Newsletter - 1 June 2005
"South African property is still 33%
undervalued" This was the sentiment of Ian Fife, the property editor for
the Financial Mail, at the recent SAPOA Convention held at Sun City.
STOP PRESS!! We have to tell you about our latest coup: Ian Fife will be
attending our next event on the 12th of June! Ian is one of South Africa's
most highly respected property gurus and will be in London to talk about the
South African property market. We have managed to persuade several other key
speakers to attend, such as the Managing Partner of strb Buchanan Boyes Smith
Tabata, Andy McPherson; as well as some of South Africa's top property
developers who will be bringing their latest developments with them. We only
have 150 tickets available for this event, so make sure you book yours today!
More about this later...
What a month!! We have some excellent news on mortgages (having made an
important break-through with the banks, we can now get pre-approvals as well as
100% finance); we made some excellent contacts at the recent SAPOA convention;
we've got some great news from the Homecoming
Revolution's latest event; we've been extremely busy with some unusual
problems on our clients' properties; and we have found an excellent new
furnishing addition to complement our complete property investment
package.
A Brief Round-Up "Earlier this month the
Constitutional Court ordered the government to pay damages to the owners of
Modderklip farm in Gauteng because it had not moved 40 000 squatters from the
property." This is being regarded as a landmark ruling that further entrenches
the rights of property owners. (Further details available here). Meanwhile,
inflation remained stagnant at
3.9% and has remained within the government's 3 to 6% target range for the 20th
consecutive month, which is fuelling speculation for further interest rate
cuts.
A Banking Break-Through Around 18 months ago South
African banks stopped providing mortgage pre-approvals. Without pre-approved
finance, it is difficult to know how much you can afford or which properties you
can consider, and it means you can't have your finances in place to swoop in on
an excellent property investment before it's too late. However, after much
wrangling, some of the banks have agreed to provide our clients with this
service once again - a minor victory for all our persistence &
perseverance!
More good news is that they are now promising to give us up
to 100% finance for South African expats! Previously, banks have regarded South
Africans overseas as higher-risk clients, and have thus only offered up to 80%
or 90% finance. Obviously, both of these offers have their terms and conditions.
For more information please contact our London office.
The 2005 S.A.P.O.A. Convention The South African
Property Owners Association recently held its 2005 Conference at Sun City, which
was attended by over 1,000 people, including ourselves. As well as giving us a
fantastic insight into the prospects for the property market, we also had the
chance to network with people from all the major companies in the property
industry. Watch this space as quite a few of them have shown their enthusiasm to
work with us in marketing their latest properties.
The market outlook was
very positive, with Simon Fairchild of the International Property Databank
saying that "South Africa [has] the best performing property market in the
world." When asked about the future prospects of the South African property
market, Frank Gormley (chairman of Howard Holdings plc, a large Irish property
development company with a growing investment in South Africa) had this to say:
"In Ireland between 1984 and 1994, property prices went up 10 times. Many people
thought the bubble was going to burst and they sold out. Between 1994 and 2004,
property prices in Ireland have grown 10 times again. I see opportunity in South
Africa and this is why I am here!" Ian Fife echoed this optimism - read more on
what he had to say by clicking here.
Watch out for our next property alert,
and be sure to attend on the 12th of June as we will be showcasing some of the
best new developments that we were able to find!
Positive Outlook for the South African Economy Dr.
Cees Bruggemans, the Chief Economist of First National Bank, spoke at the recent
Homecoming Revolution event held at South Africa House in Trafalgar Square. Some
of the key points he raised were:
- South Africa has now had 26 consecutive growth periods, with a 2004 GDP
growth rate of 4%, placing us third in the world behind only China and
the U.S.A.;
- A record-high level of business confidence exists in the country, with 80%
of businesses and 60% of households firmly optimistic about the future;
- There is a reality change with the South African economy as we are now more
productive and resilient than before;
- There has been a change in pace of the economy, with more investment
growth, a R200-billion investment in infrastructure, decreasing unemployment,
increasing income per capita, and longer, sustained growth runs.
His
sentiments were echoed by Leslie Maasdorp from Goldman Sachs, who explained the
ramifications of the recent ABSA-Barclays deal. The deal is worth R32-billion,
which equates to just under half of South Africa's R65-billion trade deficit,
and is the largest single inflow of Foreign Direct Investment to date. This
reflects the growing confidence of foreign investors, and will add to the
downward pressure on interest rates - more good news for property
investors!
Property Investment Problems Investing in property
can be a very difficult process, and it takes a lot of patience, effort, and
time. Here are a few stories we've encountered in the last month:
- Problems with Financing: One of our clients, a qualified Chartered
Accountant, has been struggling to get more than 80% finance for his property.
With her knowledge of the banking system and with a few well-placed phone calls,
Rachael was able to submit a strong motivation for our clients case and we were
able to secure a 90% mortgage for him.
- Property Transfers with a Tenant: One of our clients' properties
recently transferred into his name, only for him to find out that the seller had
signed a new, under-valued tenancy agreement just before the transfer. Working
with our legal partners, strb Smith Tabata Buchanan Boyes, we were able to annul
the tenancy agreement and we are working with the management agent to raise the
rent or remove the tenant.
- Property is Damaged Upon Transfer: One of our clients recently took
transfer of his property, only to find that there was substantial damage done to
the property between the viewing and the actual transfer. Again, we have been
working with our partners to initiate legal proceedings against the seller.
A Complete Furnishing Package We have found the
perfect apartment furnishing option for property investors: The Furniture
Project offers a complete, all-in-one furnishing solution, that is convenient,
hassle-free and cost effective. You can furnish your entire apartment simply by
clicking through their easy-to-use website, which is perfect for investors
looking at buying short-term holiday rental properties. For more information,
please visit www.thefurnitureproject.com.
And Remember... Don't forget the 12th of June! This
is the first event of its kind: IPS is holding a full-day event focusing
exclusively on South African property. The two big attractions are:
- Information from the experts: We have managed to get Ian Fife, Andy
McPherson and Andy Todd (the MD of Seeff Properties) to attend. You will have
the chance to listen to them speak about the South African property market, as
well as to ask them questions afterwards.
- Excellent new property developments: Half the secret to successful
property investment is choosing the right investment. We have arranged for some
of South Africa's top property developers to bring their latest & best
property developments across to the UK. You will have the chance to secure units
in developments from Atterbury, the Elan Group, Heico, Moreland, Seef, 2Tribes,
JoDev, and more!
If you are interested in South African property
investment, do not miss this event! Remember, places are limited, so book your
tickets now through our website: click here to book now!
Please get in touch with us if
you would like to discuss any of this in more detail.
Happy
investing!
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