Newsletter - 14 April 2005
In This Month's Newsletter... Already a month has passed since our last
newsletter, and what a month it has been! Interest rates have been unexpectedly
cut, the Amanzimtoti development is going full steam ahead (we have sold 11 of
the 15 available units), the Dubai office was officially opened, we've made a
lot of progress with IPS Management, we have expanded our excellent team, and - as always - we have found some fantastic new property
investments, which we will be sending out soon as Property Alerts...
Interest Rate Cuts & Monthly Articles The Prime Interest Rate was
widely expected to remain stable due to current economic conditions. Some of the
factors affecting interest rates and inflation are explained in the article
"Stable Prime Prospects". However, the SARB today unexpectedly cut interest
rates by 0.5%, bringing the prime rate down to 10.5% (see the article "Prime
Cut"). All of the large retail banks are expected to follow suit with mortgage
interest rates.
So what does this mean for overseas property investors?
Firstly, monthly mortgage repayments are reduced. Secondly, as people can now
afford to borrow more, demand increases, and so should house prices. And
thirdly, interest rate cuts tend to devalue the local currency, meaning the rand
should weaken against the dollar & pound. In the aftermath of the
announcement today, the rand lost 3% against the dollar and 2% against the
pound, which makes property even more affordable to off-shore investors.
However, the third point is by no means a long-term effect, which makes now a
very good time to be investing!
We have also included an article on tax
("Tax 101 for Foreigners & Expats"), to provide some more insight into the
tax implications of owning property as a foreigner or South African expatriate.
Property Developments & Property Alerts We have found several
excellent property investments which, if you are suitably subscribed, you will
receive notice of via the IPS Property Alerts. In addition, our team in South
Africa continues to source the properties that meet our clients' individual
investment requirements. We thought we would also give you advanced notice about
two new property developments which will soon become available, one being in the
West Rand of Johannesburg and the other in Rondebosch, Cape Town. As
these "in-house" developments will fall under the umbrella of our IPS
Developments operations, any units purchased through IPS will be substantially
discounted. As always, our registered clients will get first priority before the
alert goes out to our broader database, after which we will make them publicly
available. So watch this space!!
South African Outlook
Scott took the opportunity on his recent trip back
to South Africa to visit the three main regional nodes, as well as to meet up
with several industry leaders, our strategic partners, and the local IPS teams.
This is what he had to say about his trip:
"The Joburg property
market continues to grow. With the economy growing strongly and with
approximately 20,000 people arriving in Joburg every month, the demand -
particularly for affordable housing - is very buoyant. I believe that todays
half-a-percent drop in the interest rate will spur this market on even further,
and there is no time like the present to get involved."
"KZN is touted
as the province to watch in 2005 and it has really started off in this fashion.
You have an excellent speculative investment opportunity in the rejuvenation of
The Point (in Durban) and most of the country is now waking up to the value
which can still be found on the KZN South Coast. I must say I also went up to
Sodwana, Mibibi and Kosi Mouth, which are undiscovered little gems."
"I
was in Cape Town for a week and the growth there is definitely slowing after the
substantial gains of the last four years. However, I still believe there are
great investments out there if you consider the tourism potential Cape Town
offers. 75% of the regional enquiries we get off the internet are for the
Western Cape - it's a basic question of supply and demand!"
"Finally, I
visited what I believe is going to be one of the jewels in South Africa's
property crown. I was fortunate enough to be on a private flight over Pinnacle
Point, an exclusive golf estate outside of George. It is situated right on the
cliffs, with seven holes along the coastline and with breath-taking views (I've
uploaded a few of my amateur photographs:
Pic 1,
Pic 2,
Pic 3,
Pic 4, &
Model). The whole development is being thoughtfully planned in such a way that every
single property will have amazing sea views. They even have two private beaches.
Although the property prices have doubled since they started selling 2 years ago
and more than 90% of the development has already been sold, the completion of
the golf course is still 18 months away and I feel there is every opportunity
for prices (even the resales) to double again."
Amanzimtoti Progress The Maia Sands development has been moving ahead
full-steam, with Brad in the KZN-office doing some fantastic work making sure
everything is in order. 11 of our clients have bought off-plan, and this
promises to be an excellent investment opportunity for capital appreciation. If
you would like to read more about the development, you can
find
more details online here .
Dubai Office - Up & Running On the 14th of March, the Dubai branch
of IPS was officially opened. Scott flew over to the UAE and joined up
with Debbie and Fain for a successful presentation of the IPS concept. The
guests were very impressed by the comprehensive nature of our offering,
particularly with the way that we have integrated the products and services of
our strategic partners, namely Buchanan Boyes, FNB, SGM-FX and JustLetting
(click on the logos below to visit their respective sites). There are
approximately 40,000 South Africans currently living & working in Dubai,
earning tax-free incomes and very much needing the type of service that IPS
offers to help them invest in property back home. We will keep you updated with
progress in the Dubai branch. Please forward this email on to anyone you know of
who is living out there - alerternatively they can get in touch with Debbie.
IPS Management - Up & Running Alistair has been exceptionally busy
arranging & organising everything to do with the property management
solution that will complement the IPS suite of services. More information is
available on the website (please
click here).
As an overview, IPS is now set up to
manage properties in South Africa, and for those of you with properties in the
UK, we are offering two flavours of property management: typical long term lets
and short-term lets with guaranteed rental returns. The two major advantages of
getting IPS to manage your properties are: IPS is a South African company with
offices in both London and South Africa; and our management solution is
completely web-based, allowing you to view your property management details
online, at any time. The UK offering is particularly focused at South Africans
looking to return home, but wanting to hold on to their UK investment
properties. Please forward this email on to anyone you know of that may be
interested!
For more information, please contact Alistair.
Welcome Aboard Annie! As Nick in the Cape Town office begins to focus
more on IPS Developments, we have had to find a suitable replacement to ensure
that we continue to source top-quality property investments in the highly
sought-after Western Cape & Garden Route. Through our association with
Nox Rentals
(Cape Town's premier property management
company) we have been able to poach Annie Davies from a cape estate agent. We
are very excited about having her on board, and she has already shown her
potential by helping one of our foreign clients complete a R7.25 million
investment in Camps Bay!
Getting up to Speed If you would like to do some background reading
before getting started in the property market, we would like to recommend Kyle
Harris' new book, The Power of Property . It's an easy-to-read
book that covers the basics of property investment, including the jargon, the
laws, the tricks & traps, and the important numbers that you should know. We
are currently selling the books in the UK, at £13 each (cost price) or £15
including UK delivery. To get your copy, click here.
Please
get in touch with us if you would like to discuss any of this in more
detail.
Happy investing!
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