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18 June 2015

SA rental market: landlords and tenants under pressure
Rising economic pressure on South Africans is proving especially true in the residential property rental market according to Louw Liebenberg, Group CEO of PayProp, who says with tenants suffering under the weight of their financial responsibilities, buy-to-let investors need to consider carefully the non-payment risk of a potential tenant.

He says each month of non-payment drops a landlord’s already meagre return by roughly half a percentage point. The financial argument for better tenant selection and looking after good tenants is now more relevant than ever, he says.

According to the PayProp Rental Index for Q1 2015, the current national average rental stands at R6 354 and has been on a steady upward curve above the R6 000 mark for a year. Liebenberg says the market has historically seen cyclical swings in average rental as the market finds a balance between what tenants can pay and what landlords are demanding.
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Real estate career: JLL property industry internships
With June being Youth Month in South Africa, JLL South Africa is highlighting the opportunities offered to promising young graduates through its graduate programme, contributing to upskilling talented youth in South Africa according to Tatiana Dinwoodie, Head of Marketing and PR at JLL, who says the JLL team shares its skills and market knowledge openly through internships offered to graduates seeking a career in property.

Running from January to December each year, the programme provides graduates with the opportunity to learn from the various specialised disciplines in the business, allowing them to obtain real property experience within the fee-earning departments in which they are placed. The interns get the opportunity to work in a different department for each quarter of the year for holistic exposure to the business.
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PDE estate agent workshops for over 60s
The Institute of Estate Agents, Western Cape, will be running workshops in Hermanus and Cape Town for those who are over 60 and need help with compiling their Portfolios of Evidence in order to apply for exemption from doing their NQF4 and NQF5 qualifications or their PDEs. These workshops will also help prepare for the 20-minute oral examination interview.

The workshops will be held on 12 June at the IEASA Training Centre in Pinelands from 10am to 2pm and 25 June from 1pm to 5pm at Bosko Hall, Fairways Ave, Eastcliff, Hermanus. The workshop costs R450 for members and R650 for visitors.

In order to apply for exception, agents must have held their Fidelity Fund Certificates (FFC) for a continuous period of five years, have a current valid FFC, and be 60 years or older.
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Can you buy property without a credit history?
With interest rates expected to start increasing later this year, the ideal situation is for consumers to live as debt-free as possible. This means no credit cards, vehicle finance or any other type of debt for any reason according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says while consumers who have high debt levels should try to pay down their debt as much as possible, and it is good advice to live debt-free, having no debt or credit history could be problematic for consumers who are looking to purchase a property.

He says as little as 5% of first-time buyers are able to purchase a home without requiring finance from a bank or lending institution. This is a very small percentage of the total number of first-time buyers in today’s real estate market. Very few buyers in general are able purchase a property outright and will need a loan of some kind, he says.
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Consumer protection and buying property in SA
Last year the Department of Human Settlements and its subsidiary, the Estate Agency Affairs Board (EAAB), were hard at work on the new Property Practitioners Bill (PPB), which is planned to accomplish the following:

- Convert the Estate Agency Affairs Board into the Property Practitioners’ Regulatory Authority (PPRA). Tighten up governance by the PPRA of estate agents who, in terms of the PPB, are to become known as “Property Practitioners”.

- Regulate home inspectors (also called property surveyors), who are now to be called Property Assessment Practitioners (PAPs). The PPRA is to regulate both training standards and the professional activities of PAPs.
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Reviewing your short term insurance policies
Your short-term insurance policies are automatically renewed annually, and often with an increased premium according Bertus Visser, Chief Executive of Distribution at PSG Insure, who says you should take the time to review your policies to make sure the cover still suits your needs.

Visser shares some key points to consider in the reviewing process:

Your personal details
It’s important to make sure your personal information is still correct on the policy schedule, for example, your contact details, postal and street address, email address and contact numbers. As your policy is month to month, check that these details are correct on a regular basis.
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When buying property think 'location efficiency'
It is often said that a potential homeowner should not spend more than 30% of his or her income on housing costs according to Dr Andrew Golding, chief executive of the Pam Golding Property (PGP) group, who says, however, there is a growing school of thought in America which suggests that this measure of affordability is incomplete, as it excludes any consideration for the second largest expense facing most households, namely transportation.

The American non-profit Centre for Neighbourhood Technology (CNT) suggests that potential homeowners consider housing and transportation costs in tandem since these costs are often inversely related to each other, depending on the location of a house. This then obscures the true affordability of a house. CNT argues that the most important affordability threshold is not the traditional 30% for housing but rather a 45% cut-off when the two costs are added together.
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