Tuesday, May 06, 2008

Sellers urged to face market realities

CAPE TOWN (May 02) – Sellers, not legislation, not rising interest rates or estate agents, was cited, as an unnecessary major contributor to the residential property market’s slowdown.
While it was an undisputable fact that the South African economy had become entangled in the global credit crunch its effect on the market along with rising interest rates was, in Jeanne van Jaarsveldt’s view, “being largely overstated.’ “Undeniably, the biggest sheet anchor on the movement of residential property right now is overpricing and this can be substantiated by the number of sales being concluded after negotiation on price.”
According to the FNB property barometer for the first quarter released earlier this week the percentage of properties sold at less than asking price was 83 percent and 82 percent in the last quarter of 2007.
Van Jaarsveldt, marketing and finance director of RE/MAX of Southern Africa, insists that it is important that sellers realise the slowdown in the South African property market was a direct result of financial fundamentals of a global nature and not part of a national conspiracy engineered by the Reserve Bank, the commercial banks or estate agents.
To blame the Reserve Bank was unfortunate as it was only exercising its appointed role of controlling inflation through the traditional tool of interest rate adjustments.
It was also unfair to fault other market influences, such as the state, banks and estate agents.
The reality was that South Africa, just as other international economies had been snared into the global credit crunch, which was creating uncertainty and grinding down market confidence. “In New Zealand we have seen residential sales plummet by more than half in the past month over March of last year while Britain’s annual rate of house price growth in the first quarter of 2008 was 2,2%, down from 6,9% at the end of 2007.
House prices slowed even more sharply in Northern Ireland where the annual rate of appreciation fell from 24,2% to –3,4%.
Peter Gilmour Regional Director of RE/MAX SA and Senior Vice President of RE/MAX International reports that real estate sales have reduced by 30%-40% in many markets in the USA and little improvement is expected in 2008.
Also in Australia that country’s national estate agent body heaved a sigh of relief almost audible enough to be heard in South Africa after its Reserve Bank held rates steady in April after hikes in both February and March which reportedly left home owners reeling from the accumulative effects of the increases."Van Jaarsveldt urges both sellers and buyers to maintain perspective of the market and particularly it’s strengths as opposed to exaggerating its weaknesses, which had become overly fashionable.
Of importance, and this only applied to the South African market, was the continued emergence of the black buyer.“Some commentators believe this source as an effect on the market could run for 20 years before burn out, but the importance of this force is to understand that its former momentum has only been briefly stalled and will resume once affordability begins to improve among state employees.”
Also pertinent, even in the current slowdown, house price growth was still increasing admittedly of a slower nature. Sales in the lower end of the market were also still active, but to van Jaarsveldt, the biggest indicator underpinning a recovery was the lack of new building taking place.
The pace of new residential developments had slowed markedly with many developers at their wits end trying to successfully mix the cost of new building land and materials with affordability.
Further shrinkage in new unit supply was inevitable and this, perhaps more than any single feature, would fuel second hand stock prices unrealistically when the market turned.

Thursday, April 17, 2008

Growth, Rental Return or Quick Buck?

In more than 6 years advising property investors in the blaauwberg, Cape Town area on buying property I worked with many different investment theories!

Some property investors are extremely conservative and are looking for a very safe no risk buy! They are looking for good growth and good rental return over a long period of time.
Other investors are looking for quick returns, buy cheap, renovate and sell.
I have favoured over time investing in properties that give a little of both.
In our area of Blouberg our beachfront properties give a lower rental return but have given better than average growth return.

In our slightly less expensive areas you can pick up a unit that has a very good rental return but might not grow as much as the beachfront area.
You can see the dilemma.

I would advise my clients that if they have got the cash to buy more expensive apartments on the beach.
You might not get good rental, but who cares if they are no hassle to rent out and are doubling up in price every few years.
If my client is bonding the property with a bank and my client does not have great cash flow then I would recommend buying a property with a high rental return and demand for rental as this can put 60 to 70 % of the finance towards the bond.

The smart way to buy is to really shop around and to try buy below market value.
If you renovate and sell for a quick buck then make sure you have other properties you can flip.

Remember once you have sold that property you will not be able to buy that same property at that price again.

So to conclude!

Buy properties below market value and hold onto them as long as possible.
Rental return and growth will almost always equal each other out.
Don’t buy brand new properties to rent out as often the damage that tenants can do will destroy that good feel a new place has.
Try to buy a property that is in good nick but can do with a coat of paint at a later stage.

If you decide to sell then you should do your renovation work to make the unit achieve a higher price.

Check out this report at Do not pay too much for your property.

You might find our Buyer's Toolkit very interesting before you go ahead and purchase that property.

The Husband and Wife Team have won the coveted platinum award three years in a row. 2005, 2006, 2007.Membership of the RE/MAX platinum club is one of the highest single year commission honours that Re/max bestows upon a sales associate.Ashley and Izelle are well known estate agents that service the blaauwberg area.There area includes, Milnerton, Melkbos, Sunset Beach, Big Bay, Parklands, Bloubergstrand and Table View.

Tuesday, April 15, 2008

Five steps home sellers need to know to sell in a buyers market!

As a real estate agent that has been in the business for many years I have learnt a few tricks to getting your home sold in a tough market.
I work in Blaauwberg, a suburb in Cape Town, South Africa.
We like the rest of the world are in the throes of a slowdown in the property market.
What are sellers to do?
Obviously the number one mistake sellers make is they come on to the market at an unrealistic price. In a tough market you need to be realistically priced from get go, otherwise you waste precious time and as the market gets tougher you end up getting into a desperate to sell situation.
Choosing a good estate agent is the first step a seller can make in getting there home sold. A good agent needs to know the market, have a strong web presence and have good selling and networking skills.
These few simple ideas will in my opinion make a huge impression on getting your home sold and will cost very little for the seller.
Step 1: Make sure your home is de cluttered! When a prospective client walks through the door they should be seeing the home not the stuff lying about. Pack stuff away and allow buyers to view your property without clutter.

Step 2: Get your home to smell good. Microwaving vanilla essence or brewing fresh coffee really get clients to feel good about your property. People use all there senses when buying a property and I have sold properties where the buyers motivation was that the home smelled good. Trust me this really works!!!

Step 3: Splurge a little money on a fresh coat of paint. Keep the colours neutral. Try paint your home just before going on market. If you cannot afford an outside paint job hire a high pressure spray gun and clean the paintwork of any dust. If your carpets are in a bad way replace them or alternatively have them professionally cleaned.

Step 4: Make sure your garden is cleaned up and the lawn freshly cut. Keep clutter at a minimum. If you have animals that make a noise then take them for a walk when clients are viewing your property Dog doodooz are a big no no and need to be cleaned up. Make sure your pool is sparkling and leaves are raked up.

Step 5: Open up your home for a viewing and make sure there is lots of light shining into your home. A dark house is a big turn off for many buyers. If your home smells great, looks good and has a sunny feel you are already 90% on the way of greatly improving the sale of your home.

Interested in some great reports on selling your home? Take a look at these reports on RE/MAX selling reports for sellers

Seller Guidance: I would encourage you to employ a professional estate agent to help you sell your home. When your agent or another agent is showing your house, go away and let them do your work for you. I also urge you to utilize my FREE SELLERS TOOLKIT
before selling your house.

Buyer Guidance: I would encourage you to really check out anything and everything you are told by a well meaning seller. Employ the services of a Buyer's Agent to help you discern what you read and listen to about the area you are thinking of calling home. I would also urge you to get AVOID BUYING ERRORS before heading out on the journey to find your new house.
To view our listings go to OUR LISTINGS
The Husband and Wife Team have won the coveted platinum award three years in a row. 2005, 2006, 2007.
Membership of the RE/MAX platinum club is one of the highest single year commission honours that Re/max bestows upon a sales associate.
Ashley and Izelle are well known estate agents that service the blaauwberg area.
There area includes, Milnerton, Melkbos, Sunset Beach, Big Bay, Parklands, Bloubergstrand and Table View.
You can check out there website at husbandandwifeteam
and there blog atOur Blog!

Monday, April 14, 2008

Interest Rates Reaction!

Date:11 April 2008
JOHANNESBURG (April 10) - With CPIX inflation near 10%, and today’s 50 basis points rate hike signalling the seriousness with which the SARB takes its inflation targeting job, John Loos, FNB Home Loans Property Strategist, warns that the economy is definitely not out of the “danger zone” yet with regards to risks of further rate hikes.

As such, he advises the market to proceed with caution when involved in home purchasing and to buy in a price range well within one’s means. “Scenario planning to allow for the possibility of further interest rate hiking would be a good practice.”

Loos says today’s news is negative from a residential property market performance point of view. “Whereas we had expected rates to move sideways for the entire 2008, a scenario which I believe would have led to a gradual recovery in residential demand as from mid-year, such a recovery has in all probability been delayed considerably, and it will take substantially longer for household confidence to start recovering.”

Loos believes that today’s development begins to raise the possibility of a small period of national house price deflation, which under a sideways rates scenario he says would have been narrowly avoided.

When splitting up the market by price category, Loos believes that the combination of rate hiking and high food price inflation will bring the superior performance of the lower priced end to a close. Lower income groups face the “double-whammy” of rising interest rates as well as high food price inflation.

Food price inflation, he points out, affects lower income households worse because it consumes a higher portion of their total income.

Strongly holiday property-driven areas are probably also in for a more torrid time until such time as the interest rate cycle clearly turns.

Loos says the overall impact on home loan repayments since the start of rate hiking in June 2006 is now becoming more than significant. On a R1million house the cumulative impact of 450 basis points worth of hikes is an increase in the monthly repayment value by R3,184.

Every event brings good news, in his view, and the good news in this case is for the rental market and existing landlords. “FNB’s rental property barometer has already been pointing towards a recovering rental market, and I believe that in the current environment of uncertainty and negativity the resumption of rate hiking will be an additional boost for rental demand.”

“Many potential first time buyers would probably want to delay buying, continuing to be tenants for a little longer, while buy-tolet-buying will probably deteriorate further on the news, constraining the supply of new rental stock. The combination of constrained supply and strengthening rental demand is a great recipe for rental market recovery, and I believe that 2008 will see a considerable widening in net income yields on letting property stock.”

Monday, April 07, 2008

World Cup soccer 2010, Should you be buying Property?

With the 2010 World Cup soccer being held in South Africa in 2010 property investors, speculators and property owners are keen to see what will be happening to property prices in the run up to the cup.

All over SA, we are seeing the upgrading of various infrastructure.
So far the tournament is the single biggest catalyst that is triggering major infrastructure investments in South Africa.

Major projects are underway with the multi million rand Gautrain project, the Green Point Stadium, the Coega aluminium smelter and the billions allocated to the construction of the new King Shaka International

Airport at La Mercy in KwaZulu-Natal.

Well how will this benefit property prices and when?

The first major benefit to the property industry will be demand for accomodation for corporate lettings linked to 2010 infrastructure projects.

The global slow down has recently put pressure on property prices in South Africa which had seen

phenomal growth up to mid 2007.Analysts are predicting an upswing towards the end of 2008 begining 2009.

Property agent, Ashley Den Breeijen of Re/max advises clients that are thinking of selling to hold onto there properties for at least another year.
The market is also at present ripe for the picking and investors on the lookout can snap up great deals in this current buyers market.

If you have the money buy now, according to Ashley who has years of experince in the property arena.
Post World cup will see properties still benefiting as South Africa hopefully reaps the benefits of this massive marketing coup for our country.

Ashley Den Breeijen heads up a real estate team called the Husband and Wife Team in the Blaauwberg,

Cape Town areas.
You can visit his website at www.husbandandwifeteam.com

Monday, February 27, 2006

Tax and home ownership in South Africa

Tax and home ownership in South Africa ashley D

TAX AND HOME OWNERSHIP from www.husbandandwifeteam.com
Cape Town, February 2006:
These days it is seldom advantageous (from a tax point of view anyway) to register ownership of a private home in the name of a trust, close corporation or company. This has been a popular practice in the past but SARS have moved to close down the tax advantages that this practice once offered. According to RE/MAX of Southern Africa Regional Director, Bruce Swain, the advantage of the current position is that people are encouraged to simplify their affairs, so that actual control and use match legal ownership much more closely. According to RE/MAX Elite Broker/Owner and Conveyancing attorney, Grant Gunston, when one buys a property in the name of a trust, close corporation or company, one pays additional tax both when purchasing and when selling. From 1 March 2006, these entities pay a flat 8% transfer duty when purchasing (whereas private individuals pay transfer duty in accordance with a sliding scale of 0, 5 and 8%). On selling, these entities do not enjoy the exemption from Capital Gains Tax (CGT) which applies to private individuals who sell their primary residence (currently R1.5 million of the "profit"). The rate at which CGT is paid is also higher for legal entities than that which applies to private individuals, and there is the added problem of secondary tax on companies should one want to take the profits out of a company or close corporation, for use by the individual/s behind the entity. Gunston states that people were willing to pay the higher transfer duty in the past on the basis that they would make the difference back when they sell. (The theory was that by selling the company or close corporation that owned the property, they would be able to realise a higher price given that no transfer duty would be payable).
“Whether one actually achieved a higher price in practice is debateable, but in any event, the definition of "property" in the Transfer Duty Act has now been amended so that sales of legal entities that own residential property now also attract transfer duty - thus doing away with the transfer duty loophole” says Gunston. Having painted the above negative picture regarding home ownership in legal entities, it should be said that there are still valid reasons to use these entities for home ownership. A trust is appropriate for example, both as a way of protecting assets from future creditors, and also as an estate planning tool. People often have questions about how CGT applies where one claims the use of a home office as a tax expense against income, or where a portion of a home (e.g. a granny flat) is let out to tenants. This does not mean one looses the entire R1.5 million CGT exemption, but the income generating portion of the property will be liable for CGT - pro rata. Whether one qualifies for the CGT exemption is not about whether the property in question is the only property you own - it is about whether you actually live there. So it is possible for example to live in a rented flat as one's primary residence while owning a luxury home at the seaside, which one uses most weekends. The seaside home would not enjoy the CGT exemption. Occasionally income tax may be payable on the profits from the sale of a residential home - if SARS deems you to be a speculator or developer. If one buys and sells as a business, one may also be required to register as a VAT vendor and pay 14% of the selling price to SARS as VAT. Ashley D from husbandandwifeteam at remax advises to invest in specialised tax advice if this could apply to you.
About the AuthorHusband and Wife team selling property in Blaauwberg, Cape Town, South Africa for remax property associates. Check out property in blaauwberg, Cape Town at our site www. husbandandwifeteam.com

Friday, February 24, 2006

property for sale in parklands, Blaauwberg, blouberg. Cape Town.

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Check photos at www.husbandandwifeteam.com

Price R699 000
Type: Residential Style: Duplex "freestanding modern" Bedrooms: 4 "3 bedrooms + study" Bathrooms: 3 "guest loo downstairs" Garage: Double "remote access" Size: 114 m² "loads of space" Lot Type: Rectangular Lot Size: 200 m²

Extremely neat freestanding duplex in blaauwberg, Parklands.Home consisits of 4 rooms, a lounge diningroom, double garage, 3 bathrooms, outside braai area, and in a security complex.Neat garden and with views of table mountain

▪ freestanding and exceptionally neat!
▪ Open plan kitchen , seperate lounge and diningroom.
▪ Double garage and neat garden and braai room!
▪ In cental position in Parklands, blaauwberg, Cape Town.
▪ Low maintenance and ideal lock up and go.Very spacious
Interior Features
▪ Carpeted Floors
Lot Features
▪ Fenced Yard
▪ Garden Area
▪ Landscaped
▪ Patio
▪ Trees / Shrubs
▪ City Lights
▪ Hills
▪ Mountain View
Extra Features
▪ Controlled Access
▪ Garage Door Opener
▪ Pets Allowed