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Property 24/10 - 7

22 April 2010

Govt to spend R16bn on housing
The South African Government is to spend R16bn on building new houses and human settlements for the poor in the next financial year.

"The bulk of this funding will go to the provision of housing subsidies to the bottom-most end of the market - the poorest of the poor, who earn between R0 and R3,500 a month," said Human Settlements Minister Tokyo Sexwale in his Budget Vote speech to Parliament on Wednesday.

"A large percentage of this is allocated to provinces in the form of Housing Development grants," he added. The Minister pointed out that there are currently 8,000 human settlements projects underway across the country, and that 219,000 housing units had been built by Government in the last financial year.
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Which factors are hampering recovery?
While the National Credit Act (NCA) is still hampering the much-needed recovery in the residential market, there are other factors putting equally big brakes on sales.

So says Laurie Wener, MD for Pam Golding Properties (PGP) in the Western Cape, who adds that "it is not necessarily the NCA which is hampering the recovery of the residential property market". "The banks' ongoing stringent lending policies are having a pronounced effect, particularly in areas which are mortgage-dependent.

"These are the suburbs where young families and entrepreneurs are trying to establish themselves - yet these very people who should be stimulating economic growth and creating new opportunities for employment are struggling to find the finance they need to put down roots. While we understand banks' conservative attitude towards risk, it is a great pity that self-employed entrepreneurs and even young professionals are finding it almost impossible to obtain mortgages at present."
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Put your HOA to the wellness test
If you live in a residential estate, it's essential to assess the health of your homeowners' association (HOA) from time to time in order to protect your property investment.

That's the word from Jeff Gilmour, president of the Association of Residential Communities (ARC), which is focused on assisting HOAs and bodies corporate to run estates, cluster developments and townhouse complexes more efficiently.

"Although most HOAs are run by a voluntary board of directors, every homeowner in the estate is actually a member and has the right to be informed about board decisions regarding the running of the estate and its finances.

"Consequently, the first vital sign for a healthy HOA is whether it is being managed inclusively and transparently. Board meetings should for example always be open to other HOA members that wish to attend, and there should be an owner forum at those meetings for ideas and feedback.
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House hunt the right way
House hunting can be a really tiring and stressful undertaking, but there are ways to ease the strain.

Adrian Goslett, CEO of RE/MAX of Southern Africa, provides some useful tips for a successful house-hunting experience.

Establish your budget
The very first thing that you need to do, before you even start looking for houses to buy, is to work out what you can afford and what size bond you qualify for. "There's no sense in shopping for a home until you have been given a good indication by a mortgage originator or your bank as to what range of finance you would qualify for. Knowing what price bracket you need to work in will immediately narrow your search," explains Goslett.
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Take the stress out of valuations
With the process of municipal valuations now well underway, many property owners may be experiencing anxiety about the potential impact on their property's rates and taxes.

But if owners participate fully in the process and do their homework properly, there is no need for it to cause undue stress, says Pam Golding Properties' (PGP) MD for the Western Cape metro region, Laurie Wener.

"There is always anxiety associated with this process. Based on past experience, many owners will have perceived a lack of consistency in the valuation process - with some properties being assigned realistic values compared to current market values, while others are significantly over- or under-valued. For this reason, it is essential for property owners to play their part in the process, to ensure that the final declared value is a fair representation of their property.
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Huge WC rentals unlikely - report
The tenfold rental profits that landlords were hoping to make during the few weeks of the Soccer World Cup is now unlikely to materialise.

This is one of the sombre findings in the Rental Payment Monitor report by the Tenant Profile Network (TPN) on the state of the rental market in 2010's first quarter.

"One such example is where over 72,000 bed nights were created, and just over 500 sold," the report said.

The report also pointed out that overzealous optimism led to many landlords not renewing or even cancelling leases with their quality long-term tenants.
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