Electricity shortfall looming

 

President Thabo Mbeki's advisory council on electricity has warned that if consumers don't further reduce power usage, there could be a shortfall in coming weeks.

Electricity shortfall looming

Petrol breaks through R10

 

The retail price of petrol will increase by between 75 to 81c a litre next week, says the DME.

Petrol breaks through R10

PE getting luxury development

PE getting luxury development
2008/06/27

Port Elizabeth and Perth, Australia, are joining forces and spending R300m to develop 45 luxury residential units.
The Jutland Point development is a partnership between Len Whittal, a native from the Eastern Cape, and Ian McDonald, a property developer from Perth, who together own 4Front Investment Holdings.
It will be 4Front's fourth development in Port Elizabeth, apart from its retail properties and office and storage developments in Deal Party, Groenbossies and Newton Park.
During the launch in Port Elizabeth, MacDonald said they are positive about the future of the metro and will be investing R500m in the city's property market over the next two years.
Investors will be paying between R4m and R20m for a unit in Jutland Point. The sizes of the units range from 110sq m to 346sq m.
Every unit will have a view of the harbour, city and Baakensvallei and have at least one private balcony.
The 13-storey building has two parking levels. Additional features include a diesel power generator, broadband internet access and CCTV cameras.
MacDonald says the development will be completed before the start of the 2010 Soccer World Cup.
The developers say Jutland Point will have some of the most luxurious units that Port Elizabeth has ever seen. This development will breathe new life into the historic CBD.
Jutland Manor on the premises, which used to be a famous restaurant and dates back to the 1920s, will be retained.
Jutland Point will be covering 30% of the premises, while the rest will be rehabilitated by planting indigenous plants, MacDonald said.
Asked why such a development was undertaken in Port Elizabeth, Macdonald said: "Why not?"
The city reminds him of Perth 10 to 20 years ago.
"Port Elizabeth is ready for investment and development. It will soon have two operating harbours and receive unmatched publicity during the Soccer World Cup in 2010. Several companies also export successfully from here, and there are nature reserves, beaches, as well as colourful people and cultures." – Riana de Lange, Sake24

PE getting luxury development

Jhb development launching 28/6

Jhb development launching 28/6
2008/06/27

A new African-Contemporary-style development will be launched on 28 June 2008 in the south of Johannesburg.
Stone Quarter will be located in Eye of Africa, a 677 hectare golf estate in Alewynspoort.
The masterplan for Eye of Africa offers potential homeowners the choice of either free hold stands where they can design and build their own homes or to purchase in a sectional title village designed to meet the estate's architectural guideline and standards.
Stone Quarter will host 230 two and three bedroom townhouses ranging between 144sq m to 204sq m.
The architectural style includes raw materials to ensure a design completed with features including stainless steel Miele ovens and hobs, granite kitchen tops, low voltage lighting, lock-up garages, private pools and water features offering.
Community life in Eye of Africa include a café, the village green, kids' club, running and cycling trails, landscaped parks and a community centre.
The development is within phase one of the Eye of Africa development with Stone Quarter prices ranging between 1,3m to 1,8m and is set for completion in 2009. Stone Quarter will be launched on 28 June.
For more information contact 011 469 1330 or click here to visit the website.

Jhb development launching 28/6

Is it time to fix mortgage rates?

Is it time to fix mortgage rates?
2008/06/27

After ten consecutive interest rate hikes, homeowners are finding it difficult to meet their repayments. Many are considering fixing their rates to hedge against future hikes. Bond Finance expert Ian Wason says one should consider all the options before going out and looking for a fixed mortgage rate.
According to Wason, homeowners have two options: hang on, or get out of the property market altogether. If you have cut your budget again and again and can't seem to make ends meet you should consider selling some assets, as one thing is for sure, your situation will get worse as interest rates, oil and food prices continue to rise.
"Debt consolidation, remortgaging and reducing other monthly expenses should be looked at before people decide to fix their rates," says Wason. "We are seeing a lot of opinions as to where interest rates are going at the moment. These are just opinions, as nobody really knows. We are seeing a lot of 'false horizons' as to where of the top of the interest rate cycle is, purely because we have no idea where oil and food prices will go, and this is now what is causing the inflationary pressure, not the demand side driven by easy credit. "
"It was the combination of negative equity and a stalling economy that sent the UK property market down 35% in the early nineties. I believe the problems in SA at the moment are on a similar scale," he says.
Homeowners must not forget that the chances are they could rent the same property for less than half of what they are paying in mortgage repayments on a 100% mortgage.
Don't follow the trend if you can counter the knock
"While rates are rising at a speed that is crippling, it is important to remember that you don't have to stick with the rate that you got at the start of your current mortgage," says Wason. "So, after you have had your mortgage for a while you may be able to negotiate a better interest rate because you could be a far less risky client to the bank. If you fix your rate now, you may be negating the benefits that a variable rate would allow in the long term. It is important that you shop around for a better rate on your current mortgage before joining the wave of fixed rate enthusiasts."
In addition to this, he says the individual should also do a complete analysis of their expenses and try to reduce their insurance, bank and medical aid costs.
Remortgaging could be a better option, so shop around
Wason argues that while a fixed rate may be worth your while for the next 18 months, it is important to remember that your mortgage is going to last at least 20 years. In that time, you may well be able to negotiate a better rate on your bond as your salary increases or your reduced risk profile starts to take effect.
"South Africans need to get far more dedicated to shopping around for a better rate – they would be surprised what they could be saving themselves."
A Fixed rate could just cost you
He adds that going out and seeking a fixed rate mortgage can be costly because nobody knows how long the rates rise is going to continue. "While the mood at the moment seems to suggest that we should all go out and fix our mortgage rates, it is important to view this in light of your own situation."
"If you could be getting a better rate on a variable bond, you are better off trying to negotiate that. Don't simply call up and ask what fixed rate the bank could offer you."
Looking at the numbers
For a R500,001 mortgage, where your loan to value is less than 80%, you can currently fix your rate for the following rates:

For the same mortgage on a variable rate you should be getting a rate of Prime less 2% = 14% (with an interest rise of 1% scheduled in on Thursday) therefore your repayments are R6,217.63.
Another option would be SA Homeloans' interest only rate of 13.5%, giving you a repayment of R5,995. This is the lowest monthly commitment, but remember that you are not paying off any capital.
What should you do?
Wason says it is important to remember that everyone's situation is different. No option is best for everyone so you need to do your own budget, establish what your priorities are and take the mortgage that best suits your situation. Also remember that you can always change your mortgage product again, as you may decide to get an interest only mortgage, ride our these stormy times and switch back to a capital and repayment mortgage once interest rates start coming down or when you can afford to pay more in.
For more information contact ian@bondbusters.co.za. Click here to visit the website.

Is it time to fix mortgage rates?

Banks 'stand up' for borrowers

Banks 'stand up' for borrowers
2008/06/27

Banks have an important role to play not only in getting people into houses, but also in keeping them there, which is why they have been prepared to make some "tough calls" lately that could quite possibly lose them a substantial amount of new business.
Such calls include the controversial decision to re-introduce the deposit requirement for home loan borrowers.
Following on the heels of 10 consecutive interest rate rises and the introduction of the National Credit Act (NCA), the deposit requirement is likely to further reduce the number of potential buyers able to qualify for a home loan, "but is still considered necessary now to ensure that our customers are not exposed to over-indebtedness", he says.
Speaking at the Homenet real estate group's national conference recently, Luthando Vutula, the new head of home loans at Absa, said the bank believed that by doing this, it would assist customers to make better buying decisions because they would have to contribute financially themselves if they wished to go ahead with a purchase.
"And while we all breathed a sigh of relief earlier this month when the Reserve Bank confirmed a 50 basis points increase in the interest rate, we can't afford to assume this is the last increase we're going to see this year. As a responsible lender, we also need to ensure that customers buying homes today have enough room in their budgets to weather the storm of possible future interest rate hikes."
Looking ahead, he told conference delegates the next two to three years would see all players in the real estate industry having to innovate new ways of making money "while protecting our customers from short-term impacts that could derail their long-term investments".
Meanwhile, he said, now was the time for serious property investors to start shopping around. "The best time to buy will be in 2009," he predicted.
"Patient investors will then be spoiled for choice and will be able to build a portfolio that will yield good results in years to come."
In addition, he said that buying a home remained the single most important purchase any individual could make.
"While the dynamics of the real estate sector may have changed since the boom years, a home remains a good investment that sets the foundation for wealth generation. At the moment, buyers may just have to adjust their expectations and start with a smaller home to ensure future affordability. Then when the cycle turns they will be in a position to upgrade to something closer to their original aspirations."
For more information contact Martin Schultheiss on 031 266 9850 or click here to visit the website.

Banks 'stand up' for borrowers