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February 2009
 
2009 GREAT TIME TO BUY
Tide Turns for Home Owners in 2010
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RESIDENTIAL LIFESTYLE PROPERTIES FOR SALE IN SOUTH AFRICA:
Gauteng:
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Western Cape:
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Boland & Overberg:
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General Comment by Dr Andrew Golding
CE Of The Pam Golding Property Group
Budget Comment 2009 by Dr Andrew Golding
CE Of The Pam Golding Property Group
Mood of Optimism says PGP KZN
Renewed Confidence Is Starting To Underpin The Homes Market
By Ronald Ennik, Managing Director of Pam Golding Properties in Gauteng
PROPERTY OUTLOOK
The Sun also Rises

At last the climate has improved for the South African housing market. There is increased activity, a new mood of optimism, interest rates are falling. The million dollar question is: Time to Buy?
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GENERAL COMMENT
By Dr Andrew Golding, CE of the Pam Golding Property Group
"The forthcoming Monetary Policy Committee meeting will hopefully see some additional relief afforded to consumers in terms of a further reduction in the repo rate, with a resultant drop in the interest rate," says Dr Andrew Golding, chief executive of the Pam Golding Property (PGP) group.

"With more rate cuts anticipated during 2009, whether these translate into a total interest rate reduction for the year of three, four or even five percent. There is no doubt that, while these will take time to flow through the system, the immediate effect will be to stimulate more positive sentiment, which is always a key driver in the marketplace and for the economy in general.

“Naturally such rate cuts will also help alleviate the pressure on those paying mortgages on their homes and help increase affordability for those seeking to acquire their first homes.

"The current status quo as far as the residential property market is concerned is that of an air of increased optimism. The start of each calendar year generally tends to have increased transactional movement in the residential market – particularly among those relocating for business reasons.

“Although there are currently less overseas buyers than usually evident at this time of the year, we are still receiving enquiries from interested foreign buyers – including South African expatriates – as they perceive increased value in our property market, with sound investment opportunities currently available.

"We are also seeing an increase in the number of buyers prepared to commit to offers as buyers and sellers have become relatively more acclimatised to the current economic scenario and more stringent lending criteria.

“However, it has become apparent that the general requirement by financial institutions of at least a 10% deposit for the purchase of a home is creating major constraints - particularly for first time buyers - with the knock-on effect of sustaining reduced transactional volumes. Generally and unsurprisingly, we also note a trend towards more cash deals as opposed to mortgage-financed sales in transactions than previously.

"From a residential property pricing perspective, we anticipate that house prices are likely to decline this year (2009) by approximately 10% - in real terms, with the start of a recovery probable towards the end of 2009. However, with increased positive sentiment we also expect transaction volumes (units) to increase by around 15% over 2008."
For further information contact Dr Andrew Golding at 021 710 1700.
Issued by Gaye de Villiers Tel: 021 683 7788 or 083 325 1939

2009 BUDGET COMMENT
Dr Andrew Golding, CE of the Pam Golding Property Group
Once again the Minister of Finance is to be commended on presenting a Budget that focuses on key issues, which include sustaining economic and employment growth, promoting investment, increasing investment in infrastructure, fighting crime, alleviating poverty and fostering fiscal sustainability, despite the deteriorating global scenario. In addition, the personal tax relief is to be welcomed in terms of increasing take-home pay for cash-strapped consumers.

Ongoing investment in infrastructure, including roads, public transport and housing programmes is positive, as are steps to encourage energy efficiency and reduce harmful emissions, with tax incentives for companies to invest in energy-efficient
technology such as investment in green buildings.

It is regrettable that the fuel levies are to increase by 23 and 24 cents per litre in respect of general petrol and diesel levies, in addition to the 17.5 cents increase in the road accident fund levy, as fuel remains a significant cost factor for South Africans and the economy.

Turning to property specifically, the Minister is to be lauded for encouraging banks to extend credit to worthy customers as it has become apparent that generally, financial institutions are currently going beyond even the bounds of the stringent NCA regulations.

It is disappointing that the much hoped for increase in the transfer duty threshold - which currently stands at R500 000 - did not materialise. Increasing this to R750 000 or more would have had the effect of considerably contributing towards making home ownership more affordable and within the reach of consumers, particularly first time buyers.

This would be a reasonable request given the fact that, despite the current status of the property market, the cost of acquiring a home has increased significantly.
For further information contact Dr Andrew Golding at 021 710 1700.
Issued by Gaye de Villiers Tel: 021 683 7788 or 083 325 1939

MOOD OF OPTIMISM, SAYS PGP KZN
Pam Golding Properties KwaZulu-Natal region is optimistic about the residential property market place.

Carol Reynolds, manager of PGP's Durban office says: "We perceive a new mood out there – one which is more realistic in terms of sellers' expectations, while buyers are also being more realistic in terms of looking at properties which they can afford and also ensuring they are pre-qualified for finance.

“This is coupled with anticipation of interest rate reductions during the course of 2009, which are expected to have a positive effect on the market in general. Along with a greater understanding of the current status quo in the marketplace, there's a more buoyed sentiment out there, underpinned by a realisation of the sound long-term investment value of solid bricks and mortar.

"In addition, we are finding that the tougher economic conditions have seen reputable agencies with professional agents coming to the fore, with the new curriculum for estate agents also having a positive impact on the industry in general.

“Amid the more constrained and competitive trading conditions we are also seeing a move among successful and professional agents to leading property brands and over the past 10 months we have increased the number of agents at our PGP Durban office from 16 to 26.

“Clients are seeking out reputable agents and leaning on them for sound advice, and as a result both buyers and sellers are more well-informed and have in the main adjusted to the current market," she says.

Reynolds adds: "We certainly are receiving many more enquiries than previously. In the Durban area, including Berea, Morningside, Glenwood and Durban North, we are seeing an influx of buyers and a greater attendance at show days with approximately nine to 15 people per show house.

“Being a holiday destination the Durban area attracts high interest over the December/January holiday season, particularly as at this time of the year there's also a trend towards those wishing to buy or rent property due to relocation from other areas such as Gauteng, and usually for business reasons."

On the lower south coast in the Margate and surrounding area PGP has experienced a busy festive season with even in excess of 25 serious buyers at show days and offers being received. Properties sold were mainly sectional title beachfront apartments priced between R1.6 million and R3.5 million.

Dina Porteous, PGP's area principal says: "The bulk of buyers are looking to acquire second homes and in addition to SA-based purchasers these include those who have returned from overseas - some as a result of the harsher economic situation over there."

On the north coast in the Umhlanga and Umdloti areas PGP joint area principals Peter Pringle and Elwyn Schenk report a substantial increase in enquiries since late 2008 - with a busy festive season, which saw sales being concluded.

Says Schenk: "Buyers are a mix of locals and those from upcountry. Here again clients have a keener sense of the market and a more upbeat outlook in regard to South Africa, particularly when compared globally."

In the Ballito area and surrounds, Clive Greene, PGP area principal says enquiries have also been very brisk with serious buyers in the market and prepared to pay realistic prices. Here PGP also reports an upsurge in local buyers, in addition to those from out of town.
Contact PGP KZN regional office at 031 313 7300
Issued by Gaye de Villiers Tel: 021 683 7788 or 083 325 1939

RENEWED CONFIDENCE IS STARTING TO UNDERPIN THE HOMES MARKET
By Ronald Ennik - Managing Director of Pam Golding Properties in Gauteng
Current market fundamentals indicate that the weakness of the residential property sector seems set to endure at least until the fourth quarter of 2009 – during which time house prices are likely to show a further decline of about 10% in real terms before bottoming out.

However, homeowners can take heart from a groundswell of increasing business confidence and improved market sentiment that is beginning to build up on the back of a number of recent positive developments, which together augur well for the inevitable start of the next market upturn.
Most significant among these is the positive, confidence-building, national Budget which Finance Minister Trevor Manuel presented to Parliament recently – the substance of which clearly shows that, thanks to past skilful management of the economy, South Africa is in better economic shape than most other countries and is thus escaping much of the direct fall-out of the global economic meltdown.

Declining Interest Rates
Another major plus factor is the downtrend in interest rates, which seems likely to continue for the rest of 2009 – thus reducing the debt burden of existing (cash-strapped) home bond holders while, at the same time, opening the way for those previously sidelined by non-affordability to now come into the market as buyers…provided, of course, that they can raise the deposit.

Confidence and sentiment are the key drivers of the residential property market. Hopefully, conditions are now at, or close to, the point where banks will begin to loosen the tight screws they have held in place on mortgage lending – a move which will encourage the recovery process, albeit within the constraints set by the National Credit Act, which has been in place for over a year.

This will release the pent-up stock of good quality homes that sellers have been holding back from the declining market - to the extent that as much as 35% of homes normally up for sale in any given year did not go on offer in 2008.

Against this background, early indications are that unit sales volumes in the overall market could increase by around 15% this year before the anticipated upturn really takes hold in 2010.
Contact Ronald Ennik on +27 (0) 11 380 0000 or email at rennik@pamgolding.co.za
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