Increased lending positive for property market

May 3, 2018 4:10:03 AM Share this:

Statistics released by bond originator, ooba, in their latest "oobarometer" for the first quarter of 2018, reflecting banks increased willingness to lend money is fantastic news for the real estate market in South Africa.

According to ooba in the first quarter of 2018 they recorded the highest home loan approval rate in over ten years since the National Credit Act was implemented. With an increase of 4.9% compared to the first quarter of 2017.

These figures are certainly reflected in the market we're experiencing. This improved lending appetite will play a particularly important role influencing consumer confidence. After the market fluctuations and economic instability of 2017 the stabilization of 2018 thus far is reinforcing buyer interest and much needed investment activity. The current political climate continues to re-instill hope in the broader economy.

Another exciting sentiment shared by the report states that banks are increasingly more willing to lend the full value of a property without requiring a deposit. The average deposit over the entire market decreased by 6.4% year-on-year. For many first-time buyers the need for a sizeable deposit and stricter lending criteria implemented over the past few years greatly influenced the decision to buy. Having to apply for another loan to cover the deposit amount might put affordability of the home out of reach.

There are still corners of the market that remain under pressure and will continue to do so, however with the information emanating from ooba's report, both buyers and sellers are expected to benefit from this improved activity.

From a holistic perspective we're definitely dealing with a buyer's market, yet with banks letting go of the reigns more buyers will enter the market and create greater demand which ultimately leads to a far more beneficial environment for everyone.

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Topics: increased lending by banks

Harcourts International’s Todd Cassie named to CIO100 list

May 3, 2018 4:05:31 AM Share this:

Todd Cassie, Harcourts International’s Head of Technology, has been featured by CIO magazine as a member of the CIO100 list. The list annually honours the most innovative technology leaders across all industries who are at the forefront of decision-making and strategic change.

Mr Cassie said that it was an honour to be included in the list and credited the recognition to the team members at Harcourts for their dedication to excellence and unrelenting focus on leading the way in the industry.

“It’s always great to be recognised for the work you do, but it’s a team effort,” he said. “For Harcourts it’s recognition as a potential place to work for those that are considering a change and recognition that we have a dedicated tech function that is reasonably large and is working hard to deliver great customer outcomes.”

"The success of Harcourts International's technology projects greatly influence the South African business prerogatives. Technology development and the evolution of the real estate market to include modern technological feats is of utmost importance to us. Our key strategic departments work non-stop researching ways to greatly improve client experience, product delivery to target markets and office/agent communication. Mr Cassie has certainly been a pillar of leadership in these advancements," said Harcourts South Africa CEO, Richard Gray.

Harcourts International Managing Director Mike Green said, “Starting with examining how Harcourts delivers technology throughout the business to its internal team, the business owners, sales consultants, property managers and leadership, Todd’s vision has seen tremendous strides over the past year.”

Since joining Harcourts one year ago, Mr Cassie has led the process of change in the way the Tech Team operates, with team members in Australia and New Zealand, noting that efficiencies and capabilities were enhanced and streamlined.

“For me the greatest accomplishment this past year has been the Tech Team accepting the need for change and getting on with it. Our greatest challenge now is to keep up the momentum as we continue to make changes because it’s not always evident without an instant return for your efforts.

“Harcourts has a proud history of using technology to deliver innovations to the industry that dates to the late 90s,” said Mr Cassie, noting that Harcourts was the first real estate brand to launch a website in New Zealand in 1997.

“Although that concept seems obvious, at the time it was revolutionary, and you can imagine the difference in the technology 20 years ago.

“Our focus is and continues to be on our clients. By maintaining this focus, we have a perfect yardstick to measure ourselves against as we continue our development lifecycle.”

Mr Cassie has worked in technology for over 20 years across a broad range of industries in New Zealand, Australia, the UK & Canada, and is a member of ISACA and Deloitte CIO Roundtable. Most recently he spent the 12 years working with the Christchurch International Airport where, in 2016, he was named to the CIO100 list.

It was the draw of working with New Zealand’s #1 real estate franchise network that brought him to Harcourts, where he now oversees robust technology team servicing 10 countries across over 900 offices and 10,000 team members.

He noted that Harcourts was one of the first real estate brands worldwide to partner with Facebook and launch its enterprise employee engagement application Workplace by Facebook. By supporting initiatives and involving outside developers, the company has seen success in the early stages of the project.

“Finding new and unique ways to do things that gives us a competitive advantage, especially ones that other real estate brands aren’t doing and being first to the market is a different way of thinking,” said Mr Cassie.


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Topics: CIO100 list, real estate technology

Battery powered homes might soon be the norm.

Apr 19, 2018 1:02:54 AM Share this:

Sustainable solutions for homes are being developed at a rapid rate. Green homes are fast becoming the norm as opposed to the exception. We’ve seen the rise of water efficient homes dramatically rise in water scarce regions over the past few years. So, to a concerted effort is being made to ensure properties are energy efficient as well.

Maximising a home’s ability to save on resources can often be an expensive investment. However, the long-term pros continue to be an attractive choice for home owners. One of the areas where international green agents are investing a lot of research and development into is the addition of battery operated alternatives. We’ve seen organisations like Tesla make major advancements in the field of battery storage options.

For those of you thinking these are relatively new energy solutions to the real estate market you'd be forgiven. In fact in markets like the US battery powered homes have been in development and implementation phases for quite some time now.

Although the average home owner might not be able to afford battery packs that can drastically reduce grid usage there seems to be great interest in the developments and commercial markets. As in the case where US real estate developer Mandalay announced they plan to build 4000 ultra-energy-efficient homes which will feature 8 kilowatt-hour batteries from German manufacturer Sonnen.

There is no doubt that as South Africans continue to ride the unpredictable economic wave that more alternatives are going to be explored. Not only from the point of view to make a contribution to more sustainable solutions but also in an effort to become more independent and to ensure cost saving over the long term.

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Avoiding the impact of the VAT increase on your property payments

Apr 12, 2018 2:55:51 AM Share this:

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.


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Topics: Vat Increase

Repo rate cut good news for the property market

Mar 29, 2018 3:41:43 PM Share this:

The decision by South Africa’s Reserve Bank to cut interest rates by 25 basis points, bringing the repo rate to 6.5% and the prime lending rate of banks to 10%, after the Monetary Policy Committee (MPC) meeting today, will provide much needed relief to the consumer who is generally highly indebted. 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.

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Topics: repo rate cut, repo rate

The importance of estate agent training

Mar 23, 2018 2:55:53 PM Share this:

The real estate industry has undoubtedly undergone a drastic transformation in the past decade. The arrival and prominence of property portals, online classifieds and a large amount of new entrants to the market has not only provided the consumer with a plethora of choices but ensured that leading estate agencies have to continually evolve to stay abreast with service and client offerings.

There are an abundance of key industry changes that agents need to understand and master. Technology has played a major role in this shift, with agencies offering client logins on their websites which indicate to clients the status of their property, its marketing and interest. Similarly agents are having to enhance word of mouth referral strategies to include digital marketing platforms to reach new clients and stay in contact with current clients. South Africa's economic fluctuations don't do anybody any favours either and new legislative amendments occur often, forcing the agent to focus on keeping up to date with all the necessary information in order to assist the client in the best possible way.

At Harcourts training is an important path for our agents and it occurs on a continual basis. We have the Harcourts Academy that has training schedules for agents of all skill levels and this is done to perpetually equip agents with the highest level of insight into the industry. That is often forgotten when clients decide to sell their home privately. The agents knowledge, advice and understanding of markets remain a major contributor to the success of a property transaction.

It is of utmost importance that real estate agencies aim to develop the skills needed to build a highly successful career in real estate. Continually attending a range of dynamic courses and a tailored system of learning. Ensure your agents attend a reputable and leading training organisation.

Even the best tools and individual brilliance can be worthless without the correct focus. Recruit the best people and train them to be even better. This helps your culture of high achievement and success.

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Topics: Estate agent training

Harcourts South Africa 2018 Budget Reaction

Feb 22, 2018 12:13:30 AM Share this:

Overall it was a far more balanced budget speech than initially expected, with a focus on rebuilding, which is in line with the newly elected President Cyril Ramaphosa's messaging. However, Finance Minister Gigaba's announcement that there will be an increase in VAT from 14% to 15%, the first time VAT has been increased since 1993, will undoubtedly have a direct impact on the property market. VAT is payable on the transaction of a home purchase and in some cases included in the price of the home. Although one percent seems like a very slight increase, transactions like high value commercial properties or development investments might feel the increase far more than that of the middle to lower end of the market.

There is no doubt Government is experiencing shortfalls in their budget and lending might tighten up, therefore accumulation of funds has to originate from taxes. South Africans experiencing a price pinch with rising food costs, fuel costs and tax hikes might continue to be under financial pressure as more increases can be expected. This was noted in the speech as a 22c/litre increase in the general fuel levy, and a 30c/litre rise in the Road Accident Fund (RAF) levy was announced. South Africans will also be paying 52 cents more per litre for fuel from April 4. The effect of these tax hikes impacts the man on the street in a direct manner, and this might have an effect on the rental market on the lower end.


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Topics: 2018 budget, Cyril Ramaphosa, economical news

Economic stability facilitates growth

Feb 19, 2018 4:52:47 PM Share this:

The political climate in South Africa has been under the microscope in recent times as Deputy President Cyril Ramaphosa took over the reigns as leader of the ruling party. The Rand immediately gained traction in the days following his appointment and has remained positive since.

There appears to be a shift in political messaging with the intention hopefully being to restore confidence in our markets for foreign and local investors.

It is essential that Government avoid volatile political decisions that affect our economy and influence public economic perception. Despite Harcourts recording an incredibly successful 2017, many sectors of the property market experienced stagnation and a decline in activity

There are many factors that influence buyers and sellers willingness to engage in real estate transactions, however, to a large extent buyers and sellers gauge potential success on general reports and opinions of the market, especially in an emerging market.

Real estate is an investment, and for most it will be the single largest investment of our lives, so it is understandable that we consider all the external elements before committing. This ideology spills over into other forms of investment too, especially commercial real estate, which assists greatly in business growth and entrepreneurship. When the private sector remains a little apprehensive to invest in real estate - business growth and employment are directly affected.

It is with this in mind that Government needs to aim for stability over the short term. Ensuring our markets remain steady enough to avoid fluctuations that either put our consumers under pressure with rising costs or deter extensive capital investment.

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Topics: Cyril Ramaphosa, economical news

Zuma resignation will have a definite positive effect on the property market.

Feb 19, 2018 4:46:17 PM Share this:

Former President Jacob Zuma's resignation yesterday evening propelled investor confidence back into positive territory. The Rand has already gained a lot of ground in the past few weeks and as it continues to strengthen it might relieve some of the price pressure the South African consumer has been experiencing.

There is no doubt that the political climate in South Africa and Government related activities have influenced our economy. Local investors as well as foreign investors, both buyers and sellers, have been gun shy in certain markets and at times apprehensive to invest, especially in the residential rental market.

Traditionally property defies a lot of the immediate reactions due to its long term nature, however the commercial and rental markets might react more sharply to these changes. There is also a good chance we'll see increased activity in flat markets and a renewed interest from buyers and sellers alike. When a stable and growing economy has the ability to set a tone that puts the activity in the market at ease opportunities are created from areas of the economy previously dampened by rhetoric and legislation amendments that threatened property ownership.

These shifts in Government have been received positively to a large extent by international markets, as we saw Emerging Market experts from Wall Street in the U.S. predict positive changes for South Africa. This will do wonders for our foreign investment market as perceptions and media opinions certainly influence the external view of local trading.

It is important to note though that there are still many political and fiscal challenges and by no means are we immediately saved by the former President's resignation. However, it is the optimism of a renewed commitment to growth and stability that South Africans so desperately need.


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Topics: Jacob Zuma, Zuma Resignation

The emotional side of the property market

Feb 19, 2018 4:38:45 PM Share this:

The property market is often overshadowed by the investment intentions of sellers and buyers, forgetting the emotional aspect of purchasing a home for you and your family. The nostalgia many of us carry with us about our childhood home is often a major factor when buyers gravitate toward a suburb or particular home.


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Topics: Finding your dream home, Homeowners