Residential Property Values have fallen over the last few years, yet municipal valuations may not reflect the slump in property valuations. Meaning the rates and taxes linked to your property value may be to high. The City of Cape Town uses a computer valuation method known as the Computer Aided Mass Appraisal System (CAMA) the system looks at data based on recent property sales at the date of valuation. The City of Cape Town gave property owners a opportunity to object the municipal valuation of their properties and this is open until the end of April 2010. Thus far more than 30 000 objections have been received by the City of Cape Town.
The City of Cape Town has made an effort to assist cash strapped ratepayers by increasing the the primary rebate from R88k to R200k. Households with less than R3000 monthly income can apply for a 100% rebate and the pensioners rebate rate has now increased to R8 500 per month.
Property owners have until the end of April to object to the valuation that will come into effect on the 1st of July 2010.
Further information is avaliable on this link: City of Cape Town Property Valuations 2010
Showing posts with label Residential Property. Show all posts
Showing posts with label Residential Property. Show all posts
Thursday, April 8, 2010
Wednesday, October 21, 2009
News On The Local Property Front
Today, my studio guest was Ronell Beresford who is a leading bond consultant with over 20 years experience.
Ronell gave us this update of what is happening on the local property market:
The Property and Financial Market
Ronell gave us this update of what is happening on the local property market:
The Property and Financial Market
- If we look at The 3rd quarter, Cape Metro FNB Residential Property Barometer, it's pointed to significant jump in activity levels in the region, after a very weak 2nd quarter level.
- This suggests that the region is beginning to feel the positive impact of the series of int. rate cuts that took place in the 1st half of 2009.
- The estimate percentage of properties sold at below asking price, shows a significant decline from91% in the 2nd quarter to 83% in the 3rd quarter.
- The average time of a property on the market prior to it being sold, declined sharply from 22 weeks in the 2nd quarter of this year to 16 weeks in the 3rd quarter.
- People selling to 'down scale' due to financial pressure, has declined significantly from average 36%in the 2nd quarter to 25% in the 3rd.
- Simultaneously, selling in 'order to upgrade', jumped from 9% of the total selling, to 17% over the same period.
- Average selling prices of the Cape Metro area as a whole, is plus/minus R885 000.
- The market improvement is largely the result of (1) int. rate cuts and (2) the banks' responses to better market conditions by relaxing their lending criteria.
- 2 of the 4 Large banks are looking at granting home loans of u to 100%, whilst previously (especially during the 1st half of the year), they were granting on average between 70% - 80% of the selling price.
- We must however take into account that banks are more so starting to rely on built-in credit scoring systems for the assessment of their home loan applications. This essentially means that customers behavior in terms of the way in which they conduct their accounts or credit, are seriously being taken into account when looking at granting them a new or further home loan.
- Further interest rate discount negotiations with the banks on behalf of new home loan applicants,have become difficult and rates below 1% less than prime of 10, 5% is almost non-existent.
- The improvement of the market has not only been seen in volume of transactions and diminishing price deflation, but also in an improvement in credit quality. According to the banks, their home loan arrears numbers have been improving since the beginning of the year.
- Good news is that it looks like the economy is expected to provide more support for the market, as we emerge from recession.
Tuesday, October 20, 2009
Buy to Let?
Should I keep or sell my rental property?
Today, I saw a client who wanted some advice in keeping or selling her rental property and investing the proceeds. The property is worth R830k, the outstanding bond is R300k, she has spent R20k this year maintaining the property and the rental income is R4000 p/m.
She has problems with the tenants and often needs to pay in to cover the outstanding bond which she cannot afford.
If the property was sold she would have +/-R500k to invest. A well structured invested could easily outperform the yield of this rental property and she would be free of all the headaches of this property.
Rental properties yield around 3-6%.
In my opinion buying your own home is a good investment but buying to let is not a good investment in South Africa. The cost of capital, problems with tenants, agency commissions and high taxes all make the "buy to let" investment very unattractive.
What do you think?
Today, I saw a client who wanted some advice in keeping or selling her rental property and investing the proceeds. The property is worth R830k, the outstanding bond is R300k, she has spent R20k this year maintaining the property and the rental income is R4000 p/m.
She has problems with the tenants and often needs to pay in to cover the outstanding bond which she cannot afford.
If the property was sold she would have +/-R500k to invest. A well structured invested could easily outperform the yield of this rental property and she would be free of all the headaches of this property.
Rental properties yield around 3-6%.
In my opinion buying your own home is a good investment but buying to let is not a good investment in South Africa. The cost of capital, problems with tenants, agency commissions and high taxes all make the "buy to let" investment very unattractive.
What do you think?
Monday, October 6, 2008
Residential Property Crisis Looms...
Absa's housing "fire sale" of the year
Realestateweb reporter
06 October 2008 Article rating:-->
Homes, plush and modest, in special distressed sale auction in Pretoria; other banks to follow suit.
Big four bank Absa is to offload not far off 70 homes, ranging from plush to modest, in its biggest mass "distressed sale" auction of residential properties in Pretoria next week.
The Alliance Group recently launched a rapid auction programme for the bank, selling off properties en masse where owners can no longer meet their debt obligations.
The auctioneer announced on Monday it would be conducting its biggest ever rapid auction yet, on 16 October (Pretoria Country Club).
It revealed, too, that other banks have signed up for rapid auctions to get properties off their books.
The special auctions are being held regularly around the country, with about 200 homes being passed on to the auctioneer by Absa each month, said the auctioneer.
Rising interest rates and slowing economic growth have been putting financial pressure on home-owners across income groups while emigrating sellers have been adding stock to the market in large numbers.
Estate agents have struggled to sell properties this year, with FNB Home Loans reporting this week that the average time to sell a home has now stretched from about three-and-a-half months in the second quarter of the year to more than five months.
FNB said on Monday, when it released its quarterly barometer on the residential market, that investors have been increasingly returning properties to the market at break-even prices and for less than they paid.
The rapid auction programme "helps defaulting homeowners to sell their properties through a voluntary and non-compulsory sales channel whilst working closely with the banks and bondholders to minimise debt write-offs", said the auctioneer.
"Other banks have also signed up for the ‘Rapid Auction Programme' and the banks themselves are counselling their defaulting and distressed clients, with whom sales mandates will be signed directly," said Alliance's Gary Serebro.
There are a number of residential properties on offer, ranging from a magnificent five-bedroom home in Centurion, a four-bedroom home in Magalieskruin with a gym and jacuzzi, a three-bedroom villa in Pretoria North to a stunning 4-bedroom thatched home in Glen Austin, said Serebro.
Additional properties, he said, include: a two-bedroom home in Moreleta Park, and a number of vacant plots in Kosmos.
Absa told Realestateweb recently that professionals, like doctors and lawyers, are among those hardest hit.
Gavin Opperman, Absa Home Loans chief executive officer, said consumers were not going to doctors and dentists and were not paying their medical aids.
He cited the example of a property he handed over for auction after a medical professional who put down a deposit of R3m, plus costs, and was repaying the balance of R7m with a mortgage could no longer keep up with his debts.
The professional paid R10m about 18 months ago for his home and was struggling with home loan repayments of about R100 000/month. Particularly depressing is that the owner can expect to fetch 50 to 60% of that market value on auction.
This is not an isolated case, said Opperman. He added that Absa would assist individuals like this who contact the bank as soon as they spot they are heading into financial trouble.
"These people will bounce back. We'll restructure the debt and he will rent for a while," said Opperman referring to the medical professional who is about to see his dream home go under the hammer.
He said individuals in the affordable housing space were not as hard hit as the upper income earners. Neighbours and friends in lower income areas tend to help each other with debt repayments, unlike the top-end luxury housing market, he said.
Realestateweb reporter
06 October 2008 Article rating:-->
Homes, plush and modest, in special distressed sale auction in Pretoria; other banks to follow suit.
Big four bank Absa is to offload not far off 70 homes, ranging from plush to modest, in its biggest mass "distressed sale" auction of residential properties in Pretoria next week.
The Alliance Group recently launched a rapid auction programme for the bank, selling off properties en masse where owners can no longer meet their debt obligations.
The auctioneer announced on Monday it would be conducting its biggest ever rapid auction yet, on 16 October (Pretoria Country Club).
It revealed, too, that other banks have signed up for rapid auctions to get properties off their books.
The special auctions are being held regularly around the country, with about 200 homes being passed on to the auctioneer by Absa each month, said the auctioneer.
Rising interest rates and slowing economic growth have been putting financial pressure on home-owners across income groups while emigrating sellers have been adding stock to the market in large numbers.
Estate agents have struggled to sell properties this year, with FNB Home Loans reporting this week that the average time to sell a home has now stretched from about three-and-a-half months in the second quarter of the year to more than five months.
FNB said on Monday, when it released its quarterly barometer on the residential market, that investors have been increasingly returning properties to the market at break-even prices and for less than they paid.
The rapid auction programme "helps defaulting homeowners to sell their properties through a voluntary and non-compulsory sales channel whilst working closely with the banks and bondholders to minimise debt write-offs", said the auctioneer.
"Other banks have also signed up for the ‘Rapid Auction Programme' and the banks themselves are counselling their defaulting and distressed clients, with whom sales mandates will be signed directly," said Alliance's Gary Serebro.
There are a number of residential properties on offer, ranging from a magnificent five-bedroom home in Centurion, a four-bedroom home in Magalieskruin with a gym and jacuzzi, a three-bedroom villa in Pretoria North to a stunning 4-bedroom thatched home in Glen Austin, said Serebro.
Additional properties, he said, include: a two-bedroom home in Moreleta Park, and a number of vacant plots in Kosmos.
Absa told Realestateweb recently that professionals, like doctors and lawyers, are among those hardest hit.
Gavin Opperman, Absa Home Loans chief executive officer, said consumers were not going to doctors and dentists and were not paying their medical aids.
He cited the example of a property he handed over for auction after a medical professional who put down a deposit of R3m, plus costs, and was repaying the balance of R7m with a mortgage could no longer keep up with his debts.
The professional paid R10m about 18 months ago for his home and was struggling with home loan repayments of about R100 000/month. Particularly depressing is that the owner can expect to fetch 50 to 60% of that market value on auction.
This is not an isolated case, said Opperman. He added that Absa would assist individuals like this who contact the bank as soon as they spot they are heading into financial trouble.
"These people will bounce back. We'll restructure the debt and he will rent for a while," said Opperman referring to the medical professional who is about to see his dream home go under the hammer.
He said individuals in the affordable housing space were not as hard hit as the upper income earners. Neighbours and friends in lower income areas tend to help each other with debt repayments, unlike the top-end luxury housing market, he said.
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