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Gauteng property in short supply
Gauteng is experiencing significant growth in the demand for residential property, to the extent that in many areas demand for homes is outstripping supply.
This is according to Dr Andrew Golding, chief executive of the Pam Golding Property (PGP) Group, who says significant infrastructure development, in addition to both residential property and commercial property development, is underway in Gauteng. He says this, plus the strong demand for homes in the region, would appear to indicate positive future growth in property transactions and prices.
Dr Golding says the residential property markets in Johannesburg and Pretoria have been more than resilient over the last 12 to 18 months, which includes renewed activity in the top-end of the market, with house prices in this sector showing notable growth.
Affordable home loans within reach
The Department of Human Settlements revealed that the housing backlog is rising. In 2001, the backlog was estimated to be 1.8 million houses; by 2011 it had risen to 2.1 million, and it is still rising.
Although the government has been broadening access to housing through subsidised schemes, millions of South Africans are still unable to achieve the dream of owning their own homes.
According to Nolwazi Nzama, head of Affordable Housing at Standard Bank, the reasons vary, but are mainly due to affordability and availability constraints. Although most banks offer home loans for the affordable housing market and are willing to provide finance to those who qualify, there are limited properties available in this range. And, due to their scarcity, their prices are high.
SA's top listed REITs companies
South African listed property once again ranked high among the country’s companies earning the most for shareholders.
The sector featured strongly overall, with a dozen Real Estate Investment Trusts (REIT) performing among the top 100 companies over five years, based on compound annual growth rate.
Laurence Rapp, chairman of the South African REIT Association and CEO of Vukile Property Fund, says South African listed property companies have performed well for investors and delivered sustainable, low-risk, inflation-beating results.
The sector’s top player was Resilient Property Income Fund again, which earned 30th place with a compound growth of 31.83 percent. Resilient was noted as an upward mover, rising from 38th position, and so was Hyprop, which improved from 67th to 60th with a compound annual growth rate of 22.41 percent.
Home loan tips if you are self employed
Applying for a bond when you’re self-employed can be a tedious process, unless you’re well prepared, work through a bond originator and understand the bank's specific requirements and procedures.
Banks are particularly cautious when assessing self-employed applications. Due to the fact that their income fluctuates and cannot be guaranteed, these individuals are considered a higher risk than salaried persons. Since the recession started in 2008, when the banks suffered huge losses, together with the implementation of the National Credit Act, they have become more particular in assessing self-employed applications.
In the current economic climate in South Africa, there are many self-employed individuals, and the banks appreciate the risk taken by individuals to generate income out of their own businesses, which is healthy for our economy. With more entrepreneurs starting their own businesses, banks understand this new home loans environment and appreciate that small businesses drive our economy, so they strive to assist in every way they can. The criterion to qualify is quite feasible for such individuals to achieve, who therefore may be able to qualify for a loan.
Pay off home loan or invest the money?
The higher interest rate cycle begs the question: is it currently better to use your investable funds to pay off your mortgage or to add to your retirement savings?
Recent interest rate hikes make the returns you earn on interest bearing investments somewhat more attractive. But this will be negated by the effect that a higher prime rate will have on your debt.
Ferdi Booysen, Head of Strategic Relationships at Old Mutual Wealth, says although it’s always hard to give an unequivocal answer given everyone’s unique circumstances, generally, the cards are stacked against early settlement of your mortgage when compared to increasing your retirement savings.
Impact of POPI Act on sectional title
The Protection of Personal Information (POPI) Act, which was published in the Government Gazette in November 2013 and is about to be enacted, could have far reaching consequences for South Africa’s sectional title industry.
This is according to specialist sectional title attorney and director at BBM Attorneys, Marina Constas, who says trustees and managing agents should act proactively to ensure that they comply with the provisions of the Act prior to it being signed into law. She says similarly, sectional title owners should be aware of their rights when it comes to the information that they give to trustees and managing agents.
In a technological age, which is governed by social media and characterised by aggressive consumer marketing, the over-arching aim of the bill is to protect individuals’ personal information from misuse. She says privacy is important because data and its relative worth to companies in the form of databases is enormous. She says this means there is a real chance that it will be abused. “Identity theft is another big problem. Even on a day-to-day level, excessive numbers of emails and incessant telephone calls go beyond being a nuisance.”