There's no rent increase ceiling
IolProperty - South Africa
The misconception about the percentage of rent increase allowed by law for residential tenancies still exists. This is related to the rent control legislation that regulated not only increases, but placed other restrictions on landlords and, in many ways, prejudiced bona fide tenants. The rent control controversy rages on in several countries but is barely referred to in South Africa.
In terms of the provisions of the rent control law, the landlord was prevented from increasing the rent by more than 10 percent a year and had to provide proof to the rent board of maintenance and repair costs. The powers of the rent boards became increasingly restrictive over the years and the law itself did not change sufficiently with the dynamics of a changing society.
Property Barometer - July 2014 House Price Index
FNB - South Africa
July 2014 House Price Index growth rate declined mildly again, as housing market’s growth momentum gradually slows
However, against some expected economic and household disposable income growth improvement, we expect the SARB to continue with its normalization of interest rates, which implies further hiking from abnormally low levels. Our forecast is for Prime Rate to rise further to 9.5% by the end of 2014, and then to 10.25% by the end of 2015. This in turn will imply some moderate increase in the Household Sector Debt-Service Ratio (the cost of servicing the Household Sector Debt Burden expressed as a percentage of Disposable Income), thus slowing growth in residential mortgage credit demand.
The resultant forecast for house price growth is a 7.3% average growth rate for 2014, the annual average being boosted by the above-8% house price inflation early in 2014, tapering to an average rate of 5.7% in 2015.
Golden rules for home buying
ReMax - South Africa
Not all property purchases are equal. This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says that while the emerging market conditions have created opportunities in today’s real estate sector, buyers need to be savvy and make the correct buying decisions if they want to get the most out of their property purchase in the future.
He notes that buying a property at fair market value doesn’t guarantee that healthy returns will be realised over the long term. While an emerging market phase is an excellent time to invest in property, Goslett points out that there are certain golden rules for any property acquisition that buyers would be wise to follow:
1. Do your research and ask questions
“The first question that buyers need to ask themselves is why they are buying the property. Is it for them to live in or is it an investment property? This changes the game and how they might view a property,” says Goslett. “If the property is for the buyer to live in, the purchase will be more emotionally guided and the things that will be important are the features and amenities that appeal to the buyer. However, if the property is for investment purposes it will be more important to research what will appeal to possible tenants in the area and who the tenants might be.”
BetterBond says buyers are still keen, despite rate increases
BetterBond - South Africa
The latest statistics from BetterBond Home Loans, SA’s leading mortgage origination group, show that the number of home loan applications received in July was actually 2% higher than the number received in July last year – despite the two interest rate increases that have been announced this year.
“This speaks to the ongoing strong demand for housing as the backlog built up after the 2008/ 09 recession continues to spill into the market,” says BetterBond CEO Shaun Rademeyer.
“There is more evidence for this as home prices continue to increase in the face of dwindling supply. According to our statistics, the average home price showed a year-on-year increase of 10,75% in July, when it reached R906 407. In the same period, the average home price paid by first-time buyers rose 7,63% to R639 071.”
Buyers still keen