Property Seekers

The Comprehensive Guide To Real Estate

More Signs Of A Buyers Market In 2023

More Signs Of A Buyers Market In 2023 And 2024

According to a report by Lightstone Property, the number of homeowners being forced to sell properties has increased by 80%, adding to the signs of a buyers market in 2023.

The increase in distressed property sales points to the fact that many buyers took advantage of the low interest rates during Covid. Only to find they could not afford their new bond repayments as interest rates normalized a couple of years later.

The prime interest rate hit a multi-decade low of 7% in 2020 and remained below 8% until May 2022. Successive rate hikes have since then pushed prime to 11.75% in May 2023.

The report also notes that the exceptionally low interest rate environment created an opportunity for new buyers to enter the market. And for existing homeowners to 'buy up' – but it also created the possibility of too many buyers overstretching themselves.

Homeowners Are Now Struggling

Many homeowners are now struggling to keep up with their bond repayments.

Buyers should carefully consider their financial situation before purchasing a property and speak to a bond originator about their options.

It is important for homeowners to be aware of the risks associated with taking on a bond, and to ensure that they have a solid financial plan in place to avoid being forced to sell their homes.

It is true that the current trend of homeowners being forced to sell their homes is a clear sign of a buyer's market. However, this trend is also indicative of a larger problem - many homeowners are struggling to keep up with their mortgage payments.

Downsizing your property may be a viable option for some homeowners, but it is not a one-size-fits-all solution. It is best to carefully consider your financial situation and to seek professional advice before making any decisions.

Interest Rate Announcement 23 Nov 2023

Interest Rate Announcement 23 November 2023: What to Expect

The South African Reserve Bank (SARB) will announce its decision on the repo rate on Thursday, 23 November 2023. This is the final interest rate announcement for 2023 and consumers will be hoping that SARB Governor, Lesetja Kganyago, will offer some relief in the form of a rate cut.

However, economists are not optimistic about the prospects of a lower interest rate, as inflation pressures and a weak rand continue to pose challenges for the SARB. The consensus among analysts is that the repo and prime interest rates will remain unchanged at 8.25% and 11.75%, respectively, until the second half of 2024.

The table below shows the interest rate decisions made by the MPC in 2023:

DateRepo RatePrime RateChange
26 January7.25%10.75%+0.25%
30 March7.75%11.25%+0.50%
25 May8.25%11.75%+0.50%
20 July8.25%11.75%0.00%
21 September8.25%11.75%0.00%
23 November???

The repo rate is the benchmark interest rate at which the SARB lends money to commercial banks, while the prime rate is the interest rate that banks charge their customers. The SARB has raised the repo rate by 1.25 percentage points since January 2023, in an attempt to curb inflation and protect the rand from external shocks.

How Does The SARB Decide Hike Or Cut Interest Rates?

The SARB’s Monetary Policy Committee (MPC) meets every two months to assess the economic outlook and decide on the appropriate monetary policy stance. The MPC considers various factors such as inflation, economic growth, exchange rates, and global economic conditions when making its decision. The SARB’s primary goal is to achieve price stability in the interest of sustainable and balanced economic growth. The SARB targets an inflation rate of between 3% and 6% per year, with a midpoint of 4.5%.

The SARB faces the difficult balancing act between supporting the economic recovery and maintaining price stability. While consumers and business owners will be hoping for a rate cut, the SARB is likely to adopt a cautious approach and keep the interest rates unchanged at this meeting. The SARB will also provide its updated projections for inflation, growth, and the exchange rate, as well as its guidance for future policy actions.

How Does The Interest Rate Affect A Home Loan?

Bond AmountMonthly Repayment at 11.75%Monthly Repayment at 11.25%Monthly Repayment at 12%
R 750 000R8,319R8,174R8,464
R1 000 000R11,092R10,899R11,252
R1 250 000R13,865R13,624R14,090
R1 500 000R16,638R16,349R16,908
R1 750 000R19,411R19,074R19,726
R2 000 000R22,184R21,799R22,544
R2 500 000R27,730R27,249R28,180
R3 000 000R33,276R32,699R33,816
R4 000 000R44,368R43,599R45,088
R5 000 000R55,460R54,499R56,360
Residential Property Price Index For June 2023

Residential Property Price Index Report For June 2023

According to the Residential Property Price Index report for June 2023, house prices in South Africa have increased by 2.9% between June 2022 and June 2023. And in particular, property prices in the Western Cape have increased by 4.1% year-on-year.

On Thurs 9 Nov 2023, Statistics South Africa (Stats SA) released its monthly Residential Property Price Index report.

This is the ninth report of its kind since StatsSA published its first report in March 2023. Stats SA developed this property price index in partnership with the South African Reserve Bank (SARB) and with the support of the International Monetary Fund (IMF).

The RPPI aims to measure the changes in the price of new and existing residential properties purchased by households. Only market prices are considered which include the price of the land on which residential buildings are located.

And the primary source data used to estimate the RPPI comes from the Office of the Chief Registrar of Deeds (Deeds office). The Deed office is an administrative record of all property transactions in South Africa.

By comparison, Lightstone recorded similar results to the residential property price index report for June 2023. It reported the National year-on-year house price inflation to be at 3.88% by the end of June 2023. And the Western Cape year-on-year house price inflation at 6.62%.

Isometric Illustration of a street in Bo-Kaap Cape Town

The Dangers Of Buying A Distressed Property

The property market is a very dynamic industry that is constantly adapting to meet the demands of buyers and sellers. Over the most recent 12-month period the pendulum has shifted toward a predominately buyers market. 

According to the data from FNB Home Loans as much as 25% of properties are put on the market due to financial pressure. 

Meaning that the sellers of these homes are struggling to meet the demands of maintaining the mortgage and other costs related to the property. 

As a buyer, this situation might look like an excellent opportunity to secure a great deal from a seller in a desperate situation but in reality, there are a few dangers of buying a distressed property


  1. Sellers under financial pressure may be less willing or able to negotiate on the price. Often the outstanding bond amount is relatively high, and there may even be some overdue rates bills to settle before the transfer can occur. 
  2. Distressed Sellers are not very flexible on time. They most likely need a quick sale, and they cannot afford the luxury of long delays that can arise in subject-to-sales. 
  3. Sellers facing repossession rarely have the time or even the resources to make necessary repairs or renovations, which could result in additional costs for you as the buyer. 

The above are some of the issues to consider about the dangers of buying a distressed property before you even decide to approach a seller with an offer to purchase.

Click here to find a list of bank-repossessed properties in your area or subscribe to your free email newsletter to receive updates directly to your inbox.

When To Change Your Real Estate Agent

The Why And When To Change Your Real Estate Agent

Choosing the right estate agent or agency to sell your property is crucial. A good estate agent can make or break your selling experience. A knowledgeable, experienced, and proactive agent will not only maximize the value of your property but also guide you through the intricacies of the process.

However, there may come a time when you need to reevaluate your initial choice and change your real estate agent to ensure that you are not left stuck with poor service or underperformance. 


The 6 typical issues to consider are: 

  1. Lack of progress after a reasonable amount of time on the market.
  2. Failure to meet agreed-upon deadlines or promises.
  3. Poor negotiation skills leading to unsatisfactory offers.
  4. Lack of market knowledge or outdated strategies.
  5. Inattentiveness to your needs or not addressing concerns.
  6. Any unethical behavior or breach of trust.

Besides the usual issues that might prompt you to change your real estate agent, it is also worth considering whether your agent is employing all the tools at their disposal when selling your property.

In today's digital age, technology plays a key role in the real estate industry. A tech-savvy agent who utilizes online platforms, social media, virtual tours, and other digital marketing tools can significantly enhance the visibility and reach of your property. 

If your agent is not harnessing the power of these tools or is not keeping up with the latest advancements, it will negatively impact the exposure and potential sale of your property.

Take The Property To Potential Buyers

Currently, buyers will only spend about 1 hour every month browsing property portals like Property24, but those same users are also spending on average 2 hours - 3 hours browsing social media every day. 

So it makes sense for your agent to be marketing your property on social media to ensure its maximum exposure. The idea is to take the property to the buyer, not just wait for the buyer to find your property. 

Sea Point Cape Town

Sea Point, Cape Town Listed Among The 40 Coolest Neighbourhoods In The World

According to a ranking by timeout.com, Sea Point secured its place among other trendy neighborhoods across the globe.

This accolade highlights the appeal and charm of Sea Point, located in Cape Town. Nestled between Signal Hill and the Atlantic Ocean, Sea Point is an affluent and densely populated suburb with its own unique character. The neighborhood offers a picturesque coastal setting just a few kilometers from Cape Town's Central Business District.

With its stunning views, vibrant atmosphere, and diverse community, Sea Point attracts locals and tourists alike. The area is known for its leisurely promenade, lined with palm trees and breathtaking vistas of the ocean. Visitors can also find a wide array of trendy cafes, restaurants, and bars, making it a popular spot for socializing and enjoying the local cuisine.

Other notable neighborhoods that are ranked in the top 40 alongside Sea Point include:

  • #2 Smithfield in Dublin, Ireland
  • #5 Sheung Wan Hong Kong
  • #8 Isola Milan, Italy
  • #10 Tomigaya Tokyo, Japan
  • #24 King’s Cross London, UK

Read more: Time Out

Stand Out In A Crowded Real Estate Market

How To Stand Out In A Crowded Real Estate Market

In today's bustling property market, distinguishing yourself as an estate agent is crucial for success. A unique brand, cultivated through careful strategies, can set you apart in the eyes of potential clients. We explore the ways you can create a distinctive identity and thrive in the crowded real estate market in South Africa.


Create a Unique Brand

Creating a unique brand in real estate, or any business for that matter goes far beyond flashy social media profiles or catchy slogans. Your brand is the embodiment of your business philosophy, reflecting how you aim to solve your clients' needs. It encompasses the core values and identity of your real estate business.

Your brand is essentially your promise to your clients. It's the guarantee of quality, trustworthiness, and reliability. The more consistently you adhere to your brand's principles, the stronger and more trustworthy your brand becomes in the eyes of potential clients.


Key Strategies for Standing Out

  1. Niche Specialization: Consider focusing on a specific niche within the real estate market, such as luxury properties, eco-friendly homes, or historic real estate. Specialization allows you to become an expert in a particular area, making you more attractive to clients seeking those services.
  2. Professional Branding: Craft a memorable brand identity that conveys your unique approach and values. This includes creating a distinctive logo, color scheme, and tagline that sets you apart from competitors.
  3. Online Presence: Maintain an informative website that showcases your listings, services, and market knowledge. Engage actively on social media platforms to connect with potential clients and share valuable content related to real estate.
  4. Exceptional Service: Go above and beyond for your clients. Providing exceptional service and building long-term relationships can lead to word-of-mouth referrals and repeat business.
  5. Network: Build strong relationships within the real estate industry. Collaborate with other professionals, such as mortgage brokers, appraisers, and contractors, to provide more comprehensive services to your clients.
  6. Valuable Content: Share market insights, tips, and informative content through your blog, social media, or email newsletters. Demonstrating your expertise in the field can help you stand out as a thought leader.
  7. Client Testimonials: Encourage satisfied clients to leave reviews and testimonials on your website or on platforms like Google My Business and Yelp. Positive reviews can boost your credibility.
  8. Tech Savvy: Embrace real estate technology to streamline processes and offer a more efficient experience for your clients. This can include virtual tours, digital signatures, and data analytics to help clients make informed decisions.
  9. Continuous Learning: Stay updated on industry trends and innovations. Continuing education not only enhances your skills but also demonstrates your commitment to providing the best service.
  10. Community Engagement: Give back to your community through charity and volunteering. Engaging in philanthropic activities not only enhances your brand's reputation but also builds goodwill with potential clients who appreciate your community involvement.

In a crowded real estate market, differentiation is the key to success. You can choose to implement all of these strategies to thrive, or you can focus on three or four that align best with your brand and expertise. By creating a unique brand and consistently delivering value to your clients, you'll stand out in the competitive real estate landscape and build a successful, long-lasting career.

MORCSA

MORCSA advocates for a regulated Bond Origination sector and a member fee

MORCSA the independent body established to organize and represent the bond origination industry are in talks to figure out which authority should regulate the industry and how. To fund their operations, they will charge a small fee on every registered home loan, starting from January 1, 2024.


MORCSA, which stands for the Mortgage Origination Regulatory Council of South Africa, is an organization established to oversee and regulate the bond origination industry within South Africa.

Their primary objective is to ensure the sustainability and credibility of the mortgage origination industry. They aim to achieve this by regulating the conduct and practices of mortgage origination industry participants, including origination consultants and companies.


MORCSA has since announced a new membership fee for participants in the mortgage origination industry. The fee is set at 0.003% of all registered bank-confirmed home loans and will be implemented starting from January 1, 2024.

For Example:
Registered Bonds: R10 000 000
Membership Fee 0.003%
Contribution for the month R300 (exclusive of VAT, if any)


All bond originator consultants, companies, and their management will be required to register with MORCSA and pay the monthly membership fee.

South African Reserve Bank

Economists Predict Another Interest Rate Hike For South Africa In Nov 2023

Economists from Bank of America (BofA) are saying that in November 2023, South Africa is likely to experience another prime interest rate hike by a small amount (25 basis points).

The South African Reserve Bank kept the repo rate steady at 8.25% during its September 2023 meeting, as anticipated, but emphasized that the fight against inflation was not yet done. Policymakers cited concerns about the continued depreciation of the rand and the ongoing pressures on inflation as the key drivers.

Why Is Another Interest Rate Hike Expected?

Well, a few things are going on. Prices of things like oil and food might go up, which can lead to overall prices going up (inflation). For example, bird flu is causing a shortage of poultry products, so the cost of food might increase. Also, the value of South Africa's currency (the rand) is going down compared to the US dollar, making it weaker. All these factors could push up the cost of living in South Africa.

The economists at BofA think that by the end of 2023, the average increase in prices (inflation) will be around 5.5%. They believe the central bank of South Africa (SARB) will raise interest rates to help manage this.


Read More Here: South Africa can expect another interest rate hike in 2023, say economists


Additionally, local economists from the Bureau for Economic Research (BER) at Stellenbosch University are also worried that the SARB might raise its interest rates in November due to concerns about inflation.

The value of the Rand has weakened, which could lead to higher inflation. The central bank aims to keep inflation between 3% and 6%, with a target of around 4.5%. The recent drop in the value of the Rand and concerns about near-term inflation have increased the likelihood of a rate hike.

This potential rate increase is also influenced by the fact that two out of five SARB committee members voted for a rate hike at the September 2023 meeting.

Even though there's some uncertainty about the impact of recent events, like the change in oil prices and conflicts in the Middle East, economists believe that inflation might rise above 5%, leading to a 25 basis point increase in the repo rate from 8.25% to 8.50% to control inflation.


Read More Here: Rand weakness and inflation worries: What’s ahead for SA’s repo rate?

Saville Real Estate Report

The value of Global Real Estate significantly dwarfs the storied allure of Gold

The value of all global real estate (residential and commercial real estate, and agricultural land) reached $379.7 trillion in 2022. That's according to a report published by international real estate advisor Savills.

And by comparison, Gold, with its accumulated value of $12.2 trillion, signifies a fraction, merely 3%, of the vast expanse of global real estate wealth. Its value, while significant, actually pales in comparison to the wealth generated by the real estate market.

Paul Tostevin, the head of Savills World Research, also emphasized the resilience of real estate amidst market uncertainties, reaffirming its status as the largest concentration of wealth globally. The residential property, in particular, witnessed substantial growth, surging by an impressive 21.1% from 2019 to 2022.

This growth was rivaled only by gold, demonstrating the enduring appeal of real estate investments. But unlike gold, real estate also possesses an inherent utility factor and potential for sustained income through rentals and leases, further solidifying its position as a wealth powerhouse.

Conclusion

In conclusion, the comparison between real estate and gold underscores the immense wealth generated by the real estate sector, dwarfing even the storied allure of gold. While gold retains its value and historical significance, real estate stands as a dynamic, income-generating asset that not only surpasses gold in value but also offers a broader spectrum of utility and potential for substantial returns on investment. As global markets evolve, real estate continues to hold its position as the unrivaled repository of wealth.