Are you a first time buyer? Read this
First-time homebuyers currently account for almost one-third (31 percent) of all home loan grants and this figure is declining, says BetterBond.
Rudi Botha, chief executive officer of BetterBond says these buyers need to work harder and prepare better to get into the property market.
While deposit requirements are considerably lower than a year ago and first-time buyers are buying less expensive homes, he says they have seen a drop in the number of first-time buyer applications in the past year and a drop in the percentage of bond grants to these buyers.
The BetterBond statistics - which represent 25 percent of all residential mortgage bonds being registered in the Deeds Office and include applications from all major banks in South Africa - show that in April, the average percentage of the home purchase price that first-time buyers were required to pay as a deposit was 10.1 percent –less than the 15 percent required a year earlier.
He says the statistics also reveal that the average home purchase price for first-time buyers applying for a home loan in April was R593 468 or 4.8 percent less than the R623 592 average recorded in April 2011
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Are smart homes the next trend?
Living in the era of rapid technological advancement means that consumers have grown accustomed to being able to access vast amounts of information in a short space of time.
Technology that once filled an entire room now fits in the palm of one’s hand and some gaming consoles now have more computing capacity than a space shuttle computer.
So what is next, asks Adrian Goslett, CEO of RE/MAX of Southern Africa.
We have smartphones, iPads, tablets, and some consumers have a smart TV or refrigerator.
Could the next step be a smart home?
With network connections and advancements in technology’s ability to transform our daily lives, it seems that the next trend will be homes that are fully operational through the use of computers.
A smart home will feature an integration of technologies, designed to allow the homeowner to access and control various household appliances and other automated features via a broadband connection.
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E-media, key tool for the property market
Although the older generation quite often buck the trend and often still buy and sell property entirely with the advice of and through their estate agent, the vast majority of Anne Porter Knight Frank’s (APKF) clients now do a preliminary investigation via electronic media.
This is according to APKF’s managing director, Lanice Steward, who says today 75% of their clients have used their iPads, PCs, smartphones or laptops to see what is on the market and to compare prices.
She says this is a trend all the more sophisticated agencies have welcomed because it cuts down on the time they take to introduce clients to the areas and the price ranges that actually suit them. “Much of the vagueness and indecision have now gone out of house selling and buyer recruitment.”
She says the growing use of electronic media has also resulted in buyers being more market canny and less likely to consider bidding above the going rate.
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HOA a must for group housing schemes
It will come as a surprise, to many who live in or are associated with group housing schemes in South Africa today, that there are many such schemes in which the members themselves do not realise that they are or should be bound by a homeowners’ association - which has the right and duty to manage the scheme, control the conduct of its members, charge levies and maintain the common areas.
In many schemes, says Ulrik Strandvik of Gunstons Attorneys, the owners or those living there as tenants are not aware that a homeowners’ association will or should have been set up at the outset – this is a legal requirement.
They may also not be aware that the developer will have had to draw up a homeowners’ constitution before handing over the scheme to them and this is operative and binding even if they have never heard of it.
“Quite often the developers simply fail to tell them that they do in fact have such a constitution and must organise meetings to decide how the scheme will be run.”
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How estate agents' commission works
The Institute of Estate Agents used to publish a recommended tariff, which was reviewed from time to time and was unfortunately outlawed by the Competition Commission as being anti-competitive many years ago.
This is according to Jan le Roux, CEO of Leapfrog Property Group, who says one can only wonder why the Commission followed this line because it was a recommendation only and practice has shown that tariffs were negotiated all the time – mostly downwards.
After the nullification of the recommended tariff (at the time 7%), it remained very negotiable for upmarket properties, but actually went sky high for the lower end in some cases, he says.
The recommended tariff, much as it was not enforceable by anyone, did at least give consumers, across the market, an indication of what is considered reasonable.
Le Roux is of the opinion that 7% is a fair and equitable amount but does concede that some sort of sliding scale should apply, and most often does, on more expensive properties. There is a case to be made, give or take the same amount of work is required per transaction, that a minimum fee might apply.
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Liability for tenant's council bills
A Constitutional Court judgement made in 2004, Mkontwana v Nelson Mandela Municipality, has had ramifications in the commercial property sector.
The judgement has placed further risk on the shoulders of landlords, says Jason Lee, the Rawson Property Group’s commercial property national head.
Lee explains that in the case Mkontwana v Nelson Mandela Municipality, the court held that the landlord was responsible for all municipality service debts run up by his tenant and this principle is now adhered to countrywide.
This effectively makes a third party (the landlord) responsible for the debts of a main contracting player (the tenant) even though he (the landlord) did not incur the debt himself, he says.
“In my view, this whole situation needs reviewing, especially in the current scenario where tenants are increasingly finding it difficult to pay both their rentals and their utilities accounts.”
Tenants know only too well that they can walk away from a lease when it expires without the municipality having any way of extracting payment from them.
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DIY Landlords beware of these pitfalls
As buy-to-let residential property investments become popular again, many investors lack experience in property management and resort to DIY tactics.
According to Lanice Steward, managing director of the Cape estate agency Anne Porter Knight Frank, some property investors enter the buy-to-let market brimming with confidence that they can go the DIY route, finding and managing a tenant without the ‘extra’ or ‘unnecessary’ expense of employing a rental agent.
“I am not saying that such landlords will inevitably learn a lesson the hard way in these matters because experience shows that some do succeed all along the line.”
Nevertheless, she says it is regrettably true that many, perhaps the majority, make fundamental mistakes which would never entrap a trained professional.
Here are a few mistakes DIY landlords should avoid:
1. Never waive the rental deposit
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Opportunities for property management
South Africa commercial property managers report an increase in business with opportunities for growth still available in the commercial sector.
According to Johann Boshoff, director, property management for JHI Properties, they are seeing positive signs, which include increasing enquiries for the uptake of space.
He says corporate organisations are indicating their willingness to make decisions in regard to relocation – including moves to larger premises and they also perceive new development opportunities in the market.
Boshoff explains that tough trading conditions and rising operating costs has led to larger organisations incorporating all their business units in one convenient location rather than spread across areas or even regions.
JHI Properties in the Western Cape says it will take advantage of these opportunities as the commercial property market in the province is reflecting positive growth.
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