Rental demand set to rise in 2016 as property-buying declines
Trafalgar - South Africa
Landlords can look forward rising rental demand in 2016, and this may well increase the number of investors who see good opportunities in buying homes to let.
That's the word from Andrew Schaefer of property management company Trafalgar, who says the demand for rental units is expected to rise in the coming months, thanks to higher interest rates and greater economic uncertainty at home and abroad.
"Rising rates always put a strain on affordability and make it more difficult for prospective buyers to qualify for home loans, especially if they are first-timers who also need to save large amounts of cash to pay a deposit and transfer costs. Many such consumers are thus likely to remain in rental accommodation over the next two years instead of buying their own homes.
What's in store for real estate in 2016
Rawson - South Africa
Amid extreme stock market volatility, political upheavals and plummeting oil and commodity prices, private investors big and small are finding a safe haven in property – and that bodes well for the real estate market in 2016.
“At the moment, investors in SA and all around the world are avidly seeking out ‘copper-bottom’ assets that are more likely to hold their value in the face of major social changes or economic shocks,” says Bill Rawson, Chairman of the Rawson Property Group, “and for many, property is a known quantity, a familiar and reliable place to put your money when everything else is in flux."
“After all, although real estate prices may grow more slowly in some years than in others, they have only declined and/or failed to keep up with inflation twice in the past 30 years. And in SA, we have the added advantage, currently, of the low rand exchange rate that makes residential property here a very attractive proposition for foreign investors and developers.”
"When it comes to the much bigger buy-to-own category, he says, SA is also in a better position than many other countries due to its youthful population, high rate of new household formation and a steady increase in the number of people entering the middle class, all of which serve to underpin demand.”
Lawyers need to keep up to date with technology, expert warns
Australasian Lawyer - Australia
Industry disruption by technology is nothing new, but are practitioners placing enough focus on keeping up to date with what’s emerging?
GlobalX Legal Solutions CEO Peter Maloney doesn’t think so.
Operators in small and medium sized firms in particular are often too concerned with working in the firm rather than working on it by reviewing existing infrastructure and processes, Maloney said.
“Enterprise systems have also formerly been very expensive and complex to implement, contributing to a misconception that these solutions remain unattainable to businesses with smaller budgets; fortunately however, cloud based and software as a service models are making high quality software tools more accessible to small business than ever before,” he told Australasian Lawyer
Property Barometer - House price indices by size
FNB - South Africa
Increasingly, in the residential property market, size counts, but it is smaller that is increasingly proving to be better. This has much to do with the sharply rising costs related to homes, along with a more financially constrained Household Sector since the end of last decade’s boom years
In the near term, with the economy weakening and interest rates expected to rise further, the financial constraints on the Household Sector may become still more significant. That could play into the hands of the smaller-sized home segment to an extent, provided the country is not hit by a severe economic downturn, as more households are forced to “cut their coat according to the cloth”.
However, this only works to a point. Lower income households are more financially “fragile than higher income ones, and should the economic or interest rate “shocks” become too severe, they would suffer to a greater degree, and the small-sized home segment could then end up performing worst of the 3 due to financial stress in this market. This was the case around 2008/9 in that short but sharp recession, where interest rates peaked at 15.5% Prime Rate, leading to severe financial pain for a highly indebted household sector.
For the time being, though, “Smaller is Better” it appears.