SNIPPETS
Sales in Cape soar, thanks to semigrants, Europeans
property across the Cape continues at pace, and while it might slow down, that would be due to buyers being hamstrung by an inability to sell their houses elsewhere in the country. In fact, he says, we could see semigration picking up further because of the deterioration of service delivery in many municipalities.
HOW TO BEGIN SAVING FOR A DEPOSIT
ANEW generation of would-be homebuyers is emerging in the form of Gen Zs. While the oldest Gen Z is now 26, research shows that this generation places great emphasis on the importance of homeownership.
However, Rhys Dyer, the CEO of ooba Home Loans says the barriers to entry remain a key challenge that needs to be addressed.
South African Gen Zs are greatly impacted by rising interest rates, low levels of affordability and economic volatility, affecting their ability to afford the upfront costs and monthly repayments on a home relative to alternatives.
How do you begin saving for a deposit or for other upfront costs?
Providing some financial literacy, Dyer shares his top tips:
Set a specific savings goal. This will give you a clear objective to work towards and help you remain focused on your savings plan.
Open a separate interest-bearing account for your savings. This way, the money is safely stowed away and cannot be reached unless notice is placed
on the account.
Draw up a monthly budget. Determine what you need to spend versus what you can save. Make sure that you move your savings into your fixed account as your salary comes in, in order to avoid dipping into the funds.
Automate your savings. Set up an automatic transfer from your checking account to a separate savings account dedicated to your deposit. By automating your savings, you’ll ensure that a portion of your income is consistently allocated towards your goal.
Track your spend. Diligently track your projected spend against your actual spend. Root out the hidden, impulsive items that creep into your budget, for instance, takeaways on the weekend or lattes on the way to work. In a tough economy, small savings can make a big difference.
Prioritise your debts. Give yourself the best chance to succeed by allocating enough money each month to pay off your debts. Check the interest rates that your debts accumulate each month – this will help you see how much extra you are paying in interest alone.
4 steps
TO GET YOUR HOME SHOW-HOUSE READY
PROPERTY market conditions in South Africa are leaning in favour of buyers, with supply significantly exceeding demand in many areas. Spoilt for choice – and often lacking a sense of urgency or competition – buyers are taking their time to look around and negotiating harder than usual on sales prices.
Conditions like these can make it difficult for sellers to attract the right kind of buyer attention, says David Jacobs, the regional sales manager for the Rawson Property Group.
To overcome the challenge, he urges sellers not to overlook valuable marketing opportunities, particularly when it comes to the most traditional sales technique of all: show houses.
While show houses are typically arranged and managed by agents, they’re not exactly effort-free for sellers, he says, adding that a little preparation is almost always necessary.
“A well-staged home, expertly shown to a select pool of qualified buyers, shouldn’t need to be opened to visitors more than a few times, even in a buyers’ market,” he says.
To improve your odds, he suggests doing the following prep work, alongside any specific recommendations from your real estate agent: Deep clean: There’s nothing quite like a layer of grime to put a buyer off. Put some elbow grease into getting your property squeaky clean and shining, including windows, carpets and curtains.
Declutter: Make your home feel more spacious by clearing out as much clutter as possible. Pop those doodads and knick-knacks in storage, clear your counters and garage corners, and unstuff any closets that appear overly full. (Storage space is a big selling point, so make yours look as large as possible.)
Depersonalise: Our homes are normally safe spaces to express our personalities and our views on religion, family, politics and more. When showing your home, however, it’s best to present as neutral a picture as possible, removing items of a personal or controversial nature to make it easier for buyers to imagine their own lives in your space.
Leave it to the pros: Most buyers feel awkward exploring a space and asking difficult (but necessary) questions about a property under the watchful eyes of its owners. It’s far better to take the family, including any furkids, out for the day, and let your agent do their best work with complete focus.
AFEW THINGS are boosting sales in the Cape: semigration, an uptick of foreign buyers and the upsurge of Cape Town as a tech hub.
Samuel Seeff, the chairperson of the Seeff Property Group, says the demand from semigration buyers for
Future trends of secure estates
IN RECENT years, lifestyle residential estates have emerged as sought-after havens for homebuyers worldwide and, like all real estate sectors, trends continue to evolve, especially at the top end of the market where buyer needs and expectations are high.
David Burger and Stephan Thomas, the Secure Estate specialist team for Lew Geffen Sotheby’s International Realty in Cape Town’s southern suburbs, say we can anticipate the following trends:
On-demand services and concierge: We may see the integration of advanced AI-powered concierge services, virtual assistants and personalised lifestyle management platforms that cater to individual preferences and needs.
Leisure and entertainment experiences: We can expect the integration of immersive technologies, virtual reality experiences and curated cultural events that offer unparalleled entertainment within the estate.
Smart homes and integrated technologies: The fast-approaching digital future will witness more advanced technologies, such as voice-controlled interfaces, artificial intelligence, and virtual reality, offering residents a seamless and personalised living experience.
Sustainability and green living: As environmental awareness grows, so does the emphasis on sustainability within lifestyle residential estates.
Seeff adds that the Cape metro is increasingly also going to be seen as a new hub for head offices, and services including technology, with Amazon, for instance, moving in.
Ross Levin, the licensee for Seeff Atlantic Seaboard and City Bowl, says that for example, there is a strong influx of semigration buyers to the
coastal suburbs.
While the buyers were traditionally from the Gauteng and inland areas, they are also coming from the KZN region.
International buyers have also invested heavily in property during the first few months of the year, says Levin.
This includes Russian and European buyers (especially from Germany, the UK and Netherlands) who are looking for alternative markets to invest in while the Russian-Ukraine war continues.
It is not just sales The rental market is also exceptionally strong in Cape Town, boosted by inward demand, says Seeff.
We will see a greater emphasis on eco-conscious designs, carbon-neutral initiatives and a focus on harmonising with nature.
Wellness and health-oriented
amenities:
We will probably see the integration of advanced health technologies, personalised wellness programmes, and access to specialised health-care services within the estate.
Co-living spaces and community
collaboration: A growing trend in lifestyle estates is the incorporation of co-living spaces
and collaborative communities. The future will witness the evolution of these communities, with increased emphasis on shared experiences, co-creation of amenities, and platforms that foster collaboration and social engagement.
Integrated WFH facilities:
We’re seeing the integration of dedicated co-working spaces, highspeed internet connectivity, video conferencing facilities, and flexible office solutions within the estate, which help create an ideal work-life balance for residents, combining productivity and convenience
Pay a one-off extra R15
THE BIGGEST debt people carry, and for the longest periods of their lives, is their home loan, and meeting the repayment each month can be stressful.
Carrying the pressure for 20 years may well be something most homeowners need to endure, but if you can pay off your home loan quicker, you should try by all means to do so.
There are many ways to do this and, granted, they might not all be achievable. However, if you can take off even a few months of your repayments, it would make a big difference.
FINANCIAL CALCULATIONS:
PAYING EXTRA EACH MONTH
If you had a home loan of R1.5 million, repayable over a 20-year term:
✦ Your monthly payment would be R16 256.
✦ Your total repayment at the current interest rate would be R3.9m.
If you took the same home loan value over 10 years:
✦ Your monthly repayment would be R21 304.
✦ Your total repayment would be R2.55m.
This means that by paying about R5 000 more a month, you would save just under R1.4m on your home – and have 120 months of not paying a bond.
Obviously though, not everyone can afford to pay this much more every month, but it does not mean that any extra amount you can pay into your
bond will not make a huge difference overall.
If you paid an extra R4 000 each month (R20 256):
✦ You would pay off your home in just over 11 years.
✦ Your total home loan would be R2.68m.
✦ You would save R1.2m.
If you paid an extra R3 000 each month (R19 256):
✦ You would pay off your home in 12.3 years.
✦ Your total home loan would be R2.84m.
✦ You would save R1.05m.
If you paid an extra R2 000 each month (R18 256):
✦ You would pay off your home loan in just under 14 years.
✦ Your total home loan would be R3.05m.
✦ You would save R843 000.
If you paid an extra R1 000 each month (R17 256):
✦ You would pay off your home loan in 16.29 years.
✦ Your total home loan would be R3.37m
✦ You would save R528 000.
If you paid an extra R500 each month (R16 756):
✦ You would pay off your home loan in 16.75 years.
✦ Your total home loan would be R3.59m.
✦ You would save R304 000.
If, however, you could not commit to making regular extra payments, you could still bring down your home loan repayment
term and save money by injecting your bond with one-off payments.
If you made a one-off extra payment of R20 000:
✦ You would pay off your home loan in just under 19 years.
✦ Your total home loan would be R3.7m.
✦ You would save R177 000.
If you made a one-off extra payment of R15 000:
✦ You would pay off your home loan in 19.23 years.
✦ Your total home loan would be R3.75m.
✦ You would save R135 000.
If you made a one-off extra payment of R10 000:
✦ You would pay off your home loan in 19.48 years.
✦ Your total home loan would be R3.8m.
✦ You would save R91 300.
As part of your strategy to pay off your home loan quicker in the current economic climate, Richard Gray, the chief executive of Harcourts South Africa, says it is important that you review your budget and make adjustments for the higher interest rates.
“If necessary, adjustments should be made to prioritise paying off the home loan faster and reducing the amount of interest paid over the life of the loan.”
He also suggests homeowners consider refinancing their home loans to shorter terms or lower interest rates.
“Refinancing your home loan can be a smart move if it helps you
save money on interest and pay off your bond faster. It’s important to consult a reputable lender and weigh the pros and cons before making any decisions.”
Gray advises homeowners to make extra payments towards the principal debt whenever possible, such as using a bonus or tax refund to make an additional payment.
“Even making small additional payments on a regular basis can have a significant impact over time.”
Rhys Dyer, the chief executive of ooba Home Loans, says that because a home loan is such a large, long-term financial commitment, it can be “surprisingly easy” to pay it off at least a little early.
“You might get out a year’s worth of payments (or more) simply by throwing a bit extra towards your bond each month.”
He provides a handful of clever tricks to consider implementing, some of which might even allow you to pay off your bond 10 years earlier. Others will shave off a few months or years.
“Either way, any of these options could save you money in the end and help you reach financial freedom faster. If your budget allows, consider using a combination of these approaches to really hit that debt hard.”
1. Find extra cash: Cash in your emergency savings accounts and deposit the funds into your bond account. This would also give you tax benefits.
Another way of raising extra cash to reduce your bond account is to sell unused furniture/ appliances, such as that old tumble dryer or television set gathering dust in the garage. You could even rent out unused space on your property and deposit the rental income into your bond.
2. Pay extra into your bond
Consistently adding just R1 000 to your monthly bond payment could make a big difference, Dyer says.
“The biggest problem with this approach, though, is that it requires willpower. To reap the benefits, you have to voluntarily put an extra R1 000 towards your bond payment every month.”
3. Apply salary raises to your bond One way to find extra cash to put toward your home loan is to deposit money you get from salary increases and bonuses. The goal is to put the same percentage of your income toward your bond, even when your pay goes up.
“In other words, if you’re currently putting 15% of your income towards your bond payment, 15% of each annual raise amount should also go towards your bond, in addition to what you’re already paying. If you’re leading a comfortable lifestyle and can avoid lifestyle inflation that often follows a raise, you could put your entire raise amount towards your bond balance.”
The strategy works best for those who get regular raises above minor cost-of-living adjustments, he says.
“But, if you aren’t expecting to see your income increase anytime soon, this strategy might not be the best option to start with.”
4. Use cash windfalls to pay lump sums Instead of paying a little extra each month, you could pay a large lump sum here and there. This could be done with a cash windfall, such as from an annual tax refund, 13th cheque or bonus, or inheritance.
“If you put R30 000 towards your home loan when you get your tax refund, all of your payments from there on out are a little more effective, because less of them are going towards interest.”
Every cent counts: there are ways to knock that debt quicker and benefit financially and mentally in the long run BY BONNY FOURIE bronwyn.fourie@inl.co.za
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16 RESIDENTIAL PROPERTIES ON AUCTION - 28 JULY 2023
EXQUISITE 3 BEDROOM APARTMENT
Hazeldene Road, Sea View, Durban
Extent: ± 3 876 m² | 4 x 2 bedroom, 2 bath units | Large fully fitted kitchen | Main bedroom ensuite | Open plan lounge & dining area | Opportunity to develop a further 6 units | Approved building plans are available | Opportunity to purchase neighbouring property at 27 Hazeldene Road
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APARTMENT IN UMGENI PARK
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5 BEDROOM HOUSE IN WESTVILLE
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3 BEDROOM HOME IN COMPLEX Section 16 SS Glen Garry, 8 Churchill Avenue, La Lucia
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UNIQUE AND LUCRATIVE DEVELOPMENT
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2 BEDROOM APARTMENT IN THE PEARLS Section 216 SS The Pearls of Umhlanga, 6 Lagoon Drive, Umhlanga
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AGENTS’ DIRECTORY
DOGON GROUP PROPERTIES
Atlantic Seaboard Office 021 433 2580
thekings@dogongroup.com
www.dogongroup.com
RHONDA RAAD PROPERTIES
Cape Town Office 082 448 7795
Email: rrpsales@mweb.co.za
www.rhondaraadproperties.co.za
ASKA PROPERTY GROUP
Sandown, Milnerton Estates
Office 071 604 8493
Email: corlia@aska.co.za
www.askaproperty.co.za
DOGON GROUP RENTALS
Sea Point Office 021 433 2580
enquiries@dogongroup.com
www.dogongroup.com
DE PLATTEKLOOF
Cape Town 060 960 0100
Email: live@deplattekloof.co.za
www.deplattekloof.co.za
IRENE PORTER PROPERTIES
Simon’s Town Office 021 786 3947
Debbie 073 140 2543
www.ireneporterproperties.co.za
DOGON GROUP PROPERTIES
Southern Suburbs, Claremont Office 021 671 0258
southernsuburbs@dogongroup.com
www.dogongroup.com
PETER MASKELL AUCTIONEERS
KZN
Office: 033 397 1190
Email: info@maskell.co.za
www.bidlive.maskell.co.za
MURAMBI HOUSE
Wynberg Office
murambihouse@telkomsa.net
www.murambi.co.za
DOGON GROUP PROPERTIES
Western Seaboard
Office: 021 556 5600 or 021 433 2580
enquiries@dogongroup.com
www.dogongroup.com
VAN’S AUCTIONEERS
Gauteng Office 086 111 8267
www.vansauctions.co.za
www.iolproperty.co.za