Higher fuel prices, lower GDP and traffic will change home-buying in SA
The combination of the fuel price hike and the sharp decline in SA’s economic growth rate during the first quarter is going to increase urbanisation and intensify the demand for homes close to work, shops and schools.
That’s the word from Rudi Botha, CEO of BetterBond, SA’s biggest bond originator, who says that with agriculture and mining being among the biggest contributors to the drop in GDP growth, there may well be further employment cutbacks in these sectors that will drive more people to leave rural areas and head to bigger towns and cities in search of work.
“This is going to put pressure on the Department of Human Settlements and its private sector partners to deliver more affordable housing in urban areas and on municipalities to fast-track their plans for inner city urban renewal and infrastructure improvements.”
More
High-density developments in SA’s prime suburbs: good or bad?
For the past 15 years there has been a gradual, but consistent, increase in residential density in the central and fringe areas of Sandton and Rosebank. “And it has come about to the dismay of many long-standing homeowners, in and around those areas, who understandably might feel threatened,” says Ronald Ennik, CEO and founder of estate agency, Ennik Estates, which focuses on Johannesburg's prime residential property market.
The draft nodal review policy, which seeks to address "inequality and inefficiency in the City, transforming it into a more equitable, liveable, resilient, efficient and productive urban form", is all but approved.
But the dismay could well be ill-founded, says Ennik.
Following international trends
It has been proved time and time again that society functions better, on all levels, where higher density living exists in an organised way, and Johannesburg is simply following a long-standing international trend, he says.
More
How to build a property portfolio with one bond
Property has long been considered an excellent, stable vehicle for investment. It has a forced-saving aspect to it, and your investment is unlikely to depreciate. Although, if the greenbelt next to your home is declared a wind farm, or is rezoned for industrial use, you might need to look at alternative uses to retain that value. In fact, if you buy carefully and sell at the right time, you’ll probably find you’ve made money.
“Gone are the days when paying the bond of a single property over 20 years was the only smart thing to do,” says Pieter Piek, Sales Manager at Just Property Invest.
Piek explains that if a buyer takes a million-rand, 20-year flexi or access bond, at average current circumstances and interest rates, they could pay the bank +/- R9 800 per month for the full 20-year period and eventually own the property at the end of it.
More
What happens if landlord sells or tenant wants to cancel lease?
If a property is sold when there is a tenant in occupation, the questions often raised concern what happens to the tenant if the landlord sells the property, and what rights the tenant will have with regards to cancelling the lease or enforcing it.
This is according to Sunell Afrika, rentals manager for SAProperty.com, who says in typical situations the clause “huur gaat voor koop” is in force, which means that the lease takes precedence over the sale of the property and the tenant has a right to remain for the full duration of that lease.
The conditions of the existing lease do not fall away, and if it has not been cancelled, both the tenant and the new landlord are bound by these until such time that the lease is renegotiated or expires, she says.
More
Landlords: how to attract and keep high-end tenants
Statistics show that although only about 7% of tenants in South Africa currently rent for more than R15 000 a month, this percentage is growing, and that around 2% already rent for more than R25 000 a month.
This is according to Sunell Afrika, rentals manager for SAProperty.com, who says in typical situations the clause “huur gaat voor koop” is in force, which means that the lease takes precedence over the sale of the property and the tenant has a right to remain for the full duration of that lease.
“Our best estimates are that the actual number of high-end households for landlords to target is around 280 000 and rising,” says Berry Everitt, CEO of the Chas Everitt International property group. “In addition, the latest PayProp figures show that such tenants generally have better credit scores and lower debt-to-income ratios than those who rent for less, as well as higher incomes, and are thus lower-risk tenants.”
However, Everitt says these tenants also tend to spend proportionately more of their income on rent (around 35.5%) than those who are renting in the most popular R5 000 to R7 500 a month bracket (around 30%), and are understandably considerably more exacting in their choice of property.
More
Leave a comment: