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Showing posts from January, 2014

CAN SA EXPECT ANOTHER PROPERTY BUBBLE?

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CAN SA EXPECT ANOTHER PROPERTY BUBBLE? This is the title of an article on Moneyweb by Anne-Marie Smith. http://www.moneyweb.co.za/moneyweb-property/can-sa-expect-a-property-bubble The basic premise of the article is summed up in the first few lines of the article: Economists around the globe, are warning that history maybe repeating itself far too soon and a global property bubble may be on the horizon. Various indicators point to property bubbles bursting with a major driver being low interest rates, which fuels consumer spending as it facilitates greater affordability of mortgage repayments. So says Jacques du Toit, Chief Economist at Absa Bank. He says a property bubble is defined as growth in property prices are above the medium- to long-term average, as well as the presence of extremely high levels of property investment and speculation activity. What planet have you been living on??? Certainly not Planet Earth ... or more precisely Planet South Africa.

Interest rate hike will pinch

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Interesting quote at the end of the article below: Cosatu spokesman Patrick Craven said: 'It is a knee-jerk reaction to the fall in the exchange rate of the rand against other currencies and the imagined threat of rising inflation .' Some say "imagined threat of rising inflation"  ...  I would rather say: "economic forecasting by trained professionals based upon the abundance of data available".  WHICH WOULD YOU CALL IT? Sure - economists get it wrong from time to time but I doubt that they base their conclusions on mere imagination??? Gareth Shepperson Commercial and Property Attorney Interest rate hike will pinch South Africans already biting the economic bullet should brace themselves for even tougher times. This is especially the case for those with a bond on their home, or who are paying off a car, personal loan or credit card. The interest rate was increased for the first time in almost six years yesterday.

Durban's Warwick plans get green light

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It is always a conundrum when faced with having to relocate people in order to advance the development of an area. My personal belief is that one should look at what will serve the greater number of people best and the adequately accomodate (or even compensate) those who may be adversely affected. Gareth Shepperson Commercial and Property Attorney Durban's Warwick plans get green light The eThekwini Municipality has put the development of the Warwick Triangle back on track - four years after facing an angry backlash from Early Morning Market traders who objected to plans to build a R400 million mall on the historic site. Yesterday the city asked a full sitting of council to approve plans to spend R123m on constructing pedestrian links, building hawker trading platforms and a sheltered taxi rank at the precinct.

Housing institutions struggle

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Housing institutions struggle Social housing institutions in South Africa are facing enormous challenges in meeting tenants' demands. First, the demands for adequate, habitable and affordable rental accommodation and, after tenants have settled in, demands for disclosure of the actual money the institutions receive from the government, for transparency and accountability. The institutions receive a subsidy for the building they own so that they can provide reasonable rental for upper-end low-income earners. Most institutions are thorough in providing detailed information to the prospective tenants about the rental accommodation they offer and the implications of the lease contract.

Pretoria tramlines to be marked with memorial

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I love looking at history and I find the early pictures of Pretoria absolutely fascinating to look at.  I am only sorry that in SA over many decades we have shown a preference for bashing things down and replacing them with something shiny and new. It is only in the past couple of decades that legislation has been enacted to protect our heritage. I know that some of my Property Developer clients find this "heritage stuff" a huge pain in the neck and an obstacle to their developments but I believe the Heritage Legislation is essential in preserving what we have in SA before it's gone forever. The implimentation of this legislation could, however, be more practical and effectively administered. Gareth Shepperson Commercial and Property Attorney Pretoria tramlines to be marked with memorial A set of tram tracks, dating back about 105 years and unearthed during excavation work on Church Square, is to be preserved in a memorial near where they were foun

Property market dreads rate hike

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Hopefully, Ms. Marcus will have mercy on us all ... especially those involved in the property sector. It is easy to blame AMCU, corruption, etc but (unfortunately) we seem to be at the mercy of international winds of change, which are difficult to predict and impossible to redirect. Gareth Shepperson Commercial and Property Attorney Property market dreads rate hike The mild improvement in the residential property market is likely to be nipped in the bud if interest rates are increased this week or later in the year. Fears about rising inflation caused by the recent sharp depreciation of the rand have resulted in increased speculation of an interest rate hike at this week's meeting of the Reserve Bank's monetary policy committee (MPC).

New rule could help home loan defaulters

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I have been an advocate for this for many years.  I am pleased to see that (hopefully) something is being done about this ... at last. Gareth Shepperson Commercial and Property Attorney New rule could help home loan defaulters Proposed changes in court rules that will make it impossible for creditors to sell the homes of defaulters for a pittance, still leaving them deep in debt and homeless, would greatly alleviate the suffering of deeply indebted South African consumers. This is according to Neil Roets, chief executive of Debt Rescue, who said it had become common practice for especially banks to sell off property of credit defaulters at auction, often for 'ridiculous' prices. 'The likely change in these rules could see a reserve price being set for the sale in execution of defaulting debtors' homes. This will avoid the consumers being left without a home and with little relief for their outstanding debt,' Roets said. The idea behind explorin

Joburg targets illegal businesses

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I can't recall which New York mayor it was (maybe Gulianni), who tackled ALL crime (both petty and serious) and this resulted in a significant reduction in crime in that city. You can NOT selectively apply the law and expect the general populace to respect (or fear) the law.  There are so many illegal structures (houses and businesses) scattered throughout our cities here in Gauteng that merely "picking on" one neighbourhood will not solve the problem ... you only relocate it to another location. ALL by-laws need to be enforced in order to create a culture of respect for property related laws. Gareth Shepperson Commercial and Property Attorney Joburg targets illegal businesses Illegal businesses in Melville and Greenside are to be cleaned up by the City of Joburg in a sustained six-month project. The Mellville and Greenside business districts have been in decline. Region B director Vicky Shuping said there was a lot of non-compliance of by-laws

Inflation holds back mortgages

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Once bitten ... twice shy? Are the banks still caught up in the mindset of the Meltdown. It has long been my contention that the Global Meltdown was intiated by the US property market (in particular the sub-prime market) and it will be the increased health of the US property market that will signal the arrival of a post-meltdown property market.  The stats out of the US have been encouraging for quite some time now. The are three question in my mind, namely: 1. Where exactly in the cycle the US property market finds itself?  (Will tapering affect the cycle?) 2. What is the lag time between the US and SA property markets likely to be? 3. What is the appetite of SA Banks? There is some analysis of question number 3 in the article below. Gareth Shepperson Commercial and Property Attorney Inflation holds back mortgages Muted demand for mortgages as South African consumers grapple with higher inflation and sluggish economic growth is signalling tepid bond iss

Survey shows most connected suburbs

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Survey shows most connected suburbs Who are the most net-connected people in South Africa? Which suburb has the highest web addiction? A new survey has produced some expected, and some surprising, results. The people who live in Ruimsig on the West Rand are the country's leaders when it comes to internet logging on, with 72 percent of them saying they go online at least once a week. Next highest is not, as many might expect, Sandton - it is central Pretoria, where 69 percent of residents hit the Net at least once a week. Third in the province, and nationally, is Fourways, where 68 percent of people do the weekly Web wobble.

Student quarters at a premium

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Student quarters at a premium Private residences are being inundated with applications for student accommodation this year, amid shortages of residences at tertiary institutions. 'We are fielding an unprecedented number of calls from students desperate for quality, affordable accommodation close to campuses,' says Rob Wesselo, managing partner at International Housing Solutions (IHS), which has one of the largest private student accommodation portfolios in South Africa. Wesselo says that as students get ready to go to universities and colleges, thousands are realising that securing a coveted place on a tertiary campus is just the first hurdle, and that finding a place to live and study poses challenges of its own.

New passengers overwhelm Gautrain

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My wife travels on the Gautrain during peak hour on a daily basis and I can therefore confirm the overcrowding that takes place. In particular, the busses in Midrand are extremely overcrowded.  During the December special promotion, the situation was so bad that on one occassion a pregnant woman had to demand that she be let off the bus because she was so badly crushed.  There are legal limits to the number of people that a bus can accomodate.  Therefore the actions of Gautrain are illegal.  This not only opens them to claims in the event of injuries but, even worse, the overcrowding may result in tragic and avoidable deaths! Gareth Shepperson Commercial and Property Attorney New passengers overwhelm Gautrain Passengers saw the Gautrain as a reliable and safer travelling option in the beginning, but now peak-hour users say their experience has turned out to be the opposite. They have begun using phrases like 'as bad as Metrorail trains' and 'world class

FNB: Home affordability a challenge

FNB: Home affordability a challenge Home affordability may become more of a problem in 2014 with a slightly higher house price growth and a struggling labour market, First National Bank said on Thursday. FNB's household and property sector strategist John Loos said after six years of improving residential property affordability this trend might be reversed mildly in 2014. 'This is based on our view that 2014 will yield higher house price growth in a supply constrained residential market, interest rates will remain unchanged, and average employee remuneration will show weak growth in an economy not showing any significant employment growth,' Loos said in a statement.

Standard Bank victim of property fraud

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Wow!!! For someone whose living depends on this system working efficiently, this is astonishing. My staff and I were just sitting and chatting about this article. The consensus of opinion is that this must have been done by a person or persons with an intimate (even expert) knowledge of the processes involved in Conveyancing Practice. Even so, they must also have "expertise" in document forgery or IT to replicate some of the documentation involved. Obviously, creating a false ID is no easy task but we all know that it can be done. Similarly, forging the SARS Transfer Duty Receipt would be extremely difficult. Investigation is at a sensitive stage according to the article but I (and my staff ... and many others in conveyancing) would be very interested in who these people are - if and when arrests are made. Gareth Shepperson   Standard Bank victim of property fraud In a sophisticated case of fraud and identity theft, fraudsters with an intricate knowledge of the

Opposition to Somerset West housing estate plan

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Opposition to Somerset West housing estate plan Property developers are planning to build an upmarket housing estate and a huge private school of more than 1 800 pupils near Somerset West - outside the urban edge. The entrance to Hathersage. The proposed development, with 153 upmarket houses, is planned for the foothills of the Schapenberg between the Hottentots Holland and Helderberg mountain ranges, near Vergelegen and Morgenster wine estates. The 52ha development on the Hathersage farm will straddle the Lourens River, which is protected as the Lourens River Protected Natural Environment. The developers call the housing section an 'upmarket lifestyle estate'. This is yet another development planned to be built outside the urban edge, the line defined in the City Council's spatial development framework to contain urban sprawl, to keep the costs of services down, to protect sensitive natural environments and to prevent valuable agricultural land from being covered

Zindzi Mandela incurs neighbours' wrath over noise

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Zindzi Mandela incurs neighbours' wrath over noise Zindzi Mandela is involved in yet another controversy. Her neighbours are complaining bitterly about the noise coming from the property she is renting in the upmarket Sandton suburb of Atholl and have called out the police three times since Christmas Day. Mandela's rented property in Atholl, Sandton. A neighbour, who asked not to be named, said the noise was unbearable. 'It goes on all the time, sometimes until 3am - there is music, shouting and cars starting and stopping nonstop. They sometimes quieten down after the police leave, but often it resumes soon after they leave,' he said. The Star visited the house, in an attempt to get comment from Mandela, but there is no bell to summon anyone to open the gate. The owner of the house, Panico Protopapa, in 2010 threatened to evict Mandela because of R200 000 in unpaid rent. She was paying around R32 000 a month. At the time, Mandela claimed in court papers that

Reduced parking proposed for property developments

Reduced parking proposed for property developments The City of Cape Town's draft parking policy encourages developers to create fewer parking bays so that tenants will be encouraged to use public transport. It will also introduce clamping for parking transgressions, and allow for a new parking tender that will enable better enforcement of regulations. Speaking on 567 CapeTalk, the city's mayoral committee member for transport for Cape Town, Brett Herron, said: 'It's about taking what is happening and refining it to make it work better.' Main categories defined in the draft policy are on- and off-street parking, park-and-ride facilities, loading bays, bus bays, and parking permits/ reserved parking. Each category experiences specific issues, which need to be dealt with. He said the city was under pressure from developers to reduce the parking requirement, especially for low-cost housing projects close to transport nodes. On-site parking requirements encou

Less than half of buyers in suburbs are white

Less than half of buyers in suburbs are white The racial transformation of suburban residential areas has progressed well, with white buyers making up less than 50 percent of residential buyers for the first time last year, according to FNB. White buyers last year accounted for an estimated 48.5 percent of total purchases in suburban residential areas from the estimated 57 percent in 2005, when FNB first introduced this question into its quarterly estate agent surveys.

Neighbours ask permission to tear down Houghton property walls

Neighbours ask permission to tear down Houghton property walls Zindzi Mandela, who owns a R2 million house in Houghton, has had her property vandalised and invaded by squatters. Neighbours in the upmarket Joburg suburb are complaining bitterly that the house is drawing bad elements and crime into the area and that it is devaluing their own properties. The complainants did not want to be named, but said the pavement outside Mandela's house is filled with rubbish and 'rats are running wild in the thick undergrowth'. People urinate and throw rubbish onto the pavement. 'We have complained, but nothing gets done because an influential family owns it,' said one neighbour.

Property developer 'copyrights' plans to prevent insight by neighbours

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Property developer 'copyrights' plans to prevent insight by neighbours Neighbours of an almost completed residential building in Morningside, Durban - who secured a high court interdict stopping further construction pending a judicial review of the city's approval of building plans - are going back to court this week to try to force the city to give them copies of the plans. The building under construction in Montpelier Road. The case - in which the city claims the plans are 'copyrighted' and it cannot copy them or distribute them - could affect the rights of litigants in other similar matters.

Solutions for property owners in financial distress

Solutions for property owners in financial distress "While the South African economy has seen much recovery and shown vast improvement since the recession, many property owners are still finding themselves in distress and facing tough financial times due to the rising cost of living, among other factors.

Higher incomes now needed to qualify for bonds

Higher incomes now needed to qualify for bonds According to the latest statistics from BetterBond Home Loans, home buyers now need to earn a gross monthly income of about R30 000 to buy an average home costing about R952 000. The BetterBond figures also show that 64 percent of buyers have to pay a deposit to secure a home loan, and that the average deposit required for a home priced at R952 000 is about R99 000 - or 10.4 percent. 'This puts the average home loan required to buy such a home at R853 000, and the average monthly bond repayment at just more than R7 400,' says BetterBond chief executive Shaun Rademeyer.

Alternatives to a fixed rate mortgage bond

Alternatives to a fixed rate mortgage bond With the rate of inflation still 'uncomfortably high', according to reserve Bank Governor Gill Marcus, many property owners and buyers are starting to worry that the current low interest rates can't last, and wondering whether the time has come to fix their home loan rate. 'This is sometimes a good idea for people living on a fixed income or first-time buyers who want to be able to budget accurately for the first few years of home ownership,' says Jan Davel, managing director of the RealNet estate agency group.

Global property prices are now above pre-crisis levels

Knight Frank's Global House Price Index, which tracks mainstream residential prices in 53 countries, as well as Dubai and Hong Kong, has exceeded its pre-financial crisis high. The index now stands 4 percent above its previous peak in the second quarter of 2008 and 12.7 percent above its financial crisis low in the second quarter of 2009.

Cape Town to spend R1.2bn on housing projects

Cape Town to spend R1.2bn on housing projects The City of Cape Town has approved R1.2 billion to fund seven housing projects over the next five years. Tandeka Gqada, mayoral committee member for human settlements, said yesterday the council gave the go-ahead on December 4 for the expenditure and that it would increase the city's housing delivery. The city was responding to an extremely high rate of urbanisation, she said.

Real property prices rise slightly after years of decline

Real property prices rise slightly after years of decline The average house price increased by 6.8 percent last year over the average price for 2012, says the FNB House Price Index released on Monday. This was a slight slowing in growth on the revised 2012 average house price growth of 7.1 percent, FNB household and property sector strategist Johan Loos said. In real terms - when adjusting house prices for consumer price inflation - last year showed a 0.8 percent rise, compared to 1.3 percent in 2012.

'Understand the macro-economic factors behind the property market'

'Understand the macro-economic factors behind the property market' There are a number of external factors that affect the property market and changes its dynamics. Insight into these key factors behind the market will assist potential homeowner make informed property purchase decisions, says Adrian Goslett,of RE/MAX of Southern Africa.

Traffic snarl-ups in store for Pretoria motorists

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Traffic snarl-ups in store for Pretoria motorists Pretoria Motorists should brace themselves for huge traffic jams in the city centre following the holiday season.  The Tshwane Metro council has started off the week by digging holes in Thabo Sehume Street in the city centre.  Trenches that had been dug up for the construction of the A Re Yeng Bus Rapid Transit (BRT) were quickly covered last month following Nelson Mandela's death. A cortege carrying Madiba's body passed through the city daily from 1 Military Hospital in Thaba Tshwane to the Union Buildings, resulting in road construction being suspended.

Living standards statistics show Joburg is tops for earning

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Living standards statistics show Joburg is tops for earning Residents of the eThekwini metro are most likely to have passed Grade 12, but are least likely to have settled their bonds. And while people employed in Joburg will earn more in a year on average than in any other major city, Cape Town has the fewest jobless. These are among the statistics compiled by the South African Institute of Race Relations, which give insight into standards of living in the country's eight metros.

Joburg property valuations will be known soon

Joburg property valuations will be known soon Joburg residents who objected to the recent property valuations will start receiving the outcome from the City of Joburg this week. About 88 000 objections were received from residents. City revenue department spokesman Kgamanyane Maphologela said the outcome of the municipal valuer decisions would be posted to objectors in batches and the first batch had been sent.

Debt levels will put the brakes on price growth

Debt levels will put the brakes on price growth Property prices will rise in 2014 in the face of a growing shortage of stock, but increases will be tempered by affordability constraints, says Richard Gray of Harcourts. 'A year ago, there was an oversupply of property, but this has largely been sold, especially in the metropolitan areas, and we are actually experiencing a shortage of homes to sell in many of the most popular suburbs,' he says.

Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!