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More property buyers looking for ‘homes for life’

Written on August 2, 2010 by admin in Content

More property buyers looking for ‘homes for life’
http://iolproperty.co.za/roller/news/entry/more_property_buyers_looking_for

Many young couples are now seeking to buy homes that will provide room for their families to grow without having to move – and without having to pay transfer duty, bond registration, legal fees and other moving costs over and over again.
Tjaart van der Walt, CEO of the RealNet estate agency group, says: “There is definitely a school of thought now that says homeowners should not move too often but rather stay put, pay off their home loans and build up their equity, and in keeping with this, family-size homes in older suburbs are regaining popularity.
“We are seeing many young executives and professionals who might previously have preferred a lock-up-and-go apartment in the city or a home in a country estate now looking instead for fixer-upper houses in established areas, even if these are a bit big for their current needs.”

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Weak inflation gives ammunition for rate cut

Written on July 29, 2010 by admin in Content

Weak inflation gives ammunition for rate cut
http://www.busrep.co.za/index.php?from=rss_Business Report&fArticleId=5575677

Positive news on the inflation front has provided ammunition for those who believe the Reserve Bank should cut its repo rate from its present level of 6.5 percent. Statistics SA reported yesterday that consumer inflation came in at an annual 4.2 percent in June, down from 4.6 percent in May and better than the 4.5 percent median estimate of 21 economists polled by Bloomberg.

Ian Cruickshanks, the head of strategic research at Nedbank Capital, said that after the data was released the money market started betting on a 60 percent chance of another 50 basis point cut in the Reserve Bank’s repo rate. Expectations of another cut were reflected in forward rate agreements, contracts that run for three months starting some time in the future.

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Crunch time for property scheme

Written on July 26, 2010 by admin in Content

Crunch time for property scheme:
http://www.citypress.co.za/SouthAfrica/News/Crunch-time-for-property-scheme-20100725

The Reserve Bank is set to decide whether it will force South Africa’s largest property syndication scheme to repay billions of rands to thousands of investors.
Financial experts feared that investors – many of them pensioners – were in danger of losing their money if the Reserve Bank cracked down.
The Reserve Bank recently found that over a period of six years, Sharemax Investments received more than R5 billion from 40 000 investors in an illegal manner. It said Sharemax operated as a bank without being registered as one.
Sharemax, the largest syndication scheme in South Africa by a long margin, has been operating for more than a decade and canvasses investments for property developments.

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Two UK banks eye Nedbank

Written on July 26, 2010 by admin in Content

Two UK banks eye Nedbank
http://www.fin24.com/Companies/Two-UK-banks-eye-Nedbank-20100726

Johannesburg – British banks’ plans to take over the South African banking group Nedbank are well advanced, if one is to believe the British media.
On Friday the possibility was again raised when the authoritative Financial Times of London reported that two British banking groups were negotiating with Old Mutual [JSE:OML] over its 52% stake in Nedbank Group [JSE:NED].
The paper’s columnist Mark Kleinman reported that HSBC and Standard Chartered had already negotiated such a deal with Old Mutual.

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Rates decision not seen to affect property market

Written on July 24, 2010 by admin in Content

Rates decision not seen to affect property market
http://www.iolproperty.co.za/roller/news/entry/rates_decision_not_seen_to

The decision to keep the repo rate unchanged at 6.5 percent was expected and should not have any impact on the residential market’s recovery, an estate agent said on Thursday.
Interest rates were at a lower enough level to provide an impetus for the market to gradually recover, Jawitz Properties said in a statement.
“What is needed more than a drop in rates, is for the banks to continue to ease their lending requirements and for consumer confidence to improve especially at the upper and luxury end of the market,” CE Herschel Jawitz said.
The lower- to middle markets, which were most interest rate sensitive, were still finding going with the banks tough.

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Call for greater leniency in national credit act

Written on July 23, 2010 by admin in Content

Call for greater leniency in national credit act
http://www.iolproperty.co.za/roller/news/entry/call_for_greater_leniency_in

Another high profile personality in the Cape property sector has now said that until there is an easing of the National Credit Act criteria which the banks apply to their mortgage bond lending and a greater willingness to accept risk, there can be no hope of the property sector (or indeed the economy) once again flourishing.
Mark Marks, a director of the Western Cape Institute of Estate Agents and a consultant to Permanent Trust, says that right now both the residential and the commercial property sectors can offer good bargains to those buyers with cash. This, he said, reflects the difficult conditions being experienced – a large percentage of potential buyers are simply unable to get bonds and are forced to continue to be tenants, “which has never been the declared government policy”.

I don’t think the problem lies in the NCA as much as in the banks’ credit criteria. Because of bad debt the banks were very afraid of losing millions of rands again, and therefor their credit lending policies were adapted.

They have become a little more lenient lately, but they are still very carefull with home loan approvals.

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Banks wary of bonding self-employed people

Written on July 22, 2010 by admin in Content

Banks wary of bonding self-employed people
http://www.iolproperty.co.za/roller/news/entry/banks_wary_of_bonding_self

Banks wary of bonding self-employed people
A growing number of people who are self employed, with incomes dependant on fluctuating commissions, face huge difficulties in becoming homeowners, says Lanice Steward, MD of the Cape Peninsula estate agency, Anne Porter Knight Frank.
This, she says, is because the banks, complying with the National Credit Act, have to be especially careful about lending money to people who are employed in positions which might be considered insecure.
“There is,” said Steward, “a certain arbitrariness about the concept that a self-employed person, especially one on short term contracts, is not a good security risk because many of these people are high income earners – but that is the way the banks feel obliged to act.”

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Interest rates unchanged

Written on July 22, 2010 by admin in Content

Interest rates unchanged after MPC meeting
http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page228?oid=62772&sn=Detail

After a two-day meeting, the South African Reserve Bank’s Monetary Policy Committee (MPC) left the key monetary policy interest rate – the repo rate – unchanged at 6,5%. As a result, banks’ lending rates to the public, i.e. prime and mortgage rates, are to remain at a level of 10%. Interest rates have been cut by a cumulative 550 basis points since December 2008.
Consumer price inflation is currently below 5% year-on-year (y/y), but factors such as double-digit administered price inflation and wide-spread wage hikes of well above inflation pose some risk to the inflation outlook. No further rate cuts are forecast for the rest of the year, with a rate hike expected by mid-2011 due to inflationary pressures. Mortgage repayments are still about 29% lower compared with late 2008, when the mortgage rate was at a level of 15,5%. However, the household sector remains heavily indebted, with the ratio of household debt to income at 78,4% in the first quarter of 2010, and expected to remain around the 78% level towards the end of the year. The debt ratio is forecast to rise marginally during 2011.

(via Instapaper)

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Pricing realism now defining market

Written on July 21, 2010 by admin in Content

Pricing realism now defining market
http://www.property24.com/articles/pricing-realism-now-defining-market/12009

Pricing realism and oversupply are now stark realities in the residential property market with more people dropping their asking prices and properties staying on the market for longer periods.
The 2nd Quarter FNB Property Barometer, which gauges the opinions of estate agents, showed the average time that a house is on the market before being sold shot up to 17 weeks and 1 day from 12 weeks and 4 days in the 1st Quarter (Q1).
“While being subjective, we are of the opinion that in a market with a healthy balance between demand and supply, this level should be below 2 months,” said John Loos, property economist at FNB.

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The mortgages rules for building yourself

Written on July 21, 2010 by admin in Content

The mortgages rules for building yourself
http://www.iolproperty.co.za/roller/news/entry/the_mortgages_rules_for_building

“Building for oneself,” said Lawrence, “at the moment is almost always more expensive than buying a second hand home of the same size – but it has the huge benefit that the client gets exactly the home that he wants, designed and finished to meet his needs.”
Most of those going this independent route, said Lawrence, do rely on bank finance – and banks are still prepared to advance up to 80% bonds for this type of enterprise, provided that the loan applicant qualifies and goes about his request in the approved way.
This, he said, involves, either buying a plot , designing and building a house or buying into a so called ‘plot and plan’ system where the house is pre-designed as part of the development.

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