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24 March 2016

House Price Growth Dipping Below Inflation Rate - Ooba
Although ooba’s property statistics for February indicate year-on-year growth in house prices, slower year-on-year price growth trends are emerging. The Average Purchase Price is up by 4.3% to R1 047 277, while the Average Purchase Price of First-time Buyers increased by 4.6% to R801 144.

Rhys Dyer, ooba’s CEO, says at 4.3%, growth in property prices is currently below the inflation rate, which translates to negative growth in real terms. “The less buoyant property market correlates with expectations of slower real economic growth and rising interest and inflation rates, which affect both consumer and business confidence.”

The deceleration in property price growth rates can be seen in the month-on-month Average Purchase Price, which is down -0.7%, while the Average Purchase Price for First-time Buyers recorded a nominal 0.1% increase.
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Home Loan Subsidy for Households Earning Under R15k
The Institute of Estate Agents of SA (IEASA) Western Cape has been actively involved in educating the public and estate agents about the Finance Linked Individual Subsidy Programme (FLISP), a home loan subsidy for those whose gross combined household income was between R3 501 to R15 000 at the time of the home loan approval.

Time is running out to submit applications, and Annette Evans, general manager of the Institute Western Cape, says estate agents should notify all of their clients who purchased a property from March 2015 to date to submit a FLISP application before the end of March 2016. These retrospective dates apply purely to the Western Cape Province.

The good news is that any subsidy granted via this programme by the Department of Human Settlements exists to encourage homeownership and will never need to be repaid. This is a huge opportunity for agents to offer a value-added service to their clients, says Evans.
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Investing in property top of the list for South Africans
The total value of sales in the South African housing market has been steadily increasing, with an 8.3% increase in the value of residential property transactions from 2014 to 2105 despite gross domestic product (GDP) growth remaining very low, new vehicle sales plummeting, and an increasingly aggressive upward interest rate cycle.

This is according to Paul-Roux de Kock, analytics director for Lightstone, who says 50% of residential properties are located in the Western Cape and Gauteng, accounting for more than two-thirds of the total residential market value.
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Extra IEASA property update session on 30 March
Due to popular demand, with the morning session being fully subscribed, IEASA, Western Cape, will be repeating their Property Update session on 30th March 2016 in the afternoon from 1pm to 4:30pm. This will be held at their training centre in Sheldon Way, Pinelands.

“We are pleased to invite all property professionals to attend this update, which will prove to be very informative for all. Continuous Professional Development (CPD) non-verifiable points may be utilised for both 2015 and 2016,” says Annette Evans, general manager of the Institute Western Cape.

Attendees will receive e-certificates for three non-verifiable CPD hours.
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Should you invest your money in property or shares?
Investing in market shares can be a lucrative venture, particularly when market conditions favour the investments you’ve made, but investing in property is an alternative to be considered.

This is according to Charles Vining, Seeff’s managing director in Sandton, who says property held for five years or more before being sold for profit may not always yield enormous profits, but seldom loses value. It is perhaps not as exciting or lucrative as share trading in some instances, but it is a “safe bet” in the medium to long term.

“Using Kumba Iron Ore as an example - it may have recovered in recent weeks, but it would not have been a good investment at all if you had purchased R3 million worth of shares five years ago and sold it earlier this year,” he says.
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Tips for buying property on auction
With the economy in slow-mode, the number of property auctions is expected to increase - along with the number of prospective buyers looking for “bargain” homes at prices below market value. However, Jan Davel, MD of the RealNet estate agency group, says buying a house or flat on auction can be a risk for inexperienced home buyers.

“If they do not know much about the area in which the property is situated, for example, or about current market trends in this area, they run the risk of overpaying,” he says.

“So the first thing that buyers who are considering an auction property should do is seek the advice of an experienced estate agent that is familiar with the area and able to provide a comprehensive market analysis (CMA).”
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