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Never say never , but for reasons mentioned above, which include both official policy changes plus an apparent desire by the SARB to be more transparent (it runs scheduled interest rate meetings these days with post-meeting announcements on television) and stable in-policy application, the probability of a 1998 happening again has been dramatically reduced. credit pacific service union

All pretty positive news, with the normal caveats attached. Does this mean it is time to abandon the search for the best fixed interest rates because happy days are probably on the way again Not necessarily. While most people only begin to consider fixed interest rates when interest rates start to rise, the irony is that by that stage of the cycle it may be too late to get a decent fixed rate. This is because fixed interest rates are largely linked to market expectations for interest rates going forward. If banks provide a fixed rate for, say, 12 months ahead, then in order to manage out their risk they will hedge it in the forward market. The interest rates in the forward market are determined largely by market expectations of what floating interest rates will be (although this market, like economists, doesn t necessarily get it right). When inflationary pressures are rising, and interest rates look like they are rising as a result, the forward interest rate markets are very often pricing in rate hikes and are significantly higher than the SARB s repo rate (to which prime rate is linked). This is why many home owners looking to fix rates after the first interest rate hikes last year were disappointed by the high fixed interest rates that banks were generally offering. Given that the SARB is not prone to moving rates rapidly and radically up or down these days, it seemed to make little sense to fix interest rates at that stage, given what was on offer. The time when one will possibly be offered more attractive fixed interest rates on home loans is, perhaps ironically, when floating interest rates have started declining, and the forward market is pricing in further cuts. Unfortunately, at that stage many people seem to have lost interest in fixing rates because they are hoping to capitalise on floating rates going lower. credit first service union

In closing, therefore, whether you want to fix or float your rate depends on your appetite for risk. But if you are keen on a good fixed interest rate on your home loan, don t stop looking when interest rates look to be going down. That, ironically, may be the best time to be on the lookout. card credit mobile service

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Tips for selling privately 07 May 2007 / by Julia Hinton Selling a property privately is no longer such a daunting task and the phenomenon is becoming increasingly more attractive to sellers looking to save the whopping amount in estate agent s commission. How to start and what does it cost Start by calling the National Service Centre on 083 913 1000 or your local Private Property branch (see page 11). There are 27 franchise branches around South Africa as well as one in Namibia. You will be able to ask questions and when you decide to go ahead and list your home, one of our Property Consultants will make an appointment to visit you at the property. There is a small once-off listing fee of between R990 and R2999 (including VAT), depending on the value of your property. card credit discover service

Marketing tools and strategy

Private Property will help you market your home: credit public service union

• You will receive a detailed information pack. card credit processing service

• Your property listing with detailed description and up to 12 photographs will be active on our website within 24 hours. Our website is the busiest property website in South Africa with over 150 000 registered buyers in the database. center credit service union

• Matching buyers will be sent email and SMS alerts. card credit service wireless

• For Sale boards should be displayed in front of your property at all times; anyone driving by who is interested can SMS the reference number to 35609 and will instantly be sent your contact details. credit security service union

• Having a show day helps you sell - You will simply need to contact your Property Consultant before Thursday, so that your home can be flagged on show and SMS and email alerts can be sent to all matching buyers in time for them to plan their Sunday visit. Remember to erect your On Show boards in visible places outside your property and we will give you a show day brochure that you can hand out to visitors on the day. Ask your Consultant about additional items to attract attention such as balloons and bunting. credit report service

• Private Property also advertise on radio stations, in local newspapers, distribute flyers, and we print 20 000 copies of the Private property Magazine each month which is available in CNA stores around the country. blogspot com christian

We give you the tools to help you sell privately and your Property Consultant is always on hand to address any concerns or answer questions. When you get an offer

This is probably the part of the process that has initially scared most people who decide to sell privately, but you needn t worry. When you get an offer and have agreed on the price and the conditions of sale, simply call your Property Consultant who is there to protect your best interests and will guide you through the sales facilitation process. christian counseling credit

You will be provided with a standard sales agreement and your Consultant will recommend a reputable conveyancing attorney. All attorneys on our panel are carefully monitored and are signed up with L@W (Lawyers Access Web), which is an online system whereby you will receive regular email and SMS updates allowing you to track your transfer . credit federal service union

Bond finance for your buyer

Your Consultant can assist your buyer with home loan finance, and importantly for you, ensure that the buyer does in fact qualify to purchase your property. Private Property submits bond applications to the four major banks and can assist in obtaining the best rate. Meet the Consultant Jeanette Johnsen Property Consultant - Centurion Private Property held a competition last month for the Toolbox Champion and Jeanette Johnson from the Centurion branch was our winner. credit monitoring service

It might seem like a bit of a strange kind of competition, but if you list your property with Private Property you will be able to witness the blue Toolbox that the Consultant will arrive at your home with. It contains everything that they need to give you, demonstrate and explain, in order to help you sell your property. credit division service

Jeanette has been with Private Property since October 2005, which was well before the time of the Toolbox and according to her manager, Natasha Mourik, Jeanette embraced it as an amazing and very valuable tool, using it to help her help her sellers to sell their properties, which is the ultimate objective. card credit online service

Jeanette has shown real professionalism and courage, which are two of our Private Property values. She is determined to do the best job possible. The idea behind the Toolbox is that it is intended to help the Consultants to communicate everything clearly to sellers, so that they understand exactly how the private sales process works, and thereby achieve the desired results, says Mourik. consumer counseling credit inc

Another feather in Jeanette s cap is that she made the Private Property Champions Club by achieving all her targets, and none of this could have been achieved without the passion she has for her job, says Mourik. card credit fleet service

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Conveyancing Process 07 May 2007 / by Denise Simpson Conveyancing describes the legal process whereby a person, closed corporation, company or trust becomes the registered and lawful owner of fixed property and thereby ensures that such ownership cannot be challenged. A Conveyancer is an Attorney who has passed the National Conveyancing Examination, and by law, is the only person deemed to register fixed property transfers. card consolidation credit

The seller usually nominates the Conveyancer to act on his behalf to handle the transfer process. In order for the transaction to take place a written agreement of sale needs to be signed by both buyer and seller, with all suspensive conditions being met. The following procedure will take place: Deeds Office Search This will identify the details of the property, the current legal owner, any bonds held over the property, and details of any interdicts. credit free online report

Preparation of Documentation

The following documentation is needed by the Conveyancer: credit federal first service

• A Power of Attorney to pass transfer, which will empower the Conveyancer to enact the transfer on the seller s behalf. consumer credit service

• Declaration of marital status, identity number and insolvency. center credit family service

• Transfer Duty and Value Added Tax (VAT) declaration. credit reporting service

• A Rates Clearance Certificate from the relevant Municipality. If the property is sectional title, this will need to be obtained from either the Body Corporate or Managing Agent. cca credit division service

• Cancellation figure if there is a bond on the existing property. credit free report service

• Call for the Title Deed. card credit customer discover

Electrical Compliance Certificate

It is legislated that an electrical compliance certificate must be obtained with each transfer of immovable property after 1 January 1994. The cost of this must be born by the seller. Buyer s Bond If the buyer has obtained a mortgage bond for the balance of the purchase price (or in many cases for 100% or even up to 108%), the bank concerned will instruct the Conveyancer to draw up all documentation required for the client to sign. The bank will also annotate any special conditions that need to be adhered to prior to registration. A guarantee of funds available will need to be obtained from the bank issuing the new bond. credit repair report service

Costs

All costs relating to the transfer of fixed property need to be paid prior to registration of transfer and will include the following: credit legal repair service

• Transfer Duty or VAT, depending on the transaction. cic credit monitoring service

• Rates and levies to paid up to date by the seller. ccs credit division service

• Conveyancing fees - two sets of documentation are drawn up if there is a bond in place and this cost must be paid by the buyer. credit service union worker

• Bond cancellation costs, if applicable (payable by the seller). 1st credit service union

Deeds Office Procedures

The Conveyancer will lodge the documents they have prepared with the Deeds Office for registration. If a mortgage bond is to be registered or cancelled, the Conveyancer attending to the registration of the bond will lodge their documentation simultaneously with the transfer documentation. Two examiners in the Deeds Office will then examine the documents to ensure that they comply with all the relevant legislation and regulations. Once all documents are found to be in order and ready for registration, they are executed by the Conveyencer approximately eight working days after being lodged with the Deeds Office. On registration, the buyer becomes the legal owner of the property. Approximately one month after registration, the Title Deed will be released from the Deeds Office reflecting the new ownership. Normally, if there is a mortgage bond, the financial institution will keep the Title Deed in safe custody. card chase credit customer

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Property Investment 07 May 2007 / by Gina Schoeman Making sense of physical property versus property funds I recently sat amongst a hot debate in one of my favourite restaurants in Johannesburg where the samples of both red wine, and our meal, depicted the conversation - bold, flavourful and larger-than-normal in size! The topic at hand was the choice to invest in physical property, or property funds as listed on the JSE. The topic remained with me the following day as I deliberated the various strengths of each argument (while at the same time, the various strengths of each bottle our table consumed). card chase credit service

Listed property funds are essentially a portfolio of different types of properties and, one of the most probable advantages of this is that an investor is exposed to diversification far easier than if the same diversification were looked for in physical property. Further, the amount of liquidity needed to purchase property funds is very low in comparison to physical property; an investor who purchases physical commercial property is usually required to place about a 30% deposit on the property. This is often substantially large (depending on the initial price of the commercial property) and so, investors may choose to rather purchase residential property for buy-to-let purposes (however, the return on investment, due to a smaller capital outlay, would be smaller). Should an individual choose to purchase listed funds (unit trusts or shares on the JSE), the minimum amount that must be purchased is 100 units, and subsequently, the price would be determined by the current price per unit (at current levels, the average outlay for a listed property fund may hover anywhere between approximately R500 - R3000). citi credit monitoring service

Investors looking for a smaller capital outlay (similar to that of listed funds) may choose to rather purchase physical residential property, as it is possible to receive a 100% or 108% mortgage bond as an appropriate means to avoid any large initial capital outlays. But, it is important for the investor who chooses this physical residential property to realise that although a 100% (or 108%) mortgage bond may suggest no initial deposit, a large line of credit will still be attached to his/her identity. According to Standard Bank house price data, the median price for a house in South Africa hovers around the R530 000 level so far for 2007. As a result, for investment purposes, the monthly instalment required on this loan size will need to be somewhat matched with the rental yield received for the property, if a cash flow positive physical property investment is what is sought-after. credit plus service union

An additional difference between physical and listed property is the management thereof; listed property comes with its own set of fund managers, while the initial purchase of a physical investment property will lie in the hands of the holder and their own personal access to information and advice on where to purchase (however, fund managers do come with certain administration fees). credit farm service

From an economic point of view, a simple cost-benefit analysis should be done by any individual considering both investment options. And, other than the plain black-and-white differences between both choices, the more intangible personal preferences of the investor must also be taken into account - e.g. risk appetite, ability to give time for administration requirements, level of hands-on ability, etc. The gains for both investment types can be significant; however, this all depends on the amount of activity that takes place in both markets, together with the initial capital outlay and the level of involvement of the investor. 1st credit federal service

That night, the main crux of the discussion came down to the mere fact that where physical property is more hands-on, listed property is determined largely, and reacts more quickly, to market speculation. As a result, although the physical property market is somewhat slower in reaction to that of the listed property market, the general benefits of either one are exclusive to each investor s unique needs and personal view on risk and administration. If my memory serves me as well as the ma tre d served our table, the concluding remark before moving onto dessert was that, similar to the red wine we were sampling, property becomes a more interesting and discussed investment with age - whether it by physical or listed. credit paychex service tax

Lightstone uses the well-known repeat sales methodology in deriving its residential property price indices. The repeat sales methodology aggregates the observed price changes in actual residential property units that have sold at least twice within a specified period. The Lightstone Indices track the actual changes in individual house prices within each defined geographic area, and are therefore not distorted by changes in the mix of properties transacting during the period (e.g. an increase in affordable houses being sold versus luxury houses). credit service tax

National house price inflation recorded 24% average for 2006, but is still on a declining trend

After 33% in both 2004 and 2005, the Lightstone National Price Index showed average house price inflation declined to 24% in 2006. On a monthly year-on-year basis, the growth trend remains steadily weaker, and had reached 19.4% by December 2006. The downward trend is broadly in line with the other major house price indices in the market, although the inflation rate is higher. aeon credit service

The important new insights, however, are gained when examining Lightstone s new sub-indices. Coastal Property suffers heavily as downturn gathers steam The Lightstone Indices shed new light on the performance of genuine coastal property. The Coastal Index tracks property prices for property within 500 metres of the sea. Comparing the Coastal with the Non-Coastal Indices, one sees that coastal property s appreciation during the boom was nothing short of meteoric. Its inflation rate significantly exceeded that of the non-coastal segment from May 2002 to September 2005, the major part of the boom years. credit one service union

The holiday/getaway nature of a significant component of coastal property probably may have a lot to do with this market s performance. This would arguably make the coastal market significantly more interest rate sensitive than the inland market, as a sizeable chunk of this market would not be for primary residential purposes and therefore would be less essential in nature. Thus, as local property responded to massive interest rate cuts post-1998, leisure/holiday buying may have boosted the coastal strip to a far greater extent than the non-coastal market, which is probably far more driven by genuine residential demand or by returns. bad cell credit phone service

This is believed to be the key reason for the Coastal Index reaching a monumental 64% year-on-year inflation rate in November 2004, while the Non-Coastal Index inflation rate peaked at only 34% year-on-year in February 2005. The converse also holds. By December 2006, the coastal inflation rate had dropped to 4.2% year-on-year, and prices had begun to decline on a month-on-month basis. Rising interest rates (with this market arguably having greater interest rate sensitivity) and a massive deterioration in coastal affordability in recent years is believed to be responsible. By comparison the Non-Coastal Index recorded a solid 20.3% inflation, having slowed far less sharply. counseling credit debt service

Looking towards the lower end for better performance

Lightstone also groups areas according to the average price level of the units in the area, classifying areas into 4 categories, namely luxury , high value , mid-value and affordable . This is as opposed to grouping houses according to the price of each house. The logic behind this is that even if a certain house is priced towards the top end of the property market, but the average price level of its specific area is somewhat lower, the performance of that house is more likely to follow the general trend of the area than the trend of its price class. card credit payment service

For the first time, we can begin to confirm what many of us have long believed, i.e. that the lower down the property price ladder one goes, the better the price performance. As at the end of last year, that conventional wisdom still held true. card credit merchant

During the major part of the boom period, from 2001 to 2004, it was the Luxury Areas category that was generally the best performer in terms of price inflation, followed by High Value, Mid-Value and Affordable in that order. However, it would appear that the affordability issue began to creep in as the boom progressed. The price inflation of the High Value segment overtook the Luxury segment in mid-2004 before itself being overtaken by the Mid-Value segment later that year. The Affordable segment became the star late in 2005. counseling credit family

Affordability aside, it is possible that something of a relative oversupply of new housing stock developed towards the upper end. It was noticeable in the building completions data that the average size of house actually rose steadily throughout the boom years. annual credit report request

At the end of 2006, the relative performance still improved as one moved down the price scale, but all categories showed declining year-on-year price inflation. Major Provinces - Gauteng, the solid one, KZN the sensitive one Of the three major provinces, the Lightstone Provincial House Price Index shows two of them were arguably more volatile during the boom years. From January 2000 to December 2006, house prices in Gauteng rose by 283%, Western Cape by 275%, while KZN outperformed them both with a cumulative inflation rate of 296%. area bay credit service

Over this period though, Gauteng looks to have been the most stable of the Big Three. At the height of the boom, Western Cape house price inflation peaked at 43% year-on-year in December 2004, and KZN at 41.1% in October 2004. Gauteng, on the other hand, peaked at 29.6% in February 2005. atlanta consumer counseling

Significantly, Gauteng has slowed less sharply, and as of December 2006 its price inflation rate was slightly above the other two, recording 17.6% compared with 15% in the case of the Western Cape and 14% for KZN. account card credit merchant

Of concern is the steepness in the pace of decline of KZN during the last few months of 2006. It would appear that the decline suddenly picked up speed from the middle of 2006. Could it be that this market is far more sensitive to interest rate hikes than the other two This could well be the case. It is noticeable that back in 1998/99 KZN showed the sharpest price deflation and the sharpest pace of short term recovery from late 1998 to May 2000 aspire card credit customer

KZN s formal housing market is far smaller than that of the Western Cape even though its economy is similar in size and it is far more populous. This is because it a significantly poorer province on a per capital basis and a larger chunk of the population lives outside of the formal housing market. Furthermore, the province has a large coastal holiday property market, which is believed to exert a more significant impact on the province s overall market than is the case in the Western Cape. card counseling credit service

KZN s holiday property market is very localised, with the inland provinces population being buyers on a large scale. It is believed that this holiday property component of the KZN market is highly interest rate sensitive due to it being less essential in nature. As a result it has dropped off quite significantly due to deteriorating affordability as well as mild increases in interest rates last year. card credit online processing

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