This is a great message to remember at Easter.

I like these 2 quotes:

The key is to be a student not a follower. Live your life as the product of your own conclusion.

You will never know joy until you experience the joy of success of someone you helped in the past.

Helping others

The Property Clock

The property clock is often used to follow the property cycle, which circulates over a seven to ten year period, and is based on the relationship between interest rates, supply and demand, affordability/finance availability, and the cost of renting.  

It is seen as a useful tool by the experienced investors to aid them in determining the best time to strategically enter and exit the property market.

 

A property Boom, indicative of peak prices, is shown at the top of the clock at 12 o'clock, while a property Bust, is indicative of when property is at its lowest price, at 6 o'clock. The best time to invest in property, just after 6 o'clock, is during a rising market where it can dramatically lower the risk of investment.

An important point to remember is that the "time span" between a boom and bust market is on average three to four years, but due to the deep recession the world has gone through after the Sub-Prime Crises the time span between our bust and boom looks like it will last seven to eight years.

I do believe we are now safely in the Recovery Phase and at around 10 o’clock on the property clock which makes it the ideal time to invest in property before the sharp increase in prices start.

Characteristics of Recovery (9 o'clock to 12 o'clock)

Who sells and why?

* Rental property owners - Landlords getting dividends

* Investors - miscalculating market peak

Who buys and why?

* Experienced investors - Still predicting rising prices

* General public - Increasing credit availability

* Tenants - Afraid price increases will make later purchases impossible

What moves the clock?

* Employment increases 

* Market stabilizes 
* Increased disposable income
* Improving personal debt to income ratio
* Property becomes an attractive investment
* House prices still low
* Increasing construction 
* Increasing demand for property 
* Renewed business confidence 
* Interest rates and inflation declining 

The situation in the South African Economy:

   Currently Negative;

   Currently Positive;                
   Currently Neutral;                  
 

Budget 2015 effect on Transfer duty when buying a property

We had very good news on Budget day when the finance minister announced that they will be increasing the transfer duty threshold from R600,000 to R750,000.

The implication of this on real estate transactions in 2015/2016 will be that people buying homes for less than R750,000 will be saving from around R300 to R4,500 in transfer duty depending on the price of the property purchased. (See table below)

 

For those people buying property costing more than R750,000 but less than R2.25 million there is also a reduction in the transfer duty. Unfortunately people buying for more than R2.25 million will be paying more transfer duty. (See table below)

It is important to keep in mind that all property purchases are subject to transfer costs which is the sum of the deeds office charges and the conveyancing fees. There is a common misconception that registration of properties under the transfer duty threshold is free. 

Lastly it is also important to remember that the home loan divisions in the banks are not allowed to include the transfer costs in the bond grant and so all buyers must have access to enough funds to pay the transfer costs before buying a new home.

Transfer Duty 2015/16
Value of property	Transfer duty calculation
R0 – R 750,000	0%
R750,001 – R1,250,000	3% on value above R750,000
R1,250,001 – R1,750,000	R15,000 plus 6% on value above R1,250,000
R1,750,001 – R2,250,000	R45,000 plus 8% on the value above R1,750,000
R2,250,001 +	R85,000 + 11% on the value above R2,250,000

Table supplied by Leeuwner Maritz Attorneys

Please contact me on 082 785 3305 or caroline@remax2000.co.za if you need more information or help regarding buying or selling your home.