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Tito's property crash "cushion"
Realestateweb.co.za - South Africa

Interest rates remain on hold, but property market has "yet to bottom", warns bank.

SA Reserve Bank governor Tito Mboweni's announcement on Thursday that the key monetary policy interest rate will be left where it is for now, at 12%, is good news for debt-burdened consumers in general.

But those businesses relying on renewed enthusiasm for consumer spending - particularly in the residential real estate sector - shouldn't break out the Champagne just yet.

Property prices and levels of activity in the residential market are expected to get worse and are unlikely to pick up until the middle part of next year, is the prediction from Absa's senior property analyst Jacques du Toit.

Shortly after Mboweni's announcement, Du Toit issued a note cautioning that the "residential market has yet to bottom".

He said the "severe financial strain" caused by surging inflation, higher interest rates and declining real household disposable income growth would continue to negatively influence the affordability of housing. That in turn means less demand for housing.

Buyers move to the 'more established' estate agents
BusinessDay - South Africa
As sales drop, bigger agencies can economise and ride out the slump

With residential property sales plummeting, South African real estate agencies are preparing to batten the hatches for what could prove to be a stormy next 12 months. Larger real estate agency groups are also finding they are increasing market share as consumers prefer more established brands in these difficult times.

Andrew Golding, CE of Pam Golding Properties, says transaction volumes have dropped by at least 30% - and in some cases 50% - across the real estate industry.
Business Day

Tread carefully when purchasing in a "legal entity"
RodneyHayter.com - South Africa
Buying a property as an individual is the simplest and cheapest method but a growing number are opting to purchase a property in other legal entities due to the greater protection offered.

But tread carefully, advises Heather Briggs of Shepstone & Wylie Attorneys and consider the pro's and cons, particularly involving tax, of each entity before deciding which best suits your needs.

Buying in your personal capacity involves a simple registration process and negates the added administration of operating a legal entity, which may involve auditors, financial statements and resolutions, says Briggs. Another bonus is that transfer duty is charged at a lower rate. The downside, however, is that the property will form part of the individual's estate and will be available to creditors in the event of insolvency.

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