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Property 24/10 - 338

26 January 2017

'Boomers" revolutionising the retirement property market
Most of today’s grandparents are members of the ‘Baby Boomer’ generation, which is renowned for doing just about everything in life very differently from their parents - and all previous generations.

“And true to form, they are now also challenging the stereotypes of retirement, grand-parenting, and what type of home they are likely to live in as they age,” says Bill Rawson, Chairman of the Rawson Property Group.

Born between 1946 and 1964, he says these are the people who were responsible for rock ‘n roll, pop, disco, heavy metal and hip-hop music, space exploration, PCs, Pac-Man and the internet, peace protests, environmentalism, the civil rights movement and the fall of the Berlin Wall - all while raising their own families and, often, also caring for their ageing parents.
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Interest rates decision welcome news for homeowners
Today’s decision by the Monetary Policy Committee of the South African Reserve Bank to keep the interest rate at the current level of 7%, with home loan base rate of 10.5%, for the fifth successive meeting is most welcome news, says Samuel Seeff, chairman of the Seeff Property Group.

“A rate cut would have been much better, but we will take any good news that we can get at this stage,” he says. “We are seeing an overall property market increasingly feeling the pinch of the poor economic fundamentals and just too much negative political noise that is undermining business and consumer confidence.”

While the currency has stabilised, the December inflation rate climbed to 6.8%, up from 6.6% in November as it continues its stubborn breach of the 6% upper target range. This, says Seeff, is concerning for interest rate stability, the economy and further downward pressure on the property market.
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Are you ready for the 2017 property market?
Historically, there is always a lift in the real estate market in April, after prospective buyers and sellers have reviewed their finances and had a look at what is on offer.

This is according to Chas Everitt Nelson Mandela Bay principal, Charlotte Vermaak, who says she believes there are good things in store for the local property market in 2017.

“Although 2016 showed a slowdown in the property market nationally, prices here have held their own. And although everyone wishes they had a crystal ball to reveal what 2017 has in store, we can only go by our experience, observations and what economists are telling us,” says Vermaak. “Generally, economists are more positive about growth in 2017, and it’s reflected in the number of people investing in property and the fact that banks are keen to provide finance in the urban areas.”

Vermaak shares some insight:
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When is your rent due? The myths and truths revealed
In short… this article deals with the rights and responsibilities of a tenant in relation to the payment of rental.

1. Time for payment
There are rumours floating around that a tenant is automatically given 7 days to pay after the due date for payment - this is incorrect. You are in breach immediately after the due date for payment has arrived, if you have not paid by that time. This is stipulated in your lease. If you are doing an EFT, the money must reach the landlord’s bank account by the appointed date. You are still in breach of your lease if you have instructed that payment be made, but the payment has not reached the landlord’s account by the appointed date, or if you have made the transfer from one bank but the payment has not yet reached the landlord’s account by the appointed date because he banks with another bank.

2. Place for payment
You need to make payment to the landlord’s nominated account. Making payment into any other account or to any other person (for example, paying a plumber to do something that you wanted the landlord to do for you, or paying into the municipality’s account) does not count as payment to the landlord. Payment to a body corporate instead of the landlord, or to a hijacker or a “tenants’ committee” does not count as payment to the landlord.
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Should you use home loan equity to pay off debt?
Often car loans and credit cards accrue interest at a much higher rate than a home loan, which is why many people decide to take equity out of their home loan to pay off their other debts. Focusing on paying off debt with the highest interest rate is a very good financial strategy to implement, but is using a home loan to do it the best idea?

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that the answer to that question largely depends on the term left on the home loan.

“If the individual decides to pay off a big-ticket item such as a car by using the access facility on their home loan, they need to consider the fact that although the interest on a bond is generally lower, the term of the loan is much longer,” says Goslett. “Essentially, this could result in them paying more interest over the term of the loan.”
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