Sandton Real Estate

For the love of property

Properties under R1 Million, “To target Investors”

With the interest rate at the lowest in years, investors are now targeting buy-to-let properties. Many landlords are now looking at double-digit rental increases this year.

A strong recovery in investment buying is predicted for this year. Investors will be looking to buy properties priced below R1m, due to stronger returns being expected than cash in the bank. Property still remains the best value for money.

“FNB property strategist, John Loos, backs up these claims referring to the latest Stats SA figures, which show that residential rentals have steadily increased with an average growth of 5.6% recorded in November year-on-year. Sectional title flats have shown the largest increase, jumping by 8.6% while free standing houses recorded the lowest growth at 3, 56%.”

According to the TPN (Tenant Profile Networking) Credit Bureau the percentage of residential tenants paying their rent on time has risen to 81% in the 3rd quarter of last year. The number of defaulting tenants has decreased to 10%.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

February 1, 2011 Posted by | The Real Estate Market | Leave a comment

The Interest Rate Lingo

Current Prime Interest Rate = 9.0%

What is a Fixed Rate vs Variable Rate:
The interest rate on a fixed rate home loan does not change.

The advantage of this is that you are protected from rate increases and your monthly payments are consistent. The disadvantage is that you will not benefit when the prime rate is dropping.

The fixed rate will usually be slightly higher than the prime rate at the time of your application.

The variable rate means that your repayment amount will increase or decrease with the prime rate.

What is a prime rate?
The rate at which the bank is currently lending.

Repo Rate vs Prime:
The Repo rate (repurchase rate) is the rate at which the Reserve Bank lends rands to our local banks.  This rate is usually 3.5% lower than the current prime rate.

Jibar Rate vs Prime:
The Jibar rate (jhb interbank agreed rate), is used by SA HOME LOANS, while the Prime rate is used by the Major Banks (STD, ABSA, FNB and Nedbank).

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

January 25, 2011 Posted by | The Real Estate Market | Leave a comment

Positive Feeling for Property 2011

The residential property market has several factors in its favour going into 2011:

  1. exceptionally low interest rates
  2. slower-than-expected consumer price inflation
  3. decreasing levels of household debt

Where you aware that the interest rate is the lowest it has been in 36 years?

With decreasing household debt couples can now consider purchasing a home of their own. Banks will be more favourable to granting a higher percentage bond. Low interest rates are already helping the property market by putting extra money into household piggybanks and boosting the demand for credit such as home loans.

Economists are predicting another rate cut early in the year, which can only be good news to consumers.

Standard Bank has estimated that inflation will average 4.6% y/y in 2011, so even if house prices only grow at 7% – which we think is what we can reasonably expect – these will still beat inflation in most cases.

Experts predict there will be a noticeable growth in the “small house” segment sales. All in All there is an atmosphere of positivity for the property market. Although property won’t boom, there will definitely be growth.  Purchase Price will still remain a strong factor. The general feeling is that buyers. Similarly, while access to shops, schools and major transport routes is still important, these are also secondary considerations to price and running costs in almost every case.

There is a general feeling of positivity and growth for the property market for 2011, although there consensus that we cannot at this stage expect a property boom.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

January 12, 2011 Posted by | Economy & Markets, Sandton Local News, The Real Estate Market | Leave a comment

It’s safer to sell before you buy a new home

Many homeowners are looking at the upgrading opportunities presented by the current market and making offers to purchase bigger and better properties before they have even listed their existing homes for sale.

And there are of course certain advantages to buying a new home before you sell the old one, says Berry Everitt, CEO of the Chas Everitt International property group. These include the fact that you know where you’ll be living next, when you can take occupancy and how much you’ll be paying.

“Buying first also usually means you won’t have to move twice. Many repeat home buyers have had to move to an interim rental property because they couldn’t find a replacement home by the time they had to turn their existing home over to the new buyers.”

However, he says, this really may not be the wisest approach. “For a start, there’s a good chance that it will take longer to sell your existing home than you anticipated it would, and that you could end up being liable for two home loan instalments a month.

“Such double payments can add up remarkably quickly, and then you would probably feel pressurised to lower the price of your old home just to achieve a sale.”

Writing in the Property Signposts newsletter, Everitt says it is best to do some homework before making any decision. “Find out the current market value of your home from reputable estate agents in your area and quiz them about market conditions. Is it a buyer’s or a seller’s market in your suburb? In a hot seller’s market, the chances of a quick sale are much higher than in a soft buyer’s market.

“You should also establish whether there any problems with your home that could make it difficult to sell. Is it located across the street from a noisy school? Is it next to a busy freeway? Does it lack a garage or a second bathroom? Is the floor plan awkward?”

Armed with this information, he says, you will be better able to assess the risk of buying first. If it’s likely that your home will sell quickly, it may be worth the risk of buying before selling. But if the marketability of your home is questionable, you should really consider taking the more conservative route of selling before buying.

This article has been reprinted with the kind permission of Chas Everitt International.
Berry Everitt
011 801 2500 or visit
www.chaseveritt.com

December 7, 2010 Posted by | The Real Estate Market | Leave a comment

Potential Restrictions to the use of your Property Purchased

Title Deed Restrictions

A property cannot be sold in contravention of a title deed restriction. For example,  a property developer registers restrictive conditions against the title deeds of erven within a development, restricting the use of each of the erven. For example, there could be limitations on design, house size and roof covers. This type of restriction is very common for golf estates and gated communities.

Guide Plans

A guide plan is a broad outline for determining land use patterns for the future development of a region er for industrial development, commercial development, residential establishment, farmland, recreational areas, etc
Urban Structure/Development Plans

The larger local authorities should each have a structure, development or policy plan specifying the land use patterns for an entire town or city, or parts thereof. It should set out where shops, offices and residential development can take place.

Town Planning Schemes

Every local authority has a town planning scheme, which is devised for the purpose of providing for the general welfare and attractiveness of the environment. The scheme should consist of both a scheme map and scheme clauses, which sets out limitations and controls for the usage of property in an area:

The above impacts the way the land may or may not be utilized. If you are purchasing your property with the intention of starting a business, a day care centre etc. You will need to find out whether or not you will be permitted to do so before concluding an offer to purchase to avoid being disappointed.

Removal of Restrictions

It is possible to have a title deed description removed in terms of the Removal of Restrictions Act 84 of 1967. Applications for the removal of title deed restrictions are normally dealt with on behalf of the property owner by an attorney or town planner.

Rezoning can be more involved and the success of an application depends on the following:

  • The town planning scheme
  • The structure/development plan
  • The need for re-zoning
  • The desirability of the rezoning
  • The environmental impact of the rezoning
  • The precedent set by the rezoning
  • The opportunities/restrictions relating to the property
  • Acceptability of proposal to adjacent residents and civic associations

A rezoning application generally takes around 6 to 12 months to be processed and involves the following steps:

  • Preparation of motivation or application for rezoning by applicant
  • Advertising of the application, calling for comments from the public
  • Replying to comments and objections
  • Consideration of application by the local town planning department
  • Referral of the application if required to other town council departments
  • Referral of the application to the council committee
  • Referral to provincial authority on appeal

In conclusion, the variables in land use control are vast. If any questions or queries on land use are required, it is prudent to refer these to a professional; a town planner, the local municipality or an attorney.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

November 16, 2010 Posted by | The Real Estate Market | 4 Comments

Buying Property Off-Plan in South Africa

Buying “off-plan” means you are purchasing your new home in a sectional title complex or cluster home scheme before it is built and will be depending on the developer and builder to complete your home properly and timeously.

Buying off-plan property has become a popular choice in South Africa. Property developers are keen to maximise on off-plan sales as an aid to financing a project. Buyers choose their properties from plans, elevations and computer graphics, and need to exercise their imaginations to envisage the end product.

When buying a property in South Africa off-plan, you need to do your homework and you need to be aware of potential pitfalls. There are many stories of buyers who bought property off-plan only to discover a variety of defects on the property once they had taken occupancy of the property.

Because most property you buy off-plan in South Africa will have appreciated in value by the time you take transfer, buying off-plan remains an attractive option. Buying property off-plan also saves the buyer on transfer duty and buyers are also given the freedom to choose their own fittings.

In most cases when you buy a property off-plan you will be shown an “artist’s impression” of what the property may look like. Always take into consideration that this is not a guarantee of what the property will look like, but is a visual possibility drawn up in the initial stages.

A reliable property developer will ask the buyer to draw up a list of defects on the property to be submitted within a certain time frame so that these may be attended to by the developer before occupation.

Some things to look for when drawing up a list of defects include:

  • Straightness of the walls
  • Light switches working
  • Plugs in working order
  • Scratches, cracks and marks
  • Stove in working order
  • Taps, shower, bath and plumbing are in working order

The first buyer of a new property is exempt from paying Transfer Duty which can offer savings on a property. Profits from off-plan properties can be free of capital gains tax if the property is sold before completion.

In order to maximise on profits through off-plan purchase it is essential to purchase early. The South African property market, as in many others, is experiencing a steady growth and prices never stay at the initial offer level for long.

There are plenty of ways to insure that you are protected under new housing laws. A few years ago the Housing Consumers Protection Measures Act was introduced. Under this law the National Home Builders Registration Council was established to protect your interests.

This article was originally printed by Agent, the Official Publication of the Estate Agency Affairs Board

November 15, 2010 Posted by | The Real Estate Market | Leave a comment

Validity of Property Sale Agreements

Once a property sales agreement has been signed, it is not necessarily cast in stone and can, in fact, be altered. People often panic when if they need to alter something in a document after signing. It is so that once the sale agreement has been completed and signed it becomes a binding contract; changes may be made, providing that they are done in writing and are signed by all the parties in order to be a valid binding.

But very important, also take note that any informal variation, for example a verbal agreement between the parties, will be null and void and the signed sale agreement will be taken to be the final agreement, because the variation was not recorded in writing.

Reasons for a change in sales agreements vary. Such reasons include a common mistake or recertification. Common mistakes are sometimes made by the parties involved in, therefore leaving the parties unsatisfied and results in the terms of the agreement not reflecting the intentions of the parties. Other reasons could be as a result of the parties that wish to rectify some of the material terms after signing.

If the sales agreement is amended by only one of the parties, this amendment would be null and void. All parties must be confident and in agreement with the alteration of terms, and consensus must be given.   

Provided that all alternations are signed where they are made on the agreement, by the parties, the amended agreement will be valid.

November 13, 2010 Posted by | The Real Estate Market | Leave a comment

Benefits and Disadvantages of Pricing a Property

The Benefits of Correct Pricing:

  • It gives the impression of good value to your purchaser
  • It increases the response from your advertising
  • It projects Seller Commitment
  • It achieves the maximum response in optimum time and maintains the Seller negotiating advantage.

THUS the consequences of Correct Pricing are:

  • A maximum number of acceptable offers
  • A maximum Seller price is achieved
  • The marketing period of the property is minimized and the property is not overexposed, thus the Seller’s lifestyle is not disrupted continuously
  • Bargain Hunters are discouraged and the property is sold within the shortest period of time possible.

The Disadvantages of Over-Pricing:

  • Potential buyers lose interest as the property is over-exposed
  • Marketing time is prolonged and advertising is expensive, therefore properties are not advised as well as they should be
  • Lower offers are attracted as a result of a reduced advertising response
  • Buyers become reluctant to make an offer, as they wonder what is wrong with the property – why it has not been sold. Is it a sound investment?
  • The property gains a stigma and competing properties become more attractive
  • Bargain Hunters now “stalk” the property, waiting for it to become an urgent sale

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

October 28, 2010 Posted by | The Real Estate Market | Leave a comment

What is Bridging Finance?

It is an advance of money which the seller expects from the sale of his/her property.

It allows sellers to have access to cash before the registration and transfer process has been completed. The seller is able to use the funds to pay outstanding rates and taxes, for example.

Bridging finance can be a useful tool to help you out of a “catch-22” situation, like having to wait for the profit of the sale of your house to pay for the registration and transfer costs of your new home.

However, it is very important to make sure you understand all the costs involved when using this type of short term lending. Find out if there are administration costs, what interest will be levied – each institution offering bridging finance have their own rates, there is no standard. Be aware of this type of financing, it can be expensive.

 Most institutions that provide bridging finance will only finance up to 80% of the surplus money which you will receive from the sale of your property. They evaluate the risk to themselves before deciding on what percentage they are willing to loan. It is seldom, if ever, that a 100% loan is granted.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

October 19, 2010 Posted by | The Real Estate Market | 2 Comments

South African Property – the way to go!

Foreign interest in South Africa’s property has escalated in the past 500 odd years since the discovery of the Cape of Good Hope. It has resulted in South Africa becoming a veritable property investor’s mecca. The country is a popular holiday and business destination complete with a diverse range of properties, from basic bachelor flats to luxurious seaside manors set against magnificent backdrops.

South Africa’s political past created something of vacuum in the property market, slowing development and removing millions of citizens from the buying pool. Although that is the case, things seem to be looking much brighter for the future of the country, with the economy seemingly sound – 2010/2011 growths has been estimated at 5%, trumping that of the US and the UK. World-class banking and foreign exchange practices also continue, and a strictly regulated property purchase system is in place.

Commercial property growth exhibits the vibrancy of the residential market. Getting your money’s worth is amongst the best in the world as the cost of living in South Africa is relatively low in comparison to the exchange rate perspective of many Western currencies.

Buying property in South Africa is reasonably simple and there are no restrictions on foreign ownership, unless the person has run into some troubles in the past (ex. Criminal record, illegal aliens). It is advisable to visit South Africa numerous times before deciding to purchase property, preferably at different times of the year. Doing so will provide a fairly accurate gauge of the kind of weather and other important factors, ensuring that when the decision is made, it is the correct one.

Having found a suitable property, it’s crucial to employ a legal conveyancer who has experience in foreign property transactions and who is able to manage your transaction.

Transfer and bond documents can be signed at a South African embassy or consulate in case the investor is unable to sign the documents in South Africa. There are other possibilities available to those who do not want to commit to purchasing South African property immediately. There is an option is open to purchase within an agreed period of time that can be incorporated into lease agreements in certain instances.

The buyer is also able to exercise first option rights to acquire the property should a third party display an interest.  South African property can also be bought in instalments. This process is provided for South Africa’s property legislations.

October 19, 2010 Posted by | The Real Estate Market | Leave a comment