What does SA’s technical recession really mean for buyers and sellers?
What is a technical recession?
In early September, StatsSA announced that South Africa has reached what is considered a technical recession. This is defined as two consecutive quarters of negative economic growth, the likes of which have not been seen since the 2008/2009 global financial crisis.
The indicators of the decline were clear when the Real Gross Domestic Product (RGDP) contracted by 0.7% in the second quarter of this year, following a recently revised 2.6% contraction in the first quarter, says Sandy Walsh, MD at Property.CoZa South Africa.
What are the possible effects?
Negative economic growth causes a knock-on effect filtering into all sectors of consumer behaviour. With a tightening in everyday spending, there is a gradual tipping of the scales of supply and demand. The imbalance in consumer conduct causes inflation. To compensate, interest rates may rise, and businesses may be forced to cut costs by retrenching employees, downsizing and restructuring, says Walsh.
Buyers, don’t start renovations before the transfer goes through
Many home sale agreements provide for the buyers to take occupation after they have been granted a home loan and provided financial ‘guarantees’ to the seller’s attorneys, but they shouldn’t start work on any major renovations or alterations until the transfer of ownership has actually been registered.
This is according to Gerhard Kotzé, MD of the RealNet estate agency group, who says buyers are understandably keen to make a new home their own, and to get the mess and disruption over with if they plan to make significant changes.
Must-knows for the POPI Act and the real estate market
Following the Facebook fiasco earlier this year, many are becoming increasingly paranoid about their personal information - and not without reason. Over the past few years, companies have been mining customers’ personal information freely in order to optimise their marketing efforts. Personal data has effectively become the 21st century’s ‘diamond’. Question is, can you trust your estate agent to keep your diamonds safe?
“Personal information is an integral part of the real estate business. The more an agent knows about a client, the better equipped they are in finding the ideal home that meets the individual needs of that client. Despite the fact that the Protection of Personal Information Act has yet to be wholly implemented, responsible companies will already have to put measures in place to ensure that their clients’ data is lawfully protected,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
How to ensure you get your rental deposit back
Squabbles over security deposits account for a large proportion of the disputes between landlords and their tenants - but could actually be quite easily avoided in most cases according to Chas Everitt national rentals manager, Tobie Fourie.
“The deposit is supposed to protect the landlord against loss of rent if the tenant decides to do a ‘moonlight run’, and against any damage a tenant may do to the property,” says Fourie.
“On the other hand, if you’re a tenant who has always paid the rent on time and has kept the property clean and in good condition, you should be able to count on getting your deposit back at the end of the lease. And, of course, you should not be penalised for any damage done by a previous tenant.”