Countering the rise of property scammers
Harcourts USA, an Australian based international real estate company, has seen tremendous recent growth in the US. They have acquired two new offices in Southern California, innovated their Harcourts Academy trainings, and continue to grow their non-distressed auction platform. Overall , agent numbers have drastically increased this past year as well.
Banks are showing an increased appetite to lend according to first quarter (Q1 2018) property statistics recently released by home loan originator Ooba.
Lighting up the outside of your property is a great way to make your home safe while enhancing your home and garden at the same time, creating an atmosphere unique to your surroundings.
Drought takes severe toll on farming property market
The next few months will be testing for the Western Cape’s agricultural property sector as it struggles to stand steadfast in the face of unrelenting pressure from the ongoing drought, which has severely hit the region.
Some markets are already suffering declines while others are reported to be surviving the challenges.
All agricultural commodities in the province are struggling due to the water crisis. Carl Opperman, chief executive of Agri Western Cape, says damage is so far estimated at R14billion.
In the livestock sector, grazing and feed shortages have already resulted in massive culling, and harvest prospects for the deciduous sector are showing decreases in crop volumes. This is resulting in both the import and export markets taking strain.
“The industry is an important generator of valuable foreign currency inflow, which is now also under pressure. The estimate for the viniculture sector shows smaller crops than 2017. Grain yields have been far below average, with no yields at all in certain areas.
“Agriculture’s water supply has been curtailed by between 60% and 83%. In the Lower-Berg River region, producers’ water quota has been depleted. No water is available for the after-crop irrigation of orchards and vineyards, and this will have an effect on next year’s harvest,” says Opperman.
The drought is a major risk for the Western Cape agricultural economy.
This phenomenon has been a major factor in agricultural property performance in the parts of the country worst affected, especially the Western Cape, where it has “kept a lid” on prices over the past few years, says Joop Coetzee of RealNet Plotte & Plase. Despite this, demand for small holdings is “vibrant” and interest in large farms has “picked up”.
In addition, even though Coetzee says the agricultural property market was quiet in the last quarter of 2017, it has “revived substantially” since political and presidential changes.
Land claims have also been an issue in the market for years, but sales have not slowed since the Land Expropriation Without Compensation motion was passed in Parliament, he says, adding there has also not been a rush of owners wanting to sell farms.
“It remains to be seen if this scenario will change over the next six months, but there is a belief land reformation will proceed in an orderly, considered and legal manner so as not to threaten the country’s food security or the financial institutions that support the agricultural sector. Consequently we do not foresee a decline in interest. Serious farmers will always be interested in good land.”
Although the land reform proposals have not yet resulted in any noticeable reduction in interest shown in the larger commercial farms either, Daniel Joubert, agricultural property specialist at Harcourts Winelands, says the very dry conditions have had a significant impact on the market. This is because their value is directly related to irrigation water availability and supply volumes.
“Farms are sought after in areas with a good water supply as opposed to areas in which supply has been restricted.”
Joubert says, for the first time, agricultural water supply has been restricted in many areas this year. It has created a new baseline of water security on these properties and this is adversely affecting their desirability. Buyers in the commercial segment are focusing their interests on those areas not been affected by water restrictions, and this has led to properties in these areas being in demand.
Currently, the market for smaller lifestyle farms is also slow, says his colleague James Visser, attributing this to political uncertainty and widely-publicised farm security issues.
A lot has been said about the increase in VAT from 14% to 15% as announced by the Finance Minister in his recent budget speech. There are certainly many sectors that are going to feel the shift in tax, however it might be the man and woman on the street who will be hit hardest.
Unfortunately consumers are directly impacted by tax increases due to our participation in a multitude of industries. We’re economically active and as purchasers of an array of products and services we feel the knock on effects of the suppliers. Who have to make changes in order to buffer the impact on their businesses.
Undoubtedly for the tenant and home owner food costs, as well as recent petrol price hikes, will influence affordability and budgets. For some the VAT increase might only be a few rand, for others it could be thousands.
It is imperative that you start adjusting and analysing the potential impact different expenditure increases will have on your budget. It is always better to be prepared than caught by surprise and then being forced to make last minute changes.
By having insight into budget amendments you will have the advantage of adjusting certain payments to account for increases. Cut down on unnecessary and wasteful expenses so that you continue being able to pay your bills or even fortunately save a little every month.
If you’re renting - now might be the best time to consider purchasing a property. With interest rates cut by 25 basis points, bringing the repo rate to 6.5% and the prime lending rate of banks to 10%, your value on monthly property expenditure might be more in your favour if you buy now.
Harcourts Africa Chief Executive Officer
The decision by South Africa’s Reserve Bank to cut its repo rate by 25 basis points to 6.5%, after the Monetary Policy Committee (MPC) meeting today, Wednesday, March 28, will provide much needed relief to the consumer who is generally highly indebted. The knock-on affects of this rate cut should take the prime lending rate of banks to 10%. International ratings agency Moody's stable outlook for South Africa certainly influenced this decision by the MPC.
We believe this signals the turning point in the interest rate cycle. With the Rand relatively strong and inflation at its lowest level for several years, this is hopefully the first of a few cuts in 2018.
South Africans have experienced continuous economic pressures in recent times. Consumers have been in a price pinch with rising costs, increased taxes, heightened unemployment and economic instability.
So, in short, the repo rate cut is very good news. There will definitely be a direct impact on reduced repayments with regards to household debt. Furthermore, we predict an increase in consumer confidence and real estate demand over the short to medium term.
Increased consumer confidence influences a multitude of other markets and sectors and with increased economic activity from a holistic perspective South Africa's path to further economic stability becomes a closer beacon.
Creating favourable conditions for investors and buyers to enter the market is a priority. An environment conducive to financial and economic positivity ensures there are more entrants from a larger diversity of backgrounds. In addition, for those who are already active in the market this translates into higher investment returns and a far reaching trust in the country's economic stability.
Harcourts Africa Chief Executive Officer