Property24

Property 24/10 - 62

Swing to smaller homes suggested
Almost 80% of households have an annual income of up to R192k and this means that they fall into the lower-income property-buying market and are in a position to buy affordable homes that cost up to R1,4-million.

According to Absa's senior property analyst Jacques du Toit, smaller, higher-density housing is increasingly in demand in the metropolitan areas where affordability is one of the most important factors influencing the property market.

He says that affordability of housing has improved since 2007/08 in terms of house prices as a percentage of disposable income. However, other factors also play an important role including house price growth, building costs and household income.

Du Toit claims that potential buyers and existing homeowners are becoming more sensitive to the costs of home ownership and their ability to pay the ever-rising costs on a monthly basis.
More...

Buying property - factor in rate hikes
Many buyers are anticipating an interest rate hike next year, says Auction Alliance CEO Rael Levitt, whose company has sold over three billion rand in commercial property this year alone.

Auction Alliance CEO Rael Levitt calculates that for every one million rand of debt, 417 rand a month will be added to the interest charges for each 50-basis-point increase in the prime interest rate.
"It seems that the cycle of low interest rates will probably end early next year, which will significantly impact the pricing dynamic in South Africa. Although higher interest rates are anticipated to put greater pressure on households to meet their commitments, commercial buyers don't appear to be deterred by discussions of potential interest rate hikes in 2012", said Levitt.

Of greater concern, according to Levitt, is that South African households are now paying higher prices for fuel, food and electricity - factors which are contributing to the rising inflation rate, therefore forcing interest rates to escalate.
More...

Nepotism, cronyism limits contractors
Allegations of fronting, corruption and deliberately withholding payments from government departments were among the most severe obstacles that were preventing emerging contractors from developing and expanding their businesses.

This emerged during the Construction Indaba held in Durban yesterday.
According to Musa Mfeka, who was representing contractors that do work for the Department of Public Works, the government lacked the "technical capacity" to develop small, medium and micro-enterprises.

She says that only those companies that do not suffer serious financial constraints are able to develop their businesses.

She accused the government officials in various different departments of cronyism and nepotism which takes place in all government structures, limiting the growth potential of emerging contractors.
More...

Tips for a healthy credit score
When applying for a home loan you need to ensure that your credit record is in good standing in order to increase your chances of a successful application.

Ensure your credit record is in good standing and you will increase your chances of a successful bond application.

According to the Credit Bureau Monitor's 2010 4th quarter report only 53.3% (9.90 million) of the 18.51 million credit-active consumers in South Africa were classified as in good standing. The report also reveals that the number of consumers with impaired records increased to 8.61 million during the last quarter of 2010. This indicates a deterioration in the credit records of 120 000 consumers quarter-on-quarter and 426 000 year-on-year.

When providing credit to consumers, says Kay Geldenhuys, Property Finance Processing Manager atbond originatorooba, banks look to ensure that their investment in you is safe. "The riskier the investment, the less likely that banks will approve financing for a home loan."
More...

EAAB accused of misusing funds
Embittered estate agent, Wendy Machanik has accused the Estate Agency Affairs Board (EAAB) of using money from the fidelity fund to pay staff salaries and other expenses, while keeping interest on money that had been lodged with it.

The EAAB has dismissed the allegations.

Yesterday Machanik and her former financial adviser Bruce Bernstein appeared in the Specialised Commercial Crime Court on charges of committing fraud of R28-million.

She filed a 600-page document in court in which she accuses the EAAB of committing the same crime that she has been charged with. According to her lawyer, Cyril Ziman the document contained "very serious allegations" against the EAAB.
More...

Cape Town property market stronger
There has been sustained improvement in market activity across all price ranges in the Cape Town residential property market during April, according to Pam Golding Properties.

First National Bank's home buying estate agent survey for the first quarter of 2011 shows that there was a mild strengthening in residential demand, due to summer generally being a seasonally stronger period, and with the Reserve Bank resuming interest rate cutting in September and November.

Pam Golding Properties area manager Basil Moraitis says the Atlantic seaboard was among the top-performing areas in the region. According to Moraitis, sales have been strong in sectional titles since the beginning of the year, but April showed a marked improvement in the housing market.
More...

Property prices past and present
I have no doubt that property represents a fantastic long-term investment that almost every family in this country should be able to enjoy. The problem is that I doubt if we will ever create the kind of affordability in property prices that is needed to transform such a dream into a reality.

The sad truth of the matter is that we will not create the wealth to hand over title deeds to every family in the country and we can rest assured that property rentals (rather than ownership) will increasingly become the norm in South Africa.

I was thinking about the affordability of homes and reflecting on how much the property costs have changed over the years. For instance, my grandfather bought a home for my mother in 1956. The modest home had three bedrooms, a single bathroom, a lounge, dining room and kitchen and was situated in a quaint little suburb of Eastwood in Arcadia, Pretoria.
The house cost £3 000 (about R6k at the time) and the bond repayments were about £9 a month (or R18). My mother was earning £45 a month. Today the house is worth about R1,5-million and the bond repayment on that amount would be around R15k.
More...

 


 

Leave a comment:

Security Picture (click to change)
Word shown in picture:
advert
menu close

Search Articles