Article taken from Property Trader

If it is important to home loan borrowers to be able to budget ahead with complete accuracy, it could be a good idea to fix the interest rate on their loan.

However, for most people this is not a wise step to take, says Rob Lawrence, national manager of Rawson Finance, as it could result in them paying a premium of up to 4% more than the current market rate over the one to 10-year periods for which banks usually grant a fixed rate.

“For example, on a loan of more than 80% on a sum above R500 000, Absa might charge as much as 14,2%, as opposed to the current market rate of 10%.

“Although the banks are open to negotiation, this could mean that for anything up to 10 years, the borrower would be paying a premium of up to 4,2%. Looked at another way, interest rates would have to rise by at least 4% within two years for it to become beneficial for the borrower to have a fixed rate.”

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Article taken from Property 24

More and more South Africans are investing in retirement developments, and for good reason.

So says Adrian Goslett, CEO of RE/MAX, who adds that “there is a strong demand in South Africa for secure lifestyle retirement developments”. “In fact, the demand often outstrips supply, with many of the top retirement villages boasting long waiting lists.”

He says it is understandable why: “Many people recognise the long-term value of these kinds of developments, investing long before retirement age and renting them out until the time comes for them to move in. This gives these investors the opportunity to plan for their old age and invest in these developments at today’s prices, ensuring that their capital investment holds its value, and often, even increases in value. In this way, they can rent out or sell their family homes for income during their golden years, and enjoy being part of a retirement community when it is most needed."

Today’s retirement villages have made big shifts away from merely serving the aged, to meeting the luxuries demanded by a more privileged society, says Goslett: “When people decide to invest in a retirement village, they consciously or subconsciously have made the decision to invest in a certain lifestyle. The term ‘retirement village’ denotes far more than mere accommodation, and incorporates a number of lifestyle benefits as well.”

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Article taken ABSA's Top Stories

South Africa's leading bond originator, ooba on Tuesday said that the data it has collated around home loan applications over the past three years reveals interesting trends around the racial demographics of property buyers in South Africa.

The most notable of these trends is that the percentage of white applicants has been consistently less than the combined total of black and coloured applicants over the last three years.

According to the data the proportion of black applicants has risen steadily over the last few years, averaging 42% during 2009. This number has however dipped in the first four months of 2010 to 38%.

In contrast, the proportion of white applicants has risen from an average of 43% in 2009 to 47% during the first four months of 2010.

The proportion of Asian and Coloured applicants has remained constant since the beginning of 2008, averaging 8% and 7% respectively.

Saul Geffen, CEO of ooba, attributes the downward trend in the percentage of black applicants in 2010 to the fact that the tough economic conditions and stricter lending criteria have had a bigger impact on potential buyers at the lower end of the property price spectrum.

The data shows that potential black buyers make up 60-70% of total applicants for properties valued at less than R500,000.

This proportion drops significantly to around 30% for properties valued at between R500,000 and R1 million, and 10-20% for properties valued at over R1 million.

"The stricter bank lending criteria imposed under the NCA has also made it particularly tough for first time home buyers who aren't able to meet the affordability criteria."

However, Geffen says that as the economy recovers, the percentage of Black buyers will likely re-commence its upward trend.

"We expect to see an increasing percentage of Black buyers in line with the shifting economic base in South Africa."

Source: I-Net Bridge

Article taken from Property 24

If you’re looking for a more relaxed lifestyle and a reasonably priced property to go with it, living in a coastal holiday town could just be the answer.

“In recent years there has been a noticeable increase in the number of people seeking to escape the crime, grime and traffic congestion of big cities by taking up permanent residence in small towns and villages and commuting infrequently to their offices,” says Martin Schultheiss.

“This ‘semigration’ has of course been facilitated by the increasing use of technology and the growth of the work-from-home concept, but lately, many of those relocating have also been giving up their stressful big city jobs and opting to buy or start their own businesses in their new home towns, so that they don’t need to commute at all.

“They have seen opportunities in service provision for other new residents, the growth of eco- and adventure-tourism and in small-scale organic farming, for instance.”

However, he says, making such a move can prove expensive in property terms. “By definition, the supply of pre-owned homes in small towns is limited and an influx of semigrants can cause prices to rise sharply. On the other hand, the estates that have been and are being developed near popular country towns tend to be aimed at the top end of the market.

“But according to the latest statistics from First National Bank, this may not be a problem for those who choose a holiday town on the coast as their next home.”

The bank’s figures show, Schultheiss notes, that the property market is recovering more slowly in such towns than in the major metros. “While sales volumes are up by around 25% in most metro areas, the increase has not been anything like this yet in most of the coastal towns traditionally regarded as holiday destinations.

“This means that prices in metro areas are likely to start rising well before those in coastal towns, creating a window of opportunity for those planning a relocation to sell their city property and buy a new home at the coast for quite a bit less – especially if the town they choose still has a surplus of the holiday homes that were simultaneously placed on the market during the recession.”