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Cape flats property market on the rise

17-09-2014

Despite rising interest rates putting pressure on the property market, especially in the middle to upper income bracket, and the market predicted to slow, the Cape Flats has defied this national trend and proven to be a prime property investment region.

Many buyers are realising the potential of this area and have explored the variety of investment opportunities.

It is not only first time buyers that are showing interest in the region but property investors are recognising that the demand for homes in these areas are high, and that buying a second and third home in this region is proving to be highly profitable.

Areas like Grassy Park and Strandfontein have presented Cape Town property buyers with an array of different investment possibilities.

An added boost to Cape Flats property has been the rental market. Home rentals have picked up and influenced the market with positive momentum.

Globally, affordable property investment is strongly recommended as a fantastic way to improve your portfolio as a property investor as well as ensuring great returns for first time buyers.

Mark Brickles

Owner – RE/MAX Ultra Select 

                                                                 

Lower income property market will not be affected by further rise in prime interest rate

04-09-2014
 
A prominent financial and property strategist has predicted that the prime interest rate in South Africa could rise to 9.5% by the end of 2014, and then to 10.25% by the end of 2015.

He cautioned that that this would possibly slow growth in residential mortgage credit demand and this could mean a slower average house price growth rate in 2015 compared to 2014.

The doom and gloom of this prediction will undoubtedly have an impact on the property market as a whole. However, the lower income property market will be somewhat shielded by these interest rate hikes as most properties being bought and sold in this market are not purely for investment purposes.

Property buyers and sellers in the lower income market usually are not buying houses as a second investment or to buy-to-let and are rather purchasing homes as basic need to shelter their families.

The lower income property market of southern suburbs in Cape Town has proven steady over the past six months and continues to grow.

This segment of the market might still be slightly vulnerable to economic fluctuation as banks will most probably tighten up lending criteria but it will still continue going from strength to strength despite the property market being under pressure .

 
Mark Brickles

Owner – RE/MAX Ultra Select                                                                                                                                                                                                                                                                       

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Will bank downgrades affect property market?

28-08-2014 
The downgrade of South Africa’s four largest banks by international ratings agency Moody’s will most likely see consumers paying more for loans as well as see banks apply stricter lending criteria and enforce more rigorous credit checks. The downgrade will most likely increase borrowing costs too.  

News that the Reserve Bank bailed out African Bank due to major losses, mostly because of bad loans, caused concern for many South Africans.

Banks implementing more stringent criteria to apply for home loans might drop the home loan approval rate and effect first time buyers, as first time buyers are more likely to depend on bond finance to fund a large portion of the property’s costs.

With the interest rate hike and downgrades rattling the banking sector banks are under a lot of pressure and this will undoubtedly translate through to the consumer.

It is likely we could see properties being on the market longer as bond applications are declined by the banks but this should not deter buyers from seeking finance.

  

Mark Brickles

Owner – RE/MAX Ultra Select

 


New bill to fast-track property registration welcomed

21-08-2014
The news that an electronic deeds registration bill will be introduced to decrease turnaround time and the registration of property is fantastic news. 

It should reduce turnaround times significantly which is beneficial for all concerned. The buyer can start paying his mortgage bond sooner thus saving on occupational rent; the seller can access their profits sooner as they often have to bridge finance when it takes long for transfer and they pay huge interest amounts on bridging finance. Service providers such as estate agents, electricians, plumbers and attorneys can access their fees quicker which is essential because cashflow is needed to run any business effectively.

It is however essential that the technology systems across all related government departments linked to the process are equally effective. It would be senseless if the Deeds Office increases efficiency but the rates clearance department remains slow.

Another concern is the potential for fraud by estate agents and attorneys. Attorneys will be scanning documents into the programme instead of producing originals to the Deeds Office. So loopholes need to be closed so people don’t lose their properties or get ripped off.

Therefore home sellers need to be prudent when selecting an estate agent and make sure he is properly registered with the Estate Agency Affairs Board.

Mark Brickles

Owner – RE/MAX Ultra Select

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