situation. We have already seen the rand strengthen over the past weeks, and at the time of writing it is currently trading at the lowest it’s been for a couple of years.
Estate agents and technology: A beneficial relationship
Over the last decade or so, the real estate industry has been inundated with tech startups, and yet the vast majority of homes, worldwide, are still sold under the guiding hand of a professional estate agent. Despite the increasing availability of agent-free sales platforms, it seems the general public is reluctant to bid farewell to the human touch, but does this mean technology has no place in the industry at all?
“This is definitely not the case, I believe technology can make the industry stronger and more effective by allowing agents to focus on their most valuable - and impossible to replicate - skills,” says Schalk van der Merwe of Rawson property group.
“Technology is seldom intended to replace humans, and those platforms that attempt to do so in property almost invariably fail. Tech tools that enable us to be faster, more efficient, and better informed, on the other hand, are already changing the face of the property industry as we know it.”
Invest in off-plan property before 1 April to save on VAT
With an economy set to experience more growth than in recent years thanks to a change in political leaders who understand the importance of encouraging investment and stimulating economic development, the time is ripe for savvy property investors to make the most of potential capital growth.
This is according to Chris Renecle, MD of Renprop, who says that even though the 2018 Budget Speech delivered by Finance Minister Malusi Gigaba earlier this week outlined some tax changes that will make the general cost of living and off-plan property investment more expensive due to the increase in VAT from 14% to 15%, investors who purchase residential property that is subject to VAT before 1 April 2018 stand to save more and gain more.
How to navigate a spontaneous offer on your home
While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home?
“In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
He says there are areas in the country, such as the Western Cape, that continue to see an influx of buyers looking for property.
“However, the inventory of homes that are currently on the market do not meet the demand and often buyers have a specific idea of the home they want. If they don’t find what they are looking for among what is available, we could see more buyers attempting to purchase homes that are not on the market,” says Goslett.