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, repo rate cut

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: Cyril Ramaphosa, economical news, 2018 budget

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: Zuma Resignation, Jacob Zuma

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: Homeowners, Finding your dream home

What does 2018 hold for the property market?

Jan 16, 2018 4:50:54 PM Share this:

Many of us closed off the year anxiously monitoring the ruling party's executive committee election. For the large part it's important for us to show an active interest in the direction our country is moving in, in the other sense we desire a Government that is transparent and has the best interests of its people at heart. The economy certainly experienced quite a number of dramatic shifts during 2017 and some markets were effected, be it positively or negatively. Harcourts for one experienced defiant growth, showing that many South Africans remain active in an uncertain economy.

What does 2018 hold? It is always difficult making predictions, as there are an enormous amount of factors to take into consideration. With both external and internal elements influencing the markets, forecasting cycles is purely based on interpretation of data.

Taking the trends we're already moving toward into consideration - digital and technological evolution is a major focus point of the property market. We've seen the portals incorporate virtual reality, video functionality and drone capabilities to ensure more detailed data for clients, at Harcourts we're equally dedicated to the advancement of more accurate visual representation of homes. We've also monitored how digital marketing has majorly influenced client and agent interaction, and this is certainly going to intensify during this year. Another technological point being incorporated into the property market internationally and locally is digital funding models - like cryptocurrencies and crowdfunding real estate. This will surely be hot topics throughout the year.

Another point to take note of are the knock on affects of the political climate in South Africa. Often the negative reactions to short term economic changes are only felt the following year. On this point I am very hopeful that there will be more stability in the political messaging from Government, as well as less major ministerial suprises, however this is difficult to predict. Consumers might be in a price pinch for a little while longer, but the market already seems to be gaining momentum. Property outweighs a lot of the immediate reactions due to its long term nature, however the commercial and rental markets might react more sharply to any more surprises.

An element of change in markets across the board which Harcourts is very excited by and spent a lot of time developing and improving is the corporate shift of focus back to client service. The internet has spun the wheel of change into the favour of the client, where it should be, and the prominence of consumer ratings platforms has forced corporate entities to be held accountable for their actions. It is shift that has had to happen. When services are dedicated to impeccable client experiences the bar gets raised and the dynamic in the relationship is strengthened. This is where Harcourts lives.

These are only a few interests I touched on, and there are many other market elements going to progress throughout the year. All in all, we're focused on continuing our incredible growth cycle and maintaining our rapid evolution and client focus.

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Job creation, not increased taxes

Dec 5, 2017 11:02:52 PM Share this:

The news that President Zuma has instructed the Minister of Finance, Malusi Gigaba, to trim expenses and increase revenue in order to find a solution to the R40 billion gap identified in the Medium-Term Budget Policy Statement is of major concern.

The statement released by the Presidency on Monday identifying the steps being taken to address economic problems after Standard & Poor lowered South Africa’s long term foreign and local currency debt ratings by one notch each to ‘BB’ and ‘BB+’ on Friday, might put cash strapped consumers under even more pressure.

Reports explain that the split will equate to cuts in expenditure amounting to about R25 billion and "revenue-enhancing" measures of about R15 billion.

Despite the obvious concerns of less money being spent in crucial areas like RDP housing, social assistance and other key economic and social focuses, I don't believe South Africans can be squeezed for more taxes. We are in a price pinch as it is, with rising costs, increased taxes, heightened unemployment and economic instability. To further aggravate the situation by trying to recover the shortfall by extracting more taxes from citizens, Government is counteracting growth.

Instead, Government should be developing plans that combat economic stagnation. They should be tougher on corruption and mismanaged funds, so that the money that is available in the fiscal reaches its intended target.

An environment not conducive to job creation and economic growth is what is propelling our economic vulnerability. Businesses, entrepreneurs and everyday citizens should have access to funding models, advisory boards, mentors, technology etc. that boost commercial activity in the areas where we need it most. There should be a push to gain access to markets through programmes that aim to transfer skills and development.

Hasty plans with concrete solutions are desperately needed to penetrate problem areas, and a fresh approach to accessing funds needs to occur instead of looking to citizens for money they don't have.

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Topics: Medium-Term Budget Policy Statement, economic problems, key economic and social focuses

Finding that country getaway home

Nov 27, 2017 4:47:44 PM Share this:

The hustle and bustle of the city and the energy of life a stone's throw from corporate magma is a drawing factor for many South Africans. We're aware of the urbanisation into major metros and the desire to achieve professional success as well the effects thereof on the micro economy of smaller towns.

However, for some, escaping that gripping hold of the city is essential and people who regularly trek to the country often explain how returning to simplicity a few times a year can be the recharge they were yearning for.

The primary option is usually to rent a home in the area for the holiday period or check into your guesthouse of choice, but calculating the benefit of owning property in these regions you'll discover can often be of greater value to the regular traveler.

Many estate agents have an extensive national footprint, Harcourts has over 150 offices nationwide with some being in smaller towns across all provinces, which will greatly assist in locating a property of your choice. Agents have databases and software that can match exactly what you're looking for against their stock.

When purchasing a second home or investment property, it is crucial to familiarise yourself with the local property landscape. Spend some time researching the value of homes in the area so you have a good idea what you can afford before starting the process. You don't want to overextend your budget on a home that is designed to relieve stress not create it. However, in many cases in the smaller towns you are able to get a lot more bang for your back.

Also, take into consideration what your usual holiday activities consist of and select a property that fits that schedule. If you're only looking for a place to rest your heads at night and typically explore the region during the day a home with all the extra bells and whistles that are aimed at extreme comfort might be a waste of money.

Buying a holiday home can be a very exciting process that yields incredible memories for your family. If you select a professional estate agent with a highly recommended local network then this investment could be a wonderful addition to the family.


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Topics: country getaway, getaway home, dream home

Holiday rentals scams beware

Nov 27, 2017 4:04:17 PM Share this:

Now is the time when holidaymakers start scouring the internet for properties to rent during the festive season. Last minute planning often fueled by desperation and online scammers exploit this need.

As the internet is usually the go-to platform for holiday rentals, anonymous communication is often a prerequisite, which can make any of us feel uneasy. It is important to understand that you need to be alert and rely on your instincts when parting with personal information and money. Some horror stories have emerged in recent times - most often related to people paying deposits blindly.

Here are a few tips:

Logic goes a long way. When something is too good to be true, it usually is. Be skeptical of advertisements where the rental quoted is a lot lower than the average for the area in which you are interested. Do a quick market analysis of similar homes to gauge the regional standard.

When communication is vague and your direct responses are going unanswered and are being replied with rhetoric, be weary. An extension of this scam is the "homeowner" that has a million excuses why they can't have someone meet them face to face, especially because they know you're usually still out of town. Their excuses range from always running late, or on business trips or in meetings. The next step is often a request to pay a deposit, albeit at times a smaller one, in good faith to "secure" the property. Do not pay until you're absolutely sure.

A picture speaks a thousand words. If the photos you're being sent vary dramatically in size and quality warning bells should go off. Many potential scammers download stock photos off the internet and use these as bait to attract potential holidaymakers. Request images from different angles and request new photos, with modern technology this is usually rather easy to achieve.

Digital history. Do a quick search online on the rental property's previous adverts. You can either search the contact numbers or address of the property to find out if this home is rented out on an annual basis. Obviously not a sole reflection on the validity of the home but just another factor to consider.

The majority of holiday rentals advertised contain accurate information from a trustworthy source and there is a good chance you'll have a very pleasant experience. This article is in no way aimed at dissuading you from contacting homeowners direct but for both the homeowner and the holidaymaker it is always the best option to make use of a highly reputable estate agency. This way both parties are secure and the transaction is managed professionally.

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Topics: holiday rentals