Monthly Archives :

February 2015

152 75 Prevance - Bridging Finance South Africa

Buying a home will get easier in 2015

prevance.png

Chas Everitt

Go to article: Buying a home will get easier in 2015

computer busStrong growth in the residential building sector over the next 12 months means that that home affordability is also all set to increase.

According to FNB household and property strategist John Loos, the square meterage of residential building plans passed showed year-on-year growth of 19,2% in the third quarter of last year and the square meterage of residential building completions is expected to surge this year by 21,6%.

And this, he says, is likely to be the highlight of the real estate year, as a substantial amount of new stock coming to the market will help to meet the huge demand that has been pent-up over the past few years, and thus keep house prices from rising too fast.

Meanwhile, we believe that falling food and fuel prices – and decreasing inflation – will improve the financial situation of many households in the coming 12 months and that this will also help to make property more affordable for many, even if the Reserve Bank continues to raise interest rates and salary increases are not stellar.

Of course, some areas are still likely to see the bidding wars, cash purchasing and lofty asking prices we have seen emerge in recent months, but many more will soon have enough affordable stock available to enable ordinary families to get back into the market in a meaningful way.

What is more, as prices stabilise, we expect a lot more sellers to moderate their own expectations instead of holding out for unrealistic prices, and that this will give the market even more momentum.

And finally, we think it is going to get a little easier to obtain home loan approvals. By no means are we expecting the mortgage free-for-all of the last real estate boom, but we do think that the banks will look more kindly now on those who have taken the trouble to clean up their credit issues over the past few years, and that deposit percentages could well decline.

Author: Barry Davies
Taken from: Chas Everitt

152 75 Prevance - Bridging Finance South Africa

Chas Everitt

prevance.png

Chas Everitt

Unknown-6Although there has been much discussion about the tax increases announced in this year’s Budget, we at Chas Everitt think it is actually one of the best Budgets in many years, not only from the property market perspective, but in terms of the potential it has to really improve the lives of ordinary South Africans.

Despite the major hike in the fuel and road accident fund levies, for example, I really got the sense when Finance Minister Nhlanhla Nene was presenting the Budget that government has really heard – or is at least starting to hear – our concerns about service delivery problems, public service indifference and corruption at every level, and is trying to address these issues.

And if that is so, it will do much to lift consumer confidence and encourage positive participation and investment in the economy, as well as entrepreneurship and the creation of more small businesses. (Which is obviously what the Minister was hoping for too in making the provision for much lower taxes on small enterprises with a turnover of less than R1m a year.)

Meanwhile, there was also much more money in the Budget for housing, health, education and the urgently-needed revitalisation of our cities and metros to cope with rapid urbanisation – as well as job creation initiatives in the labour-intensive construction, manufacturing, tourism and alternative energy sectors.

And if these initiatives are also allowed to start producing results, much of the current pent-up demand in the property market will be released as more people are able to earn an income and buy their own homes.

All of which puts the transfer duty changes that were also announced on Budget day into clearer perspective. By doing away with the duty on pre-owned homes costing less than R750 000, the Minister was obviously hoping to make things even easier for first-time buyers, and create a knock-on effect as existing owners are then prompted to upgrade.

And this would be positive for the whole country, not just the real estate sector, as a healthy demand for residential property is still one of the best indicators of a healthy economy where it is safe to invest.

Which is of course just what we all want the international ratings agencies such as Moody’s and Fitch to tell the world, so that all the new wealth being created around the globe – or at least a good slice of it – will be invested in South Africa and help us to grow and develop even faster.

Warm property regards,

BERRY EVERITT

Managing Director

Head Office : 011-274-1700