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Property 24/10 - 65

23 June 2011

Inflation up but interest rates steady
The consumer inflation rate was higher than predicted, rising to 4,6% in May and up from 4,2% in April but economists have not yet revised predictions on a hike in interest rates by the Monetary Policy Committee of the South African Reserve Bank.

SARB’s repo rate was cut to just 5,5% in November last year, dropping interest rates for consumers to a record low of 9%. A spike in interest rates will place considerable pressure on property owners, as many of them try to downscale their costs in orderto meet their monthly commitments.

Elna Moolman, an economist at BJM Renaissance, says that the latest data is unlikely to mean that the interest rates will start to rise earlier than predicted even though the SARB has revised its estimates for higher inflation over the coming months.
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Biggest fraud ever for EAAB
Constantia Sectional Title Managers – currently under curatorship – has allegedly misappropriated a huge amount of money from the 450 bodies corporate that it managed and the curators say missing money could amount to anything between R20-million and R40-million.

Quentin Brown – who ran the operation until an interdict was obtained by the Estate Agency Affairs Board to prevent him from doing so – has been provisionally sequestrated and the Hawks has now launched a criminal investigation into the affairs of CSTM.

According to the curators about R10-million was collected by CSTM from unit owners for the payment of municipal rates, taxes and services but the company is believed to not have paid this money over to the local councils, leaving unit owners high and dry and deeply indebted.
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Distressed sales led by speculators
Johannesburg - Across SA, investors are moving distressed homes through the system far faster than lenders, according to Auction Alliance CEO Rael Levitt. 

In areas such as Cape Town, Pretoria and Johannesburg's West Rand and East Rand, sale-in-execution speculators are offloading properties faster than ever. 

Levitt says that this is partially due to lower home prices and in part due to "their ability to find quality end-user purchasers who don't have the time, inclination nor immediate cash flow to attend sale in execution auctions". 

For example, in Kempton Park, investor-bought houses sell in 47 days while comparable houses move in 108 days when taken over by banks. Levitt credits the time difference with the fact that, "speculator investors have become better at turning a distressed property into a marketable property that attracts buyer interest".
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Your bond is the best place to save
South Africans are always being urged to save more, but with interest rates at the current low levels, there are not as many attractive savings options. 

However, says Rudi Botha, CEO of mortgage originator Betterbond, homeowners are lucky in that they always have the option of saving by using any spare cash to reduce the capital portion of their home loan – and achieving really worthwhile payoffs for doing so. 

“By reducing the capital portion of your home loan, you will also reduce the interest you must pay every month and the overall repayment period – in other words, you will invoke the power of compound interest in your favour,” he says. 

“For example, on a R1m bond if you pay R200 extra a month it will cut 13 months off the 20-year repayment period and save you R79 000 worth of interest – not a bad return on the R45 400 you will have ‘invested’.
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Jhb inner city confidence rising?
The city nodes of Johannesburg’s central business district, Braamfontein and Newtown, continue to rise as more and more investors are putting money into the redevelopment of these regions according to property management company Broll.

According to the company’s area specialist and commercial broker Keke Khojane there has been renewed interest and huge investment in these areas where old buildings are being revamped and office accommodation is being transformed into new affordable residential units.

Khojane says that in the Urban Development Zone that covers an area of 18 square kilometres, a number of projects are nearing completion while new developments are underway. Investors in the zone receive tax incentives to invest in the city.
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Land grab pipe dream
So Julius Malema wants the ANC to grab as much land as possible from white owners so that it can be redistributed to black farmers. He also wants the constitution to be changed so that there is no payment made for the land that is grabbed from white farmers.

At least this is what Malema has been telling delegates attending the ANC Youth League’s annual conference at Gallagher Estate in Midrand.

If Malema is serious then the implications for South Africa are horrendous and will lead to droves of people leaving the country, investment from foreign sources drying up entirely and South Africa rapidly collapsing into a basket-case.

It will do so in exactly the same way as Zimbabwe has.
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What makes a good kitchen?
Layout and Design

 The layout and design of your kitchen impacts on functionality and how well you are able to move around within the space. Your kitchen designer will ask plenty of questions about how you plan to use the room; how you use your kitchen, what types of meals you cook and what your likes and dislikes are to ensure that the final design meets your needs.

Ask yourself if your kitchen fits the above needs and desires of your cooking lifestyle? If you know the answer then you know exactly where to start…

Work Triangle
Central to the design of a kitchen is the work triangle. This design tool measures the space between the main work centres of the kitchen, namely the sink, oven/hob and refrigerator. Careful placement of these items ensures there is not too much or too little space between each.
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SA has hundreds of bad landlords
South Africa has more than its fair share of bad landlords who are arrogant, inefficient, who refuse to fix problems at their properties and hold onto deposits from tenants claiming that they should pay for normal wear and tear.

This is the view of Rawson Properties’ managing director Tony Clarke who says that the number of delinquent tenants has dropped sharply over the past few years, but there are still many delinquent landlords.

He says that he frequently comes across landlords who refuse to pay for essential maintenance or repairs on a property that they own and they ignore repeated requests from agents and tenants to resolve the problems on their properties.

“Leases often stipulate that the landlord is responsible for repainting and re-carpeting a property when necessary and that they must maintain the electrical circuits, the plumbing and any other fixtures or appliances in the property,” he says.
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