Pretoria - House prices, excluding the effect of inflation, dropped by 5 percent year on year in April, which is the biggest decline since March 1997.
Absa, which released its latest house price index yesterday, is now forecasting for the first time that real house prices will slip this year and next year.
Jacques du Toit, a senior property analyst at Absa, said the forecast had been changed because of the upward movement in interest rates, which were still expected to rise further this year and would have a major effect on the growth in house prices, and inflation ticking upwards.
House prices have now declined in real terms for three consecutive months, according to Absa's house price index.
Negative real growth of 1.5 percent was recorded in February, 3.4 percent in March and 5 percent in April.
February was the first time real house prices had declined since June 1999.
Du Toit said the real price of a middle segment house had dropped by 5.7 percent to about R614 400 in April from an all-time high of about R651 600 at constant year 2000 prices in August last year.
The average nominal house price had declined by R4 000 over the past three months.
Absa said nominal house price growth dropped further last month to 4.3 percent year on year in the middle segment of the market from a revised growth of 5.5 percent in April.
This was the lowest nominal year-on-year price growth recorded since October 1999, when it was also 4.3 percent.
Homebuyers have now shifted their focus to smaller and more affordable properties.
The release of the house price growth slump news coincided with this week's warning by Lew Geffen, the chairman of Sothebys International Reality, that house prices were expected to drop by about 40 percent by the end of this year.
Other major estate agency businesses reported that sales volumes were about 30 percent lower, housing stock available for sale had doubled in the past five months, buyers had declined and that banks had tightened their lending criteria.
Du Toit said developments on the inflation front, together with recent comments by Reserve Bank governor Tito Mboweni that drastic measures were needed and that the bank was now forecasting CPIX (consumer price index minus mortgage costs) inflation to decline to the 6 percent level again only by 2010, were expected to result in the monetary policy committee hiking interest rates by 100 basis points next week.
He said there was the risk of further rate hikes later this year if the CPIX inflation rate remained stubbornly high.
"In view of these developments and expectations, activity levels in the residential property market, and both nominal and real house price growth, are forecast to slow down even further in the rest of 2008 and into 2009," said Du Toit.
"In real terms, house prices are expected to decline this year compared with 2007, with a further real decline projected for next year."
Authored By: Roy Cokayne
Published By: Business Report
Monday, 30 June 2008
Tuesday, 09 October 2007
Why your property is not selling
There could be a variety of reasons why your property is not selling including factors such as bad marketing, bad timing or bad pricing. Bad marketing plays a big role in the most cases of properties not being sold. Consider advertising your property for sale on a prominent property listings website such as No Agent Property in South Africa, they currently offer free listing of your property in South Africa.
Here are some more possible causes for your property not being sold:
Competition from other property for sale
There may be too many properties for sale in your area at better prices and your property is getting lost within the myriad of better options. This can be the result of your property not being realistically priced or due to a desperate sellers market with too many sellers offering low prices in order to urgently sell their property.
Too much exposure to the property market
It will detract from the value of your property if your property is represented by multiple agents and adverts and you also run the risk of double commission on the sale of the property. Too many show house days will also have negative effect on the value of the property as it creates a sense of urgency and desperation.
Too little exposure to the property market
On the other end of the scale too little exposure will also minimize the possibility of your property being sold. If you are selling your property through an estate agency make sure they are doing enough to market your property.
Incorrect Pricing of Property
Setting the correct price is a very important factor to consider when selling your property. If you set the price too high you will stigmatize your property as "too expensive" and when you start decreasing the price it may be considered as being a desperate sale. Do proper research to make sure you set a realistic price from the beginning and if you do have to reduce the price of the property do it slowly and conservatively.
If your property has been on the market for more than 3 months consider withdrawing it from the market and taking a couple of months to work on improving the property. Enter your property in the market again giving attention to the points raised in this article.
Here are some more possible causes for your property not being sold:
Competition from other property for sale
There may be too many properties for sale in your area at better prices and your property is getting lost within the myriad of better options. This can be the result of your property not being realistically priced or due to a desperate sellers market with too many sellers offering low prices in order to urgently sell their property.
Too much exposure to the property market
It will detract from the value of your property if your property is represented by multiple agents and adverts and you also run the risk of double commission on the sale of the property. Too many show house days will also have negative effect on the value of the property as it creates a sense of urgency and desperation.
Too little exposure to the property market
On the other end of the scale too little exposure will also minimize the possibility of your property being sold. If you are selling your property through an estate agency make sure they are doing enough to market your property.
Incorrect Pricing of Property
Setting the correct price is a very important factor to consider when selling your property. If you set the price too high you will stigmatize your property as "too expensive" and when you start decreasing the price it may be considered as being a desperate sale. Do proper research to make sure you set a realistic price from the beginning and if you do have to reduce the price of the property do it slowly and conservatively.
If your property has been on the market for more than 3 months consider withdrawing it from the market and taking a couple of months to work on improving the property. Enter your property in the market again giving attention to the points raised in this article.
Wednesday, 05 September 2007
Expsenses to Consider When Buying a Home in South Africa
When buying a home in South Africa their is other expenses over and above your home loan that you need to consider. Make sure you budget for these expenses before you decide how much you can afford on your home loan in South Africa.
Home Loan Installments - You have to settle your bond payments and allow for an increase in your monthly installments on your home loan at any time.
Deposit - You might be required to give a 10% deposit on the purchase price. A deposit will also assist you in getting your home loan approved for the amount you applied for and may even help you negotiate a better interest rate on your home loan.
Insurances -You may be required to take out some sort of insurance to protect your mortgage in case of death and you need these installments in mind when you look at your budget. For full title houses, you will also be required to take out home owners' insurance on the structure.
Transfer Fees - All attorneys follow a recommended tariff by various Law Societies with the effect that one attorney is not more expensive than another.
Levies, Rates and Taxes - If you have bought a sectional title, you will also pay levies from now on, which may also be increased should the trustees feel the need to do so. In case of full title, you will pay rates and taxes together with your utility charges.
Postages and Petties - An attorney may also charge you for sundries like postage and telephone calls. This fee is usually in the vicinity of R350.00 plus VAT.
Water and Electricity - Home buyers should also keep in mind that they need to pay a deposit for water and electricity either to the local council or the body corporate, and of course the monthly charges from there on.
Transfer Duty - This is a major expense and is a form of tax payable to the Receiver of Revenue before lodgment of your transaction in the Deeds Office. If you do not have that kind of cash available you will have to borrow it under your home loan which will result in extra interest charged.
Bond Costs - The conveyancer will charge you a recommended fee as set out in by recommended tariffs by the various Law Societies.
Extra Charges - There are also some extra charges such as a Deeds Office enquiry fee (About R65), a fee for FICA attendance (R150) and a fee payable to the Deeds Office on date of registration of your transaction (up to R500).
Home Loan Installments - You have to settle your bond payments and allow for an increase in your monthly installments on your home loan at any time.
Deposit - You might be required to give a 10% deposit on the purchase price. A deposit will also assist you in getting your home loan approved for the amount you applied for and may even help you negotiate a better interest rate on your home loan.
Insurances -You may be required to take out some sort of insurance to protect your mortgage in case of death and you need these installments in mind when you look at your budget. For full title houses, you will also be required to take out home owners' insurance on the structure.
Transfer Fees - All attorneys follow a recommended tariff by various Law Societies with the effect that one attorney is not more expensive than another.
Levies, Rates and Taxes - If you have bought a sectional title, you will also pay levies from now on, which may also be increased should the trustees feel the need to do so. In case of full title, you will pay rates and taxes together with your utility charges.
Postages and Petties - An attorney may also charge you for sundries like postage and telephone calls. This fee is usually in the vicinity of R350.00 plus VAT.
Water and Electricity - Home buyers should also keep in mind that they need to pay a deposit for water and electricity either to the local council or the body corporate, and of course the monthly charges from there on.
Transfer Duty - This is a major expense and is a form of tax payable to the Receiver of Revenue before lodgment of your transaction in the Deeds Office. If you do not have that kind of cash available you will have to borrow it under your home loan which will result in extra interest charged.
Bond Costs - The conveyancer will charge you a recommended fee as set out in by recommended tariffs by the various Law Societies.
Extra Charges - There are also some extra charges such as a Deeds Office enquiry fee (About R65), a fee for FICA attendance (R150) and a fee payable to the Deeds Office on date of registration of your transaction (up to R500).
Monday, 13 August 2007
Running a Show House
While No Agent Private Property are first to advocate the use of the Internet in marketing a property where you can currently list your South African property free of charge, this should only be part of the overall strategy. A key element to the sale of your property is the running of a show house.
A show house is effective because of the following reasons:
• Most serious buyers look at a large variety of properties in the area/suburb they want to purchase in. The most cost and time effective medium of doing this is via show houses.
• You are inconvenienced much less. You get a lot of people coming through in one afternoon instead of in fits and starts over the whole week. This also means that you only have to tidy up once a week.
• You can “piggy back” off the advertising done by the larger estate agencies. The prospective buyers will be drawn into the area, and they will also come to your show house if your “on show” boards are prominently displayed.
• Our research has shown that more than 70% of visitors to show houses are a result of being drawn to the area/suburb, and not from a newspaper advert. We therefore believe that it is not necessary in most cases to advertise in your relevant property publication.
As mentioned earlier, the strategic placement of directional on show boards is a really important advertising tool. Please take note of the following:
• In most Municipal areas in South Africa, the boards are only allowed to be erected on Saturday and need to be taken down on Sunday evening. Under no circumstances may the boards be left up for any period of time.
• For maximum exposure, we strongly suggest that you place “directional on show” boards at all major/busy roads and intersections in your area. Additional “directional on show” boards should then “guide/point” from these points to your property. Wherever a change in direction is needed, place a “directional on show” board as close as possible to this intersection.
• If an estate agency is running a show house in close proximity, place a “directional on show” board as close to their board if at all possible.
• Place the “on show” board in front of your property
• The “private sale” board should remain in front of your property in as visible position as possible until your property is sold.
Erecting of boards:
• We suggest that wherever there is a lamppost/pole, you attach the board to the lamppost/pole using the inner eyelids. The best option is to use a thin rope.
• In the event of no suitable lamppost/pole, you need to mount the boards on the stakes. It is advisable to take a hammer or mallet for inserting the stakes. You need to try and find as soft ground as possible to insert the stakes into. It is advisable to insert the stakes in the ground before attaching the boards to the stakes. When inserting the stakes, be careful to place the stakes as close as possible to 60cm apart. Once both stakes are secure, you can attach the boards to the outer eyelids with cable ties.
• When taking the boards down, it is recommended that you cut the cable ties and separate the boards to the stakes. If you try and pull them out together, the boards could possibly get damaged.
Preparing the show house:
• The most important aspect is to make sure that your property is neat and tidy. This will encompass both the inside and garden (if applicable).
• If there are any unsightly areas (such as a wall that needs a coat of paint) that can re rectified easily and inexpensively, we recommend that you do this. Please however do not do this on the morning (or possibly the day before) if there will be a smell that will linger on until the show house. While buyers expect sellers to have tidied up, they might become suspicious if there are strong paint or other smells.
• When preparing the houses, concentrate most of your efforts on the area that the prospective buyer will first encounter. It is a proven point that the first impression is the most important.
• While we suggest touching up minor snags, we certainly don’t endorse doing touch ups on major problems such as rising damp etc.
The actual show house day:
• We believe that the advantages of the owner running their own show house far exceed the negatives. The chances are that you know your own house far better than any outsider. You will be able to answer any questions (relating to the house) that the prospective buyer might ask you.
• We believe that you should conduct the show house in as informal basis as possible. We don’t recommend “power dressing”, but rather something smart casual. The idea is to be as relaxed as possible, with the emphasis on being friendly.
• Make sure that all brochures are visible and where possible take down any visitors contact details.
• It is very important that all valuables are safely stored out of easy reach. Be very aware of suspicious looking people. Unfortunately some criminals have been known to target show houses.
• Always be entirely honest with all prospective buyers.When you get an interested buyer
• Decide at the beginning exactly what price you are prepared to accept. Never disclose this price to anyone.
• If you get an offer below this price, we recommend that you never counter offer. By counter offering you are revealing what price you are prepared to accept.
• Once you have agreed on a price, the offer to purchase/deed of sale document needs to be completed.
• If the buyer requires a bond refer him/her to No Agent's South African home loan services which offers a substantial saving to them.
A show house is effective because of the following reasons:
• Most serious buyers look at a large variety of properties in the area/suburb they want to purchase in. The most cost and time effective medium of doing this is via show houses.
• You are inconvenienced much less. You get a lot of people coming through in one afternoon instead of in fits and starts over the whole week. This also means that you only have to tidy up once a week.
• You can “piggy back” off the advertising done by the larger estate agencies. The prospective buyers will be drawn into the area, and they will also come to your show house if your “on show” boards are prominently displayed.
• Our research has shown that more than 70% of visitors to show houses are a result of being drawn to the area/suburb, and not from a newspaper advert. We therefore believe that it is not necessary in most cases to advertise in your relevant property publication.
As mentioned earlier, the strategic placement of directional on show boards is a really important advertising tool. Please take note of the following:
• In most Municipal areas in South Africa, the boards are only allowed to be erected on Saturday and need to be taken down on Sunday evening. Under no circumstances may the boards be left up for any period of time.
• For maximum exposure, we strongly suggest that you place “directional on show” boards at all major/busy roads and intersections in your area. Additional “directional on show” boards should then “guide/point” from these points to your property. Wherever a change in direction is needed, place a “directional on show” board as close as possible to this intersection.
• If an estate agency is running a show house in close proximity, place a “directional on show” board as close to their board if at all possible.
• Place the “on show” board in front of your property
• The “private sale” board should remain in front of your property in as visible position as possible until your property is sold.
Erecting of boards:
• We suggest that wherever there is a lamppost/pole, you attach the board to the lamppost/pole using the inner eyelids. The best option is to use a thin rope.
• In the event of no suitable lamppost/pole, you need to mount the boards on the stakes. It is advisable to take a hammer or mallet for inserting the stakes. You need to try and find as soft ground as possible to insert the stakes into. It is advisable to insert the stakes in the ground before attaching the boards to the stakes. When inserting the stakes, be careful to place the stakes as close as possible to 60cm apart. Once both stakes are secure, you can attach the boards to the outer eyelids with cable ties.
• When taking the boards down, it is recommended that you cut the cable ties and separate the boards to the stakes. If you try and pull them out together, the boards could possibly get damaged.
Preparing the show house:
• The most important aspect is to make sure that your property is neat and tidy. This will encompass both the inside and garden (if applicable).
• If there are any unsightly areas (such as a wall that needs a coat of paint) that can re rectified easily and inexpensively, we recommend that you do this. Please however do not do this on the morning (or possibly the day before) if there will be a smell that will linger on until the show house. While buyers expect sellers to have tidied up, they might become suspicious if there are strong paint or other smells.
• When preparing the houses, concentrate most of your efforts on the area that the prospective buyer will first encounter. It is a proven point that the first impression is the most important.
• While we suggest touching up minor snags, we certainly don’t endorse doing touch ups on major problems such as rising damp etc.
The actual show house day:
• We believe that the advantages of the owner running their own show house far exceed the negatives. The chances are that you know your own house far better than any outsider. You will be able to answer any questions (relating to the house) that the prospective buyer might ask you.
• We believe that you should conduct the show house in as informal basis as possible. We don’t recommend “power dressing”, but rather something smart casual. The idea is to be as relaxed as possible, with the emphasis on being friendly.
• Make sure that all brochures are visible and where possible take down any visitors contact details.
• It is very important that all valuables are safely stored out of easy reach. Be very aware of suspicious looking people. Unfortunately some criminals have been known to target show houses.
• Always be entirely honest with all prospective buyers.When you get an interested buyer
• Decide at the beginning exactly what price you are prepared to accept. Never disclose this price to anyone.
• If you get an offer below this price, we recommend that you never counter offer. By counter offering you are revealing what price you are prepared to accept.
• Once you have agreed on a price, the offer to purchase/deed of sale document needs to be completed.
• If the buyer requires a bond refer him/her to No Agent's South African home loan services which offers a substantial saving to them.
Monday, 30 July 2007
How to get Pre-Approval for a Home Loan in South Africa
Getting a pre-approval on a home loan can considerable speed up the process of buying a home in South Africa. You will also be taken a lot more seriously if you can show that you can afford the house that you intend to buy. This articles gives a short overview of the process involved in obtaining a pre-approved home loan in South Africa.
Mortgage originators can help you select the best home lender and can obtain a pre-approved home loan on your behalf. A mortgage originator such as No Agent have online facilities where you can complete your home loan application in the comfort of your own home.
For the pre-approval process to be completed some essential information will be required. The home loan lender will require three to six months payslips or bank statements as proof of income and a income and expenditure report. This information will enable the home loan lender to determine your ability to pay the monthly bond installments.
A credit check will also be done to obtain information on the amount of credit inquiries and credit accounts you have behind your name and to check on your blacklist-status. The pre-approval home loan will be based on your credit scores and your ability to pay the monthly installments. A clear credit record and a high income with low debt will place the purchaser in a position to negotiate a good interest rate.
Although pre-approval does not guarantee a home loan, it will serve as an indication for the seller that the applicant in all probability will qualify for the required financing.
Mortgage originators can help you select the best home lender and can obtain a pre-approved home loan on your behalf. A mortgage originator such as No Agent have online facilities where you can complete your home loan application in the comfort of your own home.
For the pre-approval process to be completed some essential information will be required. The home loan lender will require three to six months payslips or bank statements as proof of income and a income and expenditure report. This information will enable the home loan lender to determine your ability to pay the monthly bond installments.
A credit check will also be done to obtain information on the amount of credit inquiries and credit accounts you have behind your name and to check on your blacklist-status. The pre-approval home loan will be based on your credit scores and your ability to pay the monthly installments. A clear credit record and a high income with low debt will place the purchaser in a position to negotiate a good interest rate.
Although pre-approval does not guarantee a home loan, it will serve as an indication for the seller that the applicant in all probability will qualify for the required financing.
Monday, 16 July 2007
Should you sell your property before you buy a new property?
Should you sell your property before you buy a new property or is it better to buy first and then sell? Many people prefer to buy the new property first as this makes them feel secure in knowing that they have a place to stay before selling their existing home. This is not necessarily the best option and their is a few things you need to consider before deciding on buying a property before your current property is sold:
Clearer Time FramesWhen you sell your property first your time frames become much clearer and you can use this to your advantage when negotiating the purchase of your new property.
Clearer BudgetAfter you sold your property you will have a much clearer picture of your financial position and you can make a more informed decision on how much you can afford to use as a deposit for the new property. You will also be able to budget more realistically for your new property.
Property Market FluctuationsBuying a new and more expensive property before your current property is sold can cause a sever financial crises. Property markets often fluctuate dramatically and you can be stuck in a situation where you are unable to sell your property for the price you require. You may end up with two properties and two bonds that you cannot afford to pay.
Better Offer on New PropertyIf you sell your property first you will be in a better position to make a clean offer with no conditions attached. This type of offer is usually much more attractive to property sellers and may even be accepted above an offer that is higher but has conditions attached to it.
Better Financial Position The positive equity realised after selling your property will place you in a financially stronger position and you will have a better chance of having your home loan application approved. Use No Agent Home Loans to apply for your bond and have your bond registration costs paid.
Although all these points make a strong argument in favour of selling your property first it is a decision that you have to be comfortable with and your current circumstances may dictate that you will have to purchase the new property first before selling your current property.
Clearer Time FramesWhen you sell your property first your time frames become much clearer and you can use this to your advantage when negotiating the purchase of your new property.
Clearer BudgetAfter you sold your property you will have a much clearer picture of your financial position and you can make a more informed decision on how much you can afford to use as a deposit for the new property. You will also be able to budget more realistically for your new property.
Property Market FluctuationsBuying a new and more expensive property before your current property is sold can cause a sever financial crises. Property markets often fluctuate dramatically and you can be stuck in a situation where you are unable to sell your property for the price you require. You may end up with two properties and two bonds that you cannot afford to pay.
Better Offer on New PropertyIf you sell your property first you will be in a better position to make a clean offer with no conditions attached. This type of offer is usually much more attractive to property sellers and may even be accepted above an offer that is higher but has conditions attached to it.
Better Financial Position The positive equity realised after selling your property will place you in a financially stronger position and you will have a better chance of having your home loan application approved. Use No Agent Home Loans to apply for your bond and have your bond registration costs paid.
Although all these points make a strong argument in favour of selling your property first it is a decision that you have to be comfortable with and your current circumstances may dictate that you will have to purchase the new property first before selling your current property.
Thursday, 05 July 2007
Guide To Buying Property in South Africa
The following are guidelines to help you buy a property in South Africa at an affordable price and to help you make an informed decision on which property to buy.
Research the property market
This means doing your homework by looking in the property section of local newspapers, property publications and internet listings. The internet has become an important tool with which to look for property for sale and you can easily compare various property for sale from the comfort of your home. Be sure though to use property sites such as NoAgent.co.za which have up to date property listings and not outdated listings which have been sold already as this can waste a considerable amount of you time. Compare the size of the property to the asking price and work out how much it will cost per square meter. Now you can compare the price of the property with other properties in the same area to find out if the property is a bargain. You can also look at previous property sold in that area to get a feel of what price you should be paying for the property.
Use an estate agent or sell your property privately
The advantage of using an estate agent is that they usually have a list of buyers which they match up with the property that appears on the market. But the Estate Agent will take a commission which can be avoided if you sell your property privately. NoAgent.co.za will assist you in selling and buying your property privately with features such as free listing of your property for sellers and notifications of property listed that meet your search criteria. They will then also help you complete the necessary documentation for the sale to be completed and NoAgent.co.za also offer home loans services where you can apply for a South African home loan. The savings that you make when buying property privately may just enable you to buy that property which you thought was financially out of reach.
Property owners motivation for selling the property
By understanding the property owner's motivation for selling one can often be placed in a better position to negotiate a bargain. Find out why the owners are selling the property. Do they urgently need money? Are they moving overseas? Have they bought another property already? You can often negotiate the price of the property lower if you know that the owner has some urgency in selling the property.
Eliminate overpriced property
If you have done your research as suggested in the first point you should be in good position to eliminate those properties whose prices are out of synch with other similar sized property in the same area. You usually will have little success negotiating a lower price with owners who overprice their property. If you have time on your hands you can often rather wait a month or two and approach these owners when the property has failed to sell at the original price.
Research the property market
This means doing your homework by looking in the property section of local newspapers, property publications and internet listings. The internet has become an important tool with which to look for property for sale and you can easily compare various property for sale from the comfort of your home. Be sure though to use property sites such as NoAgent.co.za which have up to date property listings and not outdated listings which have been sold already as this can waste a considerable amount of you time. Compare the size of the property to the asking price and work out how much it will cost per square meter. Now you can compare the price of the property with other properties in the same area to find out if the property is a bargain. You can also look at previous property sold in that area to get a feel of what price you should be paying for the property.
Use an estate agent or sell your property privately
The advantage of using an estate agent is that they usually have a list of buyers which they match up with the property that appears on the market. But the Estate Agent will take a commission which can be avoided if you sell your property privately. NoAgent.co.za will assist you in selling and buying your property privately with features such as free listing of your property for sellers and notifications of property listed that meet your search criteria. They will then also help you complete the necessary documentation for the sale to be completed and NoAgent.co.za also offer home loans services where you can apply for a South African home loan. The savings that you make when buying property privately may just enable you to buy that property which you thought was financially out of reach.
Property owners motivation for selling the property
By understanding the property owner's motivation for selling one can often be placed in a better position to negotiate a bargain. Find out why the owners are selling the property. Do they urgently need money? Are they moving overseas? Have they bought another property already? You can often negotiate the price of the property lower if you know that the owner has some urgency in selling the property.
Eliminate overpriced property
If you have done your research as suggested in the first point you should be in good position to eliminate those properties whose prices are out of synch with other similar sized property in the same area. You usually will have little success negotiating a lower price with owners who overprice their property. If you have time on your hands you can often rather wait a month or two and approach these owners when the property has failed to sell at the original price.
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