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Tumbling share prices and financial upheaval around the world should not cause undue alarm among SA property investors and homeowners. So says Aaron Hodson, head of international growth for Harcourts, the Australasian real estate group that recently bought a multimillion share of SA group Homenet. He notes that historically, investor interest in bricks-and-mortar has always picked up when stock markets declined, and given property a boost. “When share prices fall, people look for security for their money elsewhere, in gold and property, for example, and this looks set to be the case in SA this time around too, as there has been a distinct increase in the number of potential buyers coming to the market in the past three months”. He says that amid the current global financial turmoil, the SA real estate market also has another important factor in its favour, which is not the case in more developed countries such as the US and the UK, where property prices are taking a pounding. “This factor is SA`s huge `market in waiting`, made up of millions of people who used not to have access to the property market but are now getting good jobs and salaries and regard home ownership as very important. “They are continuously feeding into the lower end of the market and there will be a positive knock-on effect all the way up the scale as more and more grow out of their first homes and start upgrading. This will underpin property`s status as a solid investment.” Homenet CEO Martin Schultheiss says SA also has the advantage of a strong banking system that has been relatively untouched by the global meltdown. “Yes our bank are extremely cautious about all forms of credit at the moment, including home loans, but this forces homebuyers and investors to be better prepared for property purchases - which are after all major transactions – and more thoughtful about what sort and size of home they buy, and that is not a bad thing. Meanwhile, Hodson says, there is also no cause for despair among estate agents and agency principals either. “They need to remember that hosing is a basic human need – people will always get married, get divorced, die, have children, be promoted and be moved around, no matter what is happening in the financial markets, so there will always be a market for homes. “There will also always be sales, and while many agents are dropping out of the industry now, we see this as a time of great opportunity to recruit strongly and gain a bigger share of the market. Indeed, those companies which took this same view when interest rates went through the ceiling and sales fell through the floor in 1998 are the major players in the sector today.” Indeed, says Schultheiss, this is a big part of the rationale for Homenet`s recent deal with Harcourts. “With 600 offices, this group has the business systems, marketing methods, technology and tools to enable our franchisees and agents not only to see out the tough times, but to succeed in a sector that is rapidly being globalised. In just a couple of weeks we have already attracted six new offices to the group and the prospects for further growth are excellent because of the Harcourts value proposition.”
MSN Property 23 October 2008
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Landlords! Protect your investments! 22 May 2009 Landlords are urged to protect their investments by being fully aware of the conditions contained in the Rental Housing Act which governs residential rentals. Statistics show that 48% of tenants nationally are not paying their rent coupled with the fact that many are fully aware that it takes at least three months to obtain an eviction order before they have to move. This means that residential property owners can be prejudiced without rent income for at least three months. An effective Agreement of Lease with clauses stipulating the process which will to be taken if a tenant does not pay rent or services is essential. It is recommended that a landlord takes immediate steps to recover any outstanding monies due by his tenant and thus mitigate his losses. It is essential that these steps are taken prior to applying to the courts or a Rental Tribunal for an eviction or attachment order. In the current economic climate many tenants are either losing their jobs or agreeing to a reduction in salary, and this affects their capacity to pay rent and their other obligations. These tenants have to make major decisions about moving because to remain in a property that they cannot afford may lead to their becoming black listed and which will have a permanent bearing on their credit history. Most landlords are unaware that they are obliged to pay interest on deposits held on behalf of the tenant even if their leases do not state this. The Act takes precedence in all cases even if there is a clause in the lease saying that there will be no interest paid. It is important to note that payment of interest is always demanded by the courts because it is a tenant’s right to be paid interest on his money. Landlords should also be aware when hey deduct any amounts from the damages deposits held that only certain expenses may be deducted and that these should be stated in the Agreement of Lease. The Act expects that a joint incoming inspection must be conducted before the tenant moves into the property, and that a joint outgoing inspection will take place as the tenant moves out. The comparison between the who dictate the damages that may have taken place and the reasonable cost of their repair may be deducted from the deposit. Once again if these inspections have not taken place and a tenant approaches a court or the Rental Tribunal for non refund of his deposit, the chances are that his deposit plus interest will have to be refunded. Landlords currently feel most unhappy about what they believe to be an unfair Rental Housing Act, but in the main most landlords are unfamiliar with its workings and fall short with regard to their processes when applying the act. A tenant can be evicted, an attachment order can be issued, and damages can be deducted, but only in terms of the act. A landlord may not take the law into his own hands and do as he pleases without approaching a court of law or Rental Tribunal after the necessary punitive measures have been put into place. |