Issue 4  -  November 2007

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  Another Interest rate hike before the year's out?
 


The Reserve Bank Governor Tito Mboweni announced a 50 basis point increase in the repo rate to 10.5 percent on Thursday, 11 October and Banks did not hesitate to follow suit by raising the prime interest rates to 14%. This amounts to a 350 basis point increase in interest rates since June last year which has caused the average monthly repayment on a home loan to rise by 24,6%.  Some experts are predicting another interest rate hike before the end of the year to cool down consumers spending even further over the Festive season.

 Due to higher than expected inflation figures there is every possibility that interest rates may increase again before year end says John Smyth CEO Multinet Mortgages.

This increase  will effect all players in the  Property and allied Industries

:Homeowners will find it increasingly difficult to meet bond repayments and repossessions are expected to increase.

Buyers affordability will become even more of a problem especially for the lower end of the market - 30 year bonds are becoming more and more common.

Estate Agents will have more houses on their  books but will find that Bond Debt in certain cases will be higher than the proposed selling price and will need to counsel sellers in this predicament constructively.

Bond Originators will also feel the effect as new home loan applications have reduced considerably since the introduction of the NCA and are expected to reduce even further.

The Origination and Real Estate industries have seen a wave of new entrants since 2005 and a lot these new players will find it increasingly difficult to stay afloat.

Consolidation of both these industries is inevitable and may ultimately prove to be a good thing.

Smyth concludes by stating that it is going to be "Survival not only of the fittest but also of the Leanest."
 

Market activity at its lowest, comments FNB
 


Although activity in the residential property market has increased marginally in 3Q07, for the first time in 2007, the level of activity is still at its lowest (excluding immediate post NCA measure). Possible reasons for this
marginal increase may include seasonality and settling of the market post the implementation of the NCA. Furthermore, six consecutive rate increases between 3Q06 and 3Q07 have hampered market activity further.

The proportion of first time buyers has decreased to 14%, not an unexpected result following interest rate hikes and the implementation of the NCA in the last year.

The 11th edition of the FNB Residential Property Barometer includes an annual insight into the Gauteng township market. The township property market has experienced a marked decrease in activity levels. The number of properties sold at less than the asking price has increased significantly from 8% to 21%.

This indicates that sellers may have been asking unrealistic prices and are now having to adjust their price pectations. This trend, previously noticed in the ‘traditional suburbs’, seems to be filtering through to the township market.
Property professionals also claim that there is an increasing trend in the ratio of sellers to buyers, indicating that the market is becoming more of a buyers market.

Only approximately three in five property professionals operating in the townships have a positive outlook for the next quarter. Affordability issues (NCA) and rising interest rates continue to challenge this market. Interestingly single female buyers continue to be strong purchasers accounting for approximately 1 in 2 property sales (single male buyers lag behind at 17%). Research into the township property market illustrate that the following trends are emerging:
properties in the townships are becoming more desirable due to affordability and upgrading of the social infrastructure and more township property owners are realising the value of investing in property and are renovating to increase their return on investment.
  Get your tax house in order before buying or selling property
 


If you are planning to buy a property, make sure your tax affairs are in order - and make sure you have an exit route from the deal if any other party is not up to date with his taxes.

Central to the issue, says Gerhard Kotzé, CEO of the ERA South Africa property group, is the South African system where there is almost always a “chain” of buyers and sellers in a given property transaction.

“We are all familiar with ‘subject to’ clauses in an Offer to Purchase and by far the minority of property deals in South Africa are unencumbered, that is cash deals.

“And as the saying goes, a chain is only as strong as its weakest link. You have to protect yourself as far as possible should one of those links fail.”

Kotze says it is well known that SARS has been tightening up on delinquent tax payers. Hence the large increases in what the Receiver delicately likes to call “collections”.

“And SARS is reportedly keeping a special eye on property transactions as a means of identifying tax cheats. Obviously if someone buys a home at a price that is out of kilter with his declared earnings, it sounds a warning bell with SARS, which has access to Deeds Office information before transfer is registered.

“If a potential problem is identified, the transaction could be stopped until the case is investigated. That would take time and could mean that the other participants in a property deal have their plans totally thrown out of the window.”

The deal could simply fall through, but even more to the point, SARS could end up taking a long look at the tax affairs of all the participants, so the knock on effect on their private and business lives is potentially significant.

“The simple answer is to ensure your own tax affairs are in order so that the Receiver gives you a clean bill of health and, just as importantly, to ensure that your Offer to Purchase includes a clause which would allow you to cancel the deal without prejudice should one or more of the parties in the chain have a tax problem.”

article courtesy www.rodneyhayter.co.za
 

Checklist for tenants
 

Before signing a lease agreement there are certain important and sometimes forgotten items that should be taken into careful consideration:

• Are there any additional charges over and above the rental amount for water and electricity?
• Who is responsible for payment of water and electricity, and what happens if the landlord/owner defaults on payment?
• Do you pay your rent to the agent, or directly to the landlord/owner?
• On what date is payment due and how is payment to be made?
• Did you thoroughly inspect the property with the agent or landlord to go over defects and faults?
• What maintenance and upkeep is your responsibility?
• Did you receive a copy of any applicable rules?
• Are there any levy or other costs relating to the Body Corporate or Home Owners Association?
• Is the DSTV subscription (if applicable) included in the rental agreement?
• Would you be able to install DSTV, if so required?
• Are pets allowed? Although you may not have pets yourself, if you spend a fair amount of time at home during the day you may not want to be irritated by yapping dogs.
• Do the security measures in place meet with your requirements?
• If remote access, did you receive a remote unit and what happens if this gets lost or you require an additional unit?
• For 24-hour access, is any motor vehicle identification sticker required?
• If there is a swimming pool (in the complex) is this fenced off and what regulations apply?
• Will your appliances fit into the spaces allocated?
• Is there sufficient access for your furniture? So many people rent a first or second floor apartment and then realise that they will not be able to move their furniture in.
• Is there sufficient parking space allocated and where will your guests park?
• Are you allowed to undertake any painting or interior decorating?

Ensure that everything is put in writing, and anything that is not specifically covered or mentioned in the lease should be written into a separate document, signed by both the landlord/owner or his agent

I.n addition, all documents should be read carefully and all queries satisfactorily addressed before the lease is signed. Once signed, a lease is legally binding and once you have signed it you must abide by every clause.

File away all documents for safe keeping.
  Companion planting in organic gardening
 
 
 


Let your flowers socialize!

The practice of companion planting is to create harmony in the garden. Plants which complement each other are placed together, while those that disagree are kept apart. Plants can complement or help each other in several ways.

Some plants grow well together, because they don’t compete with each other, while certain plants can bolster the growth of nearby plants by improving the nutrients or condition of the soil. Beneficial insects are attracted by some plants. Angelica, for example, attracts lady beetles and lacewings, both of which feed on aphids. By using these plants to attract beneficial insects, you also improve pollination or control insect pests for adjacent plants.

Plants can also repel pests or disease through the production and release of chemicals or odours. Chives, for example, repel aphids. If you plant them near your roses, therefore, they can bestow this protection on these blooms.

Consideration of these factors in planning your garden will help you to create a healthy, thriving garden. Your plants will enhance the growth of their neighbours instead of competing with them.

Many plants have natural substances that repel or attract insects depending on your needs. In some situations they can also help enhance the growth rate and flavour of plants situated in close proximity. Companion planting helps bring a balanced eco-system to your garden, allowing nature to do its job. By using companion planting, many gardeners find that they can discourage harmful pests without losing beneficial allies. There are many varieties of herbs and flowers that can be used for companion plants, which combines both beauty and purpose to give you an enjoyable, healthy garden.

Companion planting Guide

BASIL • Plant with tomatoes to improve growth and flavour. Repels flies and mosquitoes.

BAY LEAF • Place a fresh bay leaf in storage containers of beans or grains to deter weevils and moths.

BEANS • All beans enrich the soil with nitrogen. In general they are good company for carrots.

BORAGE • Plant with tomatoes and strawberries. One of the best bee-attracting plants. Also adds trace minerals to the soil and is a good addition to the compost heap. Borage may benefit any plant it is growing next to by increasing resistance to pests and disease.

CATNIP • Deters flea beetles, aphids, ants and weevils.

CHAMOMILE • The German variety improves the flavour of cabbages, cucumbers and onions. Accumulates calcium, potassium and sulphur, later returning them to the soil. German chamomile will reseed itself.

CHERVIL • Aids in repelling aphids from lettuce.

CHIVES • Improves growth and flavour of carrots and tomatoes.

COMFREY • Accumulates calcium, phosphorous and potassium. Likes a moist position in the garden.

CORIANDER • Repels aphids, spider mites and potato beetle. A good partner when planted with anise.

DILL • Improves growth of cabbage and lettuce, but do not plant near carrots or tomatoes. Also goes well with onions and cucumbers.

GARLIC • Plant close to roses to repel aphids. Builds up sulphur, which is a naturally occurring fungicide that will help in the garden with disease prevention.

HYSSOP • Companion plant for cabbage and grapes. Hyssop may be the number one preference for bees - some beekeepers rub the hive with it to encourage the bees to keep to their home.

LAVENDER • Everyone should have at least one lavender plant in their garden. Prolific flowering lavender nourishes many nectar feeding and beneficial insects. Use dried sprigs of lavender to repel moths.

LEMON BALM • Sprinkle throughout the garden in dried powder form to deter many bugs. Lemon balm has citronella compounds - crush and rub the leaves on your skin to keep mosquitoes away!

MARIGOLDS (Calendula) • Given a lot of credit as a pest deterrent and supposed to discourage many insects. Plant freely throughout the garden. The marigolds you choose must be of the scented variety.

MARJORAM (Sweet) • As a companion plant it improves the flavour of vegetables and herbs.

MINT • Deters white cabbage moths, ants, rodents, beetles, fleas, aphids and improves the health of cabbage and tomatoes. Earthworms are quite attracted to mint plantings. Be careful where you plant it as mint can be incredibly invasive.

NASTURTIUMS • Plant as a barrier around tomatoes, cabbage, cucumbers, and under fruit trees. Deters aphids, whiteflies and other pests.

PARSLEY • Plant among and sprinkle on tomatoes and asparagus. Parsley increases the fragrance of roses when planted around their base.

PEPPERMINT • Bees love it, aphids and other pests hate it.

PETUNIAS • Repel certain aphids and general garden pests. A good companion to tomatoes.

ROSEMARY • Great for planting around the garden. Use as a companion plant to cabbage, beans, carrots and sage.