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January 2019

150 150 Prevance - Bridging Finance South Africa

Predicted change is here

Herschel Jawitz, CEO of Jawitz Properties, Chris Renecle, MD of Renprop and Dr. Andrew Golding, chief executive of the Pam Golding Property group, do all agree that the residential market is in for an interesting time in 2019 in South Africa.

Even though the majority in the country feel that things will continue to decline the enlightened among us states that all predictions for the year are positive. They believe that home buyers and investors who take the plunge and buy early will be well-rewarded. Buyers and investors should not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains, states Berry Everitt, CEO of the Chas Everitt International property group in his article in BizCommunity.

This is, of course, terrific news for developers.

There is renewed confidence in buying property, especially in the major metros. Prospective buyers are moving closer to schools and parents change jobs to be closer to their homes. Gone are the sluggish real estate market of 2018. 2019 proves to be energised as the market and banks are more lenient towards the buyer.

2019 is the year for changes in the real estate market. Buyers and sellers, tenants and landlords can transact easily. Technology is being harnessed to allow a positive response to long-held client frustrations and traditional ways of business are being challenged. If we do not think differently, we will be left behind in this ever-changing world which is good news for end-consumers.

“Property transactions are going to be managed more efficiently and with greater transparency. They will be easier and less expensive. I don’t believe that systems and technology will replace real estate professionals; the circumstances around property transactions are too diverse, convoluted and unpredictable. I do believe that we have an opportunity to augment the skills of our real estate professionals using technologies, thereby delivering a far better level of service to our clients. This prospect is what I most look forward to in 2019.” Says Paul Stevens, CEO of Just Property Group Holding (Pty)

“If a buyer gains the post-election jump in the value of their property now, they will enjoy the benefits of smaller monthly bond repayment. This means that they stand to derive the maximum possible advantage out of the strong market recovery that they foresee taking place over the next four years.” Berry Everitt, CEO of the Chas Everitt International property group states

Although we are being subjected to increasingly loud and distracting political in-fighting ahead of the General Election in May, it is not surprising that many prospective buyers and investors are deciding to ‘wait and see’ how things turn out before making any further commitments to the market.” Berry Everitt concludes.

“One thing is for sure, now is not the time to delay residential property developments or put things on hold because of a shortage of cash,” says Prevance marketing manager, Christo Jonker. “We understand the day to day challenges which developers face. Often the biggest frustration for property developers is to obtain the final approval certificates or regulations from government council departments which is of the essence to be able to transfer to end- user buyers and this extends to cash flow issues. As the adage says, the best-laid plans of mice and men often go awry, and for this reason, its important to have a solid backup system in place because money worries should be the last thing on any developer’s mind.”

Jonker adds, “Our products have been developed through our vast experience in this important sector and we are immensely proud of the services we offer. Our team understands that speed is of the essence when dealing with short term finance solutions and our products have been specifically designed to not only allow developers access to cash in the shortest possible time but also to offer an array of options tailor-made for developers’ needs.”

In order to qualify for Prevance’s short term property finance the developer should:

  • Provide security in the form of a first mortgage bond of a property’s worth ± twice the
    value of the loan required, which need not to be the land being developed;
  • Should have invested his own funds into the development;
  • Demonstrate the viability of the project;
  • Should have a proven track record; and
  • Have obtained all relevant zoning regulations/certificates obtained.

As Prevance prides itself in giving a quick answer to all applications and makes the funds available soon after approval, the solution provided by Prevance is specifically for a short- term requirement and should be repaid within a few months. This limits the interest cost.

Those who meet the criteria could qualify for as much as R7-million per phase of development.

“The beauty of applying for short term property finance through Prevance is that each application is assessed on its own merit by our highly experienced team. There are no finance raising fees – in fact, there are no hidden costs whatsoever. Our wide range of services includes providing end-user finance via our in house mortgage originator, Prevance Bonds as well as assistance with banks’ pre-valuations” says Jonker.

“Assistance in obtaining zoning rights and other regulation certificates can be provided by the added value service of our professionals with whom Prevance has a relationship and whose credibility is valued. This extends to assistance with a feasibility study of the entire project.” Jonker explains.

“We have a proven track record in the short-term property finance field and our products have helped numerous small to medium developers across the country to overcome cash flow issues. Part of the reason for this is that we don’t micromanage the project as long as the funds are utilised by developers to kick-start, continue or complete a project.”

“We, like the rest of the country, are excited about the changes in South Africa and are looking forward to a more vibrant economy that will be aided by an increase in development projects.” Christo Jonker, sales and marketing manager, Prevance.

To meet the people at Prevance, watch the Videoclip https://youtu.be/MJBDkEhXIfo or take a moment to visit our website: www.prevance.co.za for all the required information you will need to access the Prevance solution best suited to each developer. Dont forget to visit our Facebook page at https://www.facebook.com/PrevanceCapital for interesting and informative snippets we share on a regular basis.
For more information call us at 0860987987

 

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    150 150 Prevance - Bridging Finance South Africa

    Residential market in for an interesting time

    Berry Everitt, CEO, Chas Everitt International property group

    South Africa’s residential market is in for an interesting time in 2019, but our predictions for the year are all positive, and we believe that home buyers and investors who take the plunge and buy early will be well-rewarded. Buyers and investors should not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains.

    With the US/ China trade war and the ongoing Brexit saga dominating the news, many investors around the world are just sitting on the sidelines at the moment and waiting to see how things turn out. But SA is actually benefiting from the current situation, with the weaker pound and dollar being good for the rand, and oil prices at very low levels. This helps to contain inflation, lowers the likelihood of another interest rate hike at the start of the year, and is a positive for economic growth and job creation.

    Increase in the demand for rental homes

    It is also expected to give a further boost to local home demand and sales, but as things are, the banks are keen to lend to home buyers, household debt is at a 10-year low and recent statistics from Lightstone and BetterBond show that SA is already quietly gaining about 77,000 new home owners a year. Urbanisation is also happening at a very rapid rate, and developers are anticipating a concomitant increase in the demand for rental homes by planning more than R40bn of new private sector housing over the next two years, most of which is sectional title flats and townhouses (StatsSA).

    Taking a broader view, the softer stance that the US Federal Reserve is now taking on interest rates is also good news for SA as it means that international investors may be more willing to invest here without the Reserve Bank raising rates. And the proof of SA’s attractiveness as an emerging market is in the fact that it has taken President Ramaphosa and his team just six months to reach the halfway mark on what was supposed to be a five-year quest to attract $100bn worth of foreign and corporate investment.

    Job creation

    Perhaps even more importantly, the president has also secured pledges from business and labour to help create at least 275,000 new jobs a year for the next five years, and already set in motion all sorts of programmes to repair infrastructure, restore municipalities and basic services, make education accessible and relevant, and address major deficiencies in healthcare.

    We also have a finance minister now who is firmly committed to containing government spending and bringing down the national deficit, so although it is probably going to be a long road back to prosperity for SA, there is a growing confidence that we are definitely going in the right direction, even among the ratings agencies like Moody’s and S&P.

    However, much of this positive outlook is currently being blurred by other problems that are also the legacy of state capture, including bankrupt or nearly-bankrupt state-owned enterprises like the SABC, SAA and Eskom, low GDP growth, high unemployment, crime and corruption.

    Expensive ‘wait and see’ approach

    Millions of SA consumers are also taking financial strain because of the VAT increase in April, the very high fuel prices in 2018 and the ever-rising cost of electricity and other utilities. And now we are being subjected to increasingly loud and distracting political in-fighting ahead of the General Election in May, so it is not really surprising that many prospective buyers and investors are deciding to ‘wait and see’ how things turn out before making any further commitments to the market.

    But this could end up being an expensive decision. Barring disaster, we are anticipating a surge in prices following the election, which will mean that buyers have to earn more to afford the homes they want, take out bigger bonds and pay higher monthly instalments. In addition, they will have missed out on the substantial value growth that they would have gained by buying now, while prices are still relatively suppressed.

    Those who do buy now, on the other hand, will gain that post-election jump in the value of their property, and enjoy the benefits of a smaller monthly bond repayment. In short, they stand to derive the maximum possible advantage out of the strong market recovery that we foresee taking place over the next four years.

    Source: Biznews and Chas Everitt

    Head Office : 011-274-1700