Land reform and expropriation: What it actually means for SA
The heated debate about the proposed amendment of the South African Constitution to allow for land expropriation without compensation has dented the buoyant confidence that many South African middle-class property owners have felt about their property investments. However, much of the insecurity and fear are based on misinterpretation and a serious lack of reliable data.
“On one hand we have AgriSA claiming that already nearly 30% of agricultural land is already black-owned, while others are saying that these policies, if adopted, will destroy the free market economy and local and overseas business confidence in SA,” says Rowan Alexander, Director of Alexander Swart Property in response to an article in the Mail and Guardian by Ben Cousins, Professor of the University of the Western Cape’s Property Land Reform and Agrarian Studies Department, and to a talk given to Durbanville Business by Professor Nick Vink of the University of Stellenbosch’s Agricultural Land Economics Department. Professor Vink is also a member of the South African Reserve Bank’s Advisory Panel.
Landlords, a good credit record doesn’t mean a tenant will pay
While a credit score can be a fool-proof predictor of future account payment behaviour, the same cannot be said for predicting future rent payment behaviour.
Johette Smuts from PayProp, national processor of rental payments, says credit scores are designed as a measure of creditworthiness, and credit is not a feature of rental contracts.
“It is increasingly clear that credit checks alone are not adequate in fully understanding the extent of non-payment risk that a new tenant presents.”
Smuts says PayProp has for some time offered a Tenant Assessment Report, designed in collaboration with Compuscan.
Jobs created by tourism great for SA's property market
The word tourist describes someone who is visiting South Africa for a limited time and is probably not going to buy a property here - so why is the tourism industry so important to the real estate sector?
“There are two main reasons,” says Gerhard Kotzé, MD of estate agency group RealNet, “the first being the jobs that tourism creates directly, and the rising number of people that are thus enabled to become tenants, home buyers and property investors.”
According to the latest available figures from Stats SA, almost 700 000 people were employed in SA’s tourism sector in 2016, compared to just over 500 000 in 2006. “This means that more people are employed in tourism now than in mining, and that tourism has proved to be better at creating new jobs over the past few years than manufacturing,” notes Kotzé.
Falling rand is fuelling foreign interest in SA luxury property
As the Federal Reserve continues to raise interest rates in the US and the rand continues to lose ground against the dollar and other major currencies, the appetite of foreign investors for luxury property in South Africa continues to rise.
According to Berry Everitt, CEO of the Chas Everitt International property group, European and British investors are always quick to spot the potential in the weaker rand exchange rate against the euro and the pound, and this is confirmed by the latest report on foreign buying from property data company Lightstone.
”This year we have also noticed an increase in inquiries from other African countries, and a big increase from the other countries in the Brics group, namely Brazil, Russia, India and China, where the word is spreading among a huge and growing number of affluent investors about the lifestyle on offer in South Africa, as well as the value for money to be found in our luxury real estate market,” says Everitt.
Buying savvy: How to find your perfect home in a buyer’s market
Recent reports reveal that in most regions across South Africa buyers are currently spoilt for choice in the property market - even in the burgeoning Cape Town market. One mistake buyers simply cannot afford to make in this current market is to allow the overwhelming amount of stock put them off the task of sifting through the mountain of listings available and delay them in putting down an offer.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says when purchasing in a buyer’s market, time and options may be on your side. However, unnecessarily delaying a decision could also be costly. Take time to do your research and think carefully about your options, but don’t fall into the trap of over analysing.
Susan Watts, Broker/Owner of RE/MAX Living operating in the Southern Suburbs of Cape Town, and who has had to help many buyers adjust from a seller’s market mentality to a buyer’s market mentality, says second guessing yourself after having found a property you like will increase the chances of you losing out on your dream home.