1. THERE IS NO NEED FOR PANIC SELLING

However, the residential property market is sufficiently robust to deal with the changing dynamics and will continue to provide a reliable mechanism for the buying and selling of properties, albeit at lower volumes. Prices will adjust in line with supply and demand but fundamentally there are still valid reasons for residential homes to trade and there is certainly no need for panic selling, in fact quite the contrary.

A recent report by leading marketing insights company, Knowledge Factory, supports this position. This report reveals that the country’s property market is in good shape and that, while the ‘boom’ is tapering off in certain cities, it’s only growth rates, not actual property prices, that are dropping.

This report is based on property price growth rates for South Africa's major cities. Entitled Report on South African Metropolitan Areas: Property Price Growth - the report is based on data derived from the company's popular South African Property Transfer Guide (SAPTG). The report presents an overview of both historical trends and predicted property price growth rates for South Africa's major cities.

2. DEEDS DATA REVEALS PRICES AND PREDICTIONS

Like all of the SAPTG information, the report's figures are based on the latest Deeds Office data, in conjunction with other proprietary datasets developed by Knowledge Factory. The following major cities are covered - Bloemfontein, Cape Town, Durban, East London, Johannesburg, Port Elizabeth and Pretoria - and all free standing and sectional title properties (larger than 40m2) were examined, excluding properties categorised as smallholdings or farms.

“We also used median purchased prices, as opposed to averages, to make the data as accurate as possible,” explains Veronique Kotzé, Western Cape regional sales consultant for the SAPTG and the report's author, “because we're obviously dealing with very large areas and extremely diverse property types.

”As well as highlighting median prices for 2006, 2007 and 2008, together with the year-on-year growth rate achieved, the report also predicts expected growth for 2009 and 2010. “Although it should be noted that these forecasts do not take economic factors, such as the impact of interest rates, into consideration,” notes Kotzé. “They are simply based on previously achieved growth and the patterns revealed by those property sales.

3. REPORT ON SOUTH AFRICAN METROPOLITAN AREAS: PROPERTY PRICE GROWTH
Data extract by Gerrit Schutte / Report compiled by Veronique Kotzé - Knowledge Factory

Says Dr Andrew Golding, "Having in recent years enjoyed exceptional boom times with unprecedented growth in property values, it was inevitable that property price growth would slow. We are not in a recession and inherently the economy is still growing and the residential property market – particularly the middle class sector – is characterised by an under supply and over demand. "Regrettably, affordability is an issue in regard to some sellers. However, if you are not compelled to sell right now it is far better to sit it out for a while. We anticipate that the market is likely to experience the current conditions for the next 12-18 months before alleviating to some degree and then commencing into an upward cycle." says Dr Golding. If you are in the position where you are stretched beyond your repayment abilities, then here are several options available to you to avoid losing your home and all you have invested in it.
4. OPTIONS TO AVOID LOSING YOUR HOME ....4a. Repayment Options ....4b. Avoid Repossession ....4c. Consolidate Your Debt ....4d. Switch To A Lower Interest Rate The 4.5 % point increase in interest rates since June 2006 means that if you have a home loan of R1 million, you are paying R3 184 (or 32%) a month more since June 2006. If you run into difficulties with paying off your bond and the steps you can take to avoid having your home repossessed. ------------------------------------------------------------------------------------------------------- 4a. Mortgage Repayment Options The arrangements you can reach with your bank if you are unable to meet your monthly mortgage repayments include: • Undergoing a voluntary debt review with your bank's debt counsellor. The aim is to draw up a budget and trim your expenditure so that you can meet your monthly home loan repayments; • Paying off the arrears over a certain period of time. The arrear repayments are then added to your normal monthly repayments; • Restructuring your home loan over a longer period. Home loans are usually scheduled over 20 years, but banks are amenable to restructuring your home loan over periods of up to 30 years. Example: Although a longer repayment term will reduce your monthly repayments, you will end up paying more in interest over the long run. For example, if you take out a home loan of R1million at the prime interest rate of 15% over 20 years, your monthly instalment will be R13 168. At the end of the 20-year term, you will have paid your bank R3.1million. With an extension period If you extend the same loan to 30 years, your instalment will drop by R524 to R12 644 a month, but the interest you pay will increase and, in total, you will pay back the bank R4.6 million, which is R1.5million more than if you paid off your loan over 20 years. Reducing payments Reducing your payments for an agreed period, after which you must revert to paying the original monthly amount. However, because this will extend the period of time over which you will pay off your loan, you will end up paying more in interest. Suspending your payments Suspending your monthly payments for an agreed period in certain circumstances, such as if you are retrenched or if you have to take extended sick leave because you have a serious illness and/or are hospitalised. Payments may be suspended for a maximum of six months. Thereafter, you will have to resume your repayments as per your original loan agreement. Surrendering policies Surrendering collateral, such as a life insurance policy with an investment component, to the bank. If you are unable to meet your monthly bond repayments, the bank will cash in the policy and use the proceeds to cover your home loan repayments. Remember that you will lose part or all of your policy's value if you surrender it before it matures. Obtaining the bank's assistance to sell the property. ------------------------------------------------------------------------------------------------------- 4b. Avoid Repossession If you are unable to meet your obligations to your debtors or you fail to meet a monthly repayment on your mortgage, you should contact your bank as soon as possible. If you are certain you cannot meet your mortgage repayments, it is best to discuss the situation with your bank and arrange to sell your property on the open market in order to obtain the best possible price. If you are at least paying back the interest on your mortgage, the bank is likely to be more lenient regarding the time you are given to sell your home on the private market. ------------------------------------------------------------------------------------------------------- 4c. Consolidate Your Debt The best way to go about this is to consolidate all your debt into the home loan, which has a lower interest rate than all the other debts. Upon receipt of payout from the home loan, begin by settling the short-term debts, which have the highest interest rates, and then settle the rest. Not everyone qualifies for formal debt consolidation as the following qualifying criteria may apply - a certain minimum salary, a good credit record and a solid asset base. When considering debt consolidation, it is essential to check that the interest rate that will be charged is lower than the total on your individual accounts. ------------------------------------------------------------------------------------------------------- 4d. Switch To A Lower Interest Rate If you're interested in saving money, then switching a home loan is an option. By applying to switch a mortgage, you opt to transfer your home loan from your current bank to another. The new bank will cancel the outstanding amount on the home loan and take over the new loan amount. The advantage of switching a mortgage is that you may find another bank offers a better interest rate. A lower interest rate means a lower monthly instalment and one can eventually save thousands of Rands. There are certain criteria, which are required in order to qualify for a mortgage switch. These include being permanently employed, having a good credit history plus a valuation and assessment will be performed on your home. To switch mortgages, you have to have been with the original bank for at least six months. A 90-day notice period is also required. Switching does involve costs – all costs are usually included in the new home loan, but these costs may be paid separately. Sources: Pam Golding Press Office, the Knowledge Factory and Ooba - home finance experts

RESIDENTIAL LIFESTYLE PROPERTIES FOR SALE IN SOUTH AFRICA: The Properties For Sale in South Africa: Click through to the below areas to view some fabulous opportunities on offer. Gauteng: Click here Western Cape: Click here Boland & Overberg: Click here