From Dave's Desk

INTEREST RATES AND PROPERTY PRICES: : A LAYMAN’S PERSPECTIVE

2009-10-22T19:10:00.000-07:00

It’s been a couple of months since the euphoria of the public’s reaction to month-after-month interest rate cuts was at its highest - and just recently (13th August 2009) another 0.5 % reduction! - but what’s going to happen next? …

This commentary is from a layman; I’m no financial expert; I just happen to be involved in the real estate business - and am well old enough to believe that history can usually teach us something about the future!

Take a look at the graph below. It goes back as far as 1980; 29 years can you believe! So here’re some observations, as I say again, from a layman’s point of view.

Firstly, all of those of us with mortgage bonds to service, probably don’t like to recall when we were paying a quarter of our loans off every single year, when the rates exceeded 25 % - and yet our peak this time around, appears to have been a somewhat sober 15.5 %, compared to those radical days of ‘84 and ‘98!

But take a close look. There have been six distinct up and down interest rate cycles over the last 30 years - and for us South Africans, this current cycle is numerically, the least volatile and one of the shortest!

Over the period in question, the Prime Rate has never been under 10 % in South Africa! So what would make us think that it might now dive under that level to single digits? - maybe even replicating the UK, with its current half-a-percent nonsense?

Some commentators might say that we’re in the worst financial crisis since the Great Depression and all previous benchmarks are therefore up for obsolescence but bear in mind that, over the last 30 odd years, this country has been through 1) an all-but Civil War 2) two “we’re all doomed now” reactions to successors to President Mandela and 3) two other financial meltdowns; the first christened Black Monday in 1987 and of course, the later financial maelstrom of 1997/’98, blamed primarily on the over-heating of the Russian and Asian markets - yet still never below 10 %!

So, will we see Prime at much below 10.0 % therefore, as a result of the so-called Credit Crisis? History and statistical analysis wouldn’t support such a theory, I wouldn’t have thought.

And then what about house prices? Let’s look at the real stats. The graph below reflects year-on-year price escalations in the Western Cape over the same 29 year period. Sure, we as real estate agents enjoyed the period 2002 to 2006 - who wouldn’t have, with an average of 20 % plus per annum increases? I guess it doesn’t really matter what the root cause of such price inflation was. When looking back, most of the experts said it was all part of a … “global market adjustment” - they may well be right.

But let’s reflect on the averages over that entire tumultuous period. Good old property has kept on producing a + 15 % year-on-year escalation. Hooray for Property!

So, where to from here? … 2010 and the hosting of the World Cup in South Africa has become a sort of starting gun for recovery. Almost all the people involved in real estate will tell you that the recovery will be starting before the back end of this 2009 year. But make no mistake, it’s happening now! In my business as a real estate broker, I try to conduct at least 3 to 4 Sunday afternoon Show Days a week. As recently as 8 weeks ago, from my Show Days, I was averaging about 1 to 1 ½ visitors per property.

Two weeks ago, I had 27 sets of visitors through 3 Show Days, so the man/woman-in-the-street is definitely getting off the fence and back into the marketplace! And these were genuine buyers for places to live in, in the R 750 000 to R 1.5 m price band - not cash-rich investors.

So, just a layman’s perspective, from someone who makes their living out of property.

I’d more than welcome your comments or feedback; either by email on dave@remaxpa.co.za; via cell on 082 449 3100; or via my Blog - From Dave’s Desk - on http://fromdavesdesk.blogspot.com/

Cheers for now,

Dave J

Positive Property Outlook for Blouberg …

2009-06-01T21:45:00.000-07:00

All the experts are saying the national outlook on house prices is pretty bleak; with an average decline of as much 10 % or more, year-on year. However, Blouberg home-owners have something to smile about, according to the comprehensive analysis I’ve undertaken in my role as a Property Broker with RE/MAX Property Associates in Table View, Cape Town.

I would think that Blouberg home-owners would be pleasantly surprised to hear that by comparison, in our area, year-on-year prices have dropped by just - 4.2 % for houses; and only - 0.7 % for sectional title property.

In fact, three suburbs in the area are reflecting positive house price growth over the period namely, Big Bay, Sunningdale and West Beach. The reasons for this are pretty straightforward; these three suburbs offer a variety of house sizes and styles, catering for a broad band of buyers, with an equally wide price range to choose from.

Sunningdale in particular has performed exceptionally well within the current market and I think this can be explained by the nature of the suburb, in that there are few, if any, apartments within its boundaries and the vast majority of the houses are located in well designed, quiet and safe roads and avenues off the main traffic thoroughfares, close to lots of green belt land with parks and walk-ways - it's a very attractive proposition for today's buyer!"

Not all the news from the analysis is as positive however. In terms of the number of sales taking place in the area, this is down by a factor of - 53 % versus the previous 12 month period; and it's taking 60 % longer to sell the average property these days - roughly 100 days, compared to only 60 a year ago!

My advice to home-owners? - If you don't have to sell now - don't! - but if you have the resources - and property is of interest to you as an investment opportunity, then now is definitely the time to buy, with bargains such as a two bedroom, two bathroom Freehold property with a lovely garden, available for as little as R 495 000; and with an existing tenant in place, paying R 4 000 a month - that's exceptional value for money!

I’m more than happy to share his analysis with anyone who'd like a copy of either just the summary; or of the detailed spreadsheets for each suburb within Blouberg. I can be contacted on dave@remaxpa.co.za or on 00 27 (0)82 449 3100 - or the individual spreadsheets are available as downloads off this Blog.

If you feel like commenting on these findings, I’d welcome hearing back from you.

Cheers for now,

Dave J

Property for Sale: 20 Alicante

2009-06-01T21:30:00.001-07:00

CHARMING AND CAPTIVATING! ...

Asking Price: R1.050 million

This is a delightful face-brick home in a quiet leafy lane, in the heart of the Table View "Winelands" area.
It boasts a lovely garden that's ideal for entertaining and there's plenty of room for a pool.
Internally very nicely set out with the kids on one side - and Mum and Dad on the other!
Tons of space all around the property for any extension you might have in mind and priced to sell as a exceptional all round family-home package!
House size = 146 Erf Size = 549
3 Bedrooms, 2 Bathrooms, 2 Reception Rooms, 2 Garages
Monthly Rates = R260

Settle in to this cosy family nest - call Dave at 082 449 3100 or email dave@remaxpa.co.za

Property for Sale: 16 Alicante

2009-06-01T21:18:00.000-07:00

COME AND FALL IN LOVE!...
Asking Price: R1.095 million

The owner doesn't really want to sell her dream house but she's had to relocate. With a heavy heart, she's resigned to letting someone else fall in love with; and take over, her pride and joy for so many years, with it's vast garden and welcoming entertainment area, of which, her joyfull momeries will forever live in.
This property is a true ... move on straight on in! - proposition!
Recently painted inside and out, there's nothing to be done but to enjoy!
Especially the large garden, where her beloved dogs used to play and bound to their hearts' delight!
For those with a love of gardening, the grounds are exceptionally well established and blessed with a large number of beautiful trees, some of which are apparently, very rare!
House Size = 153 Erf Size = 553
3 Bedrooms, 2 Bathrooms, 2 Reception Rooms, 2 Garages
Monthly Rates = R291

Create your own special memories in this lovely home - call Dave at 082 449 3100 or email dave@remaxpa.co.za

Property for Sale: B401 The Bay

2009-05-30T21:45:00.000-07:00

NICE LITTLE EARNER!
Asking Price: R1.395 million

This unit is located on the fifth storey of The Bay; probably the best run, maintained and secure apartment complex on the Blouberg Beachfront.
Fully furnished and ideally set up for letting as holiday accommodation, the apartment consists of two sea facing rooms; the main bedroom with an en-suite bathroom.
Both bedrooms have sliding doors leading onto the balcony that’s well big enough to sit outside on - and watch the sun go down across the ocean whilst sipping the tipple of your choice!
And the Mountain and channel ocean views will remain even after (if?) the proposed Hotel is built nearby - but this unit has been priced accordingly, acknowledging this status and the price includes all the furniture and appliances etc.
There’s a family bathroom a large lounge/dining/living are with well equipped open-plan kitchen.
The unit comes complete with its own underground, auto-door, lock up garage.
And the complex itself offers its residents a delightful swimming pool and entertainment area and there’s a fully equipped laundry as well.
Apartment Size = 82
2 Bedrooms, 2 Bathrooms, 1 Reception Room, Swimming Pool, 1 Garage
Monthly Levy = R961

Looking for an investment or an exclusive holiday pad? - Call Dave at 082 449 3100 or email dave@remaxpa.co.za

Property for Sale: 103 Pentz Drive

2009-05-30T21:06:00.000-07:00

PLEASE TAKE ME OUT OF THE 70’s!!!
Asking Price: R1.395 million

Sure it’s a cliché; but the best advice in buying property is to always buy the BEST possible house you can afford - in the very BEST Suburb or Road - and invest in doing it up!
Well, this house is indeed a moderniser’s dream. Big house, vast plot and located in Pentz Drive, THE Road in Flamingo Vlei. All it’ll now take is for you to apply your decorating expertise to this lovely home and she’ll be the envy of the Street!
This family home boasts three bedrooms and two bathroom; separate lounge and dining room areas.
Big study from which the current owner works from home.
Big, big garden with a large and inviting pool; completed with a larger-than-usual tandem garage and workshop.
She’s very well priced accordingly - so now come see past the orange tiles and start mixing that paint - she’s going to be gorgeous! - and could be yours!
House size = 226 Erf Size = 845
3 Bedrooms, 3 Bathrooms, 2 Reception Rooms, 1 Study, Swimming Pool, 2 Garages

Scoop up this renovator's dream - call Dave at 082 449 3100 or email dave@remaxpa.co.za

Property for Sale: C12 Seaside Village

2009-05-30T20:49:00.001-07:00

IMMACULATE - EXQUISITE - NEED I SAY MORE?

Asking Price: R1.595 million

One of the most exquisitely finished apartments along the entire Blouberg Beachfront!
This unit is located on the third storey of the bustling SeaSide Village shopping and residential complex in Big Bay; where the lucky residents can avail themselves of all manner of delightful eateries - along with all the conventional shops for every day needs that you could ever want!
The apartment is big - 109 sq m big with two delightful bedrooms and two immaculately modern bathrooms; one being en-suite.
Large lounge/dining/living area with sliding doors leading onto a balcony for sundowners whilst enjoying gorgeous channel sea views across the ocean.
Jamie Oliver himself would salivate at the modernity of the kitchen; so beautifully finished and comprehensively equipped!
This unit comes with two side-by-side under-cover parking bays and of course, access to the garages and the apartments themselves is as secure as secure can be. Multiple lifts lead either directly to the parking area or to the two levels of retail shops, coffee houses and restaurants.
Simply stunning apartment - just waiting for your offer!
Apartment Size =109
2 Bedrooms, 2 Bathrooms, 1 Reception Room, 2 Parking Bays
Monthly Levy = R1480

Don't miss this rare opportunity - call Dave at 082 449 3100 or email dave@remaxpa.co.za

Property for Sale: 40 Winkle Way

2009-05-30T04:50:00.000-07:00

ONE OF THE LAST VACANT PLOTS LEFT IN SUNSET BEACH! ...

Asking Price: R2.25 million

Located in Winkle Way, one the THE roads in this prestigious suburb. Come and build the house of your dreams rubbing shoulders with the well-to-dos of this delightful community, just a stone's throw from the beach.
Erf Size = 704

There's no time to waste - call Dave at 082 4493100 or email dave@remaxpa.co.za

Property for Sale: 1 Tradewinds

2009-05-30T04:26:00.000-07:00

A TRUE GEM IN THE ATLANTIC BEACH GOLF ESTATE!
Asking Price: R3.3 million

The very up-market location of The Atlantic Beach Golf Estate offers wide open natural surroundings in a country feel setting.
The Estate is close to shopping centres, schools, churches and 10 minute stroll to the secluded beach
North facing stand with lovely country/bush feel
Front entrance flows from the fully enclosed, gated front garden into a reception area and then a very spacious living area consisting of a carpeted lounge with fireplace and double volume ceiling as well as kitchen and second lounge
The open plan kitchen is tiled and fitted with cherry wood built-in cupboards, oven and hob, extractor fan, serving counter and external entrance and plumbed for dishwasher
A tiled second lounge is two steps down and flows to the tiled dining room through three French doors
The dining room has a built-in braai and foldaway doors opening onto the paved patio and pool area
Lovely smooth flowing living areas
The main bedroom is carpeted with ample built-in closets and a separate bathroom with double shower, basin and loo. Main bedroom has French door leading to pool patio
An adjacent carpeted bedroom has built-in closets
From the reception area flows another sunny carpeted bedroom with built-in cupboards and French door outside and a tiled en-suite with bath, basin and loo
A staircase leads to a first floor bedroom with beautiful views
Upstairs bathroom has shower, basin and loo
Double automated garage has tiled floor and ample built-in cupboards as well as hidden plumbing for washing machine and tumble drier behind closet doors
Sparkling chlorinated solar heated child safe pool in established automatically irrigated garden
Fully walled garden
Natural open spaces and golf course across the road for country feeling
Travertine tiles in living areas and bathrooms
24 Hour security personnel-patrolled estate, very safe area
Fully secure enclosed estate with manned access control at entrance gates and biometrically controlled booms
House Size = 300, Erf Size = 803
4 Bedrooms, 3 Bathrooms, 3 Reception Rooms, 1 Study, 2 Garages
Monthly Rates = R1731

Don't Delay - call Dave at 082 449 3100 or email dave@remaxpa.co.za

Welcome to Dave's Desk

2009-05-11T00:39:00.000-07:00

I originally qualified as an engineer, obtaining a Masters degree from King’s College, London, in Internal Combustion Engineering, specialising in turbo-charger design (very useful!). I emigrated from the UK to South Africa in 1982 and spent the next 15 years in Durban, working firstly for Unilever, in various marketing roles and then moved into advertising; establishing my own agency in 1988, which was subsequently bought out by Saatchi & Saatchi. I finished my career with Saatchi’s based in Cape Town, as their Group Marketing Director for South Africa and the rest of the Continent. Frustrated with the demands of corporate life and weekly commuting to Johannesburg, I started looking for a complete change of direction and entered the property industry. In the few short years that I have been involved in property and now with RE/MAX Property Associates specifically, I believe I have been able to apply much of what I learned in corporate life to my new-found and much-loved role of being a Property Broker - helping my clients to either find the house or apartment of their dreams - or to make them significant amounts of money from speculating in real estate!

I focus on residential property in Blouberg, the place where all the “classic” pictures of Table Mountain are taken!

Finally, I regard myself as being truly blessed to live and work in the Blouberg area, where I am married to Anne, who is an exceptionally talented designer in the machine embroidery business and in 2004, we became the very proud parents of our Twin sons, Robert and Matthew. Their first Birthday was in the same year that their Dad turned 50, so as a very later starter - and with some not-inconsiderable expenses coming my way for the foreseeable future, I expect to be - and look forward to - brokering deals in property for many, many years to come!