RE/MAX OF SOUTHERN AFRICA WINS REGION OF THE YEAR

RE/MAX of Southern Africa has been declared the RE/MAX International Region of the Year for 2012 at the awards ceremony held on the 27th February at the RE/MAX International convention in Las Vegas.  This means that RE/MAX of Southern Africa is the top performing region in the world.  This is also the third time that RE/MAX of Southern Africa has won the coveted Region of the Year Award in the past 18 years, having won previously in 2001 and 2005.

"This is a fantastic achievement for South Africa, especially considering that there are over 90 countries in the running globally.  The ability to win this award can be attributed to the passionate network of real estate professionals working under the RE/MAX of Southern Africa banner, who have flouted industry norms despite the challenging economic climate and housing market over the past few years.  It is particularly special that we received this award on the 40th anniversary of the RE/MAX brand, making it that much more memorable," says Peter Gilmour, Chairman and co-founder of RE/MAX of Southern Africa.

The RE/MAX International Region of the Year Award is based on a combination of various categories, which include sales performance, agent growth and services such as training, cutting edge technology, business support services and community involvement.  RE/MAX in Southern Africa has their Global Learning Centre - the most advanced real-estate training in the country and has just launched the RE/MAX Foundation to improve the lives and opportunities of all Southern Africans worldwide financial support.

"More than 30 new RE/MAX franchises opened in the Southern African region during 2012," says Gilmour.  "This brings the RE/MAX of Southern Africa network to over 170 offices and 1800 agents."

With over 20 years experience with RE/MAX, Peter and Val Gilmour, the original founders of RE/MAX of Southern Africa, purchased the Southern African Franchise Operation from RE/MAX International in 1994.  The countries that fall within this Master Franchise Agreement include South Africa, Namibia, Botswana, Mozambique, Zimbabwe, Zambia, Angola, Mauritius and the Seychelles.  As the first country franchise sold outside of North America, the South African one is regarded as the pioneer of the RE/MAX International expansion and has consistently remained in the top three performing countries since its inception.  RE/MAX of Southern Africa was adjudged South Africa's Franchisor of the year for all categories by FASA in 2003 and was ranked as the largest real estate brand in the country in a Finweek survey feature during 2011.  Adrian Goslett, CEO of RE/MAX of Southern Africa, and Vicky Goslett, Senior Marketing Manager at RE/MAX of Southern Africa, joined the Gilmour's as regional owners in 2010.

"We have seen great opportunity in South Africa and the surrounding African countries as we emerge from the recession," says Adrian Goslett.  "We intend to continue to be one of the top performing countries in the world and by attracting productive estate agents who offer great customer service to their clients and who want to enjoy the benefits and services of the dominant world-wide real estate brand.  RE/MAX is now represented in over 90 countries with more than 6000 offices and a worldwide referral network of 90 000 agents across the globe, giving the RE/MAX brand the largest international presence of any real estate organisation."

Gilmour says that RE/MAX is recognised as one of the leading real estate franchise companies with the most productive sales force in the property industry around the world.  "As the saying goes, nobody in the world sells more real estate than RE/MAX, and South Africa is top of the list," he concludes.

Tips For Buying A Renovators Dream

 Buying a home that is in serious need of renovation is not for everyone and can be riddled with disaster.  However, for those who do have the know-how and finances, it could be a very profitable and rewarding endeavour.  The difference between a successful investment and a money trap lies in choosing the right fixer-upper home from the start. 

The perfect home that everybody wants may be hidden under a variety of elements that would normally turn many buyers away, such as peeling paint and a sagging ceiling.  An investor looking to find the ideal fixer-upper will have to see past all that to visualise the home's true potential.

If you are thinking of buying a fixer-upper, here are some pointers to consider:

Location:
No matter what kind of property a buyer is interested in, one aspect that will always need to be considered is location.  A property's location will largely determine its value once it has been fixed up and put on the market.  If the house and neighbourhood are in need of repair, there may be a risk of over-capitalising and having a nice house in a bad area.  From an investment perspective, it is always better to purchase property in a desirable area that is close to a range of amenities - the rule is to rather buy the worst house in the best suburb than the best house in a suburb which is not well located.

Composition:
Generally the most sought after type of home in a particular area is the one to choose.  If most of the buyers in an area are looking for a three-bedroom home, then don't buy a two-bedroom one, or if sectional title or estate properties are the way to go, choose an investment home where demand is strong.

Design:
The general layout and design of the fixer-upper home needs to work.  Moving walls or rectifying a home that has been designed badly can be very expensive.  The layout of the home should flow and be practical.  For example, if a buyer has small children they would not want bedrooms to be on opposite sides of the property.

Condition:
It is important to consider the overall condition of the home to decide whether the renovations are manageable or require major changes.  If too much needs to be done to make the house liveable, it may be worthwhile looking elsewhere.  Aesthetic improvements are typically less costly and take less time than other modifications.

Less costly easy fixes:
-  Filling small cracks, repainting both interior and exterior
-  Sanding and refinishing wooden floors, tiling or laying down new carpets
-  Updating lighting with contemporary styles
-  Refurbishing or replacing skirting boards
-  Fixing broken windows
-  Adding a deck
-  Resurfacing kitchen cupboards
-  Upgrading bathroom fixtures
-  Replacing doors

Potentially costly fixes:
-  Shoring up foundations
-  Additing additional rooms, a garage or moving walls
-  Replacing window frames throughout
-  Replacing the roof
-  Replacing all plumbing and electrical
-  Pouring concrete for driveways, sidewalks, steps
-  Complete kitchen or bathroom remodels (even though these changes can add value to a home)

Happy Valentines Day

IMF REVISES SA’S GROWTH FORECAST FOR 2014

By Mariam Isa

The forecast in the International Monetary Fund’s latest World Economic Outlook surpasses the 3.8% predicted in its previous October report

THE International Monetary Fund (IMF) has revised its growth forecast for South Africa next year significantly upwards, predicting the economy will expand by 4.1%, up from an estimated 2.8% this year.
The forecast in the IMF’s latest World Economic Outlook surpasses the 3.8% predicted in its previous October report and is well above both market consensus and official estimates.
The Treasury sees the economy expanding by 3.8% next year, while the Reserve Bank expects growth of 3.6%. Consensus forecasts compiled by Reuters predict the economy will grow by 3.5% next year.
There were no reasons given for the IMF’s updated estimate for South Africa.
Global growth will strengthen gradually this year, but the recovery will be a bit slower than anticipated in October, the lending body said.
"Policy actions have lowered acute crisis risks in the euro area and the US. At the same time, policies have supported a modest growth pickup in some emerging market economies," the IMF said in its report.
"If crisis risks do not materialise and financial conditions continue to improve, global growth could be stronger than projected. But downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the US."
Growth in global economic output was set to quicken to 3.5% this year from 3.2% last year, and accelerate to 4.1% next year, the IMF said.
But it revised its outlook for activity in the euro area downwards, predicting that it would contract by 0.2% this year, compared with an October forecast for growth of 0.2%.
Next year, the IMF sees output from the euro area, which is one of South Africa’s main trade partners, expanding by 1%.
Even though policy actions have reduced the risks and improved financial conditions for governments and banks in the periphery euro economies, this had not yet translated into improved borrowing conditions for the private sector, the IMF said.
"Continuing uncertainty about the ultimate resolution of the global financial crisis, despite continued progress in policy reforms, could also dampen the region’s prospects," it added.
Growth in the US was set to slow to 2% this year from 2.3% last year, and then accelerate to 3% next year — broadly unchanged from October estimates, the IMF’s forecasts showed.
"In particular, a supportive financial market environment and the turnaround in the housing market have helped to improve household balance sheets and should underpin firmer consumption growth in 2013," the IMF said.
Growth in emerging market and developing economies was set to build up to 5.5% this year from 5.1% last year, before quickening to 5.9% next year, the IMF said.
"But weakness in advanced economies will weigh on external demand, as well as on the terms of trade of commodity exporters, given the assumption of lower commodity prices in 2013," the IMF said.
Emerging economies had to rebuild policy room for maneuver but "the appropriate pace of rebuilding must balance external downside risks against risks of rising domestic imbalances," it added.
The IMF left its forecasts for China unchanged, saying growth was expected to pick up to 8.2% this year from 7.8% last year and accelerate to 8.5% next year.
Its near-term growth outlook for Japan was left unchanged at 1.2% this year but was revised down to 0.7% next year, from 1.1% in October.

HELLO FROM PLETT, FEBRUARY 2013

The Season has come and gone. The children are back at school. The new Grade 1s have broken in their new school shoes, had their first sports day, and are settling down into the routine of “big school”. The weather is good and the year is off to a great start.

The signs are good that we have seen the worst of the bad times and that confidence in the economy is improving throughout the country. The IMF, in its World Economic Outlook has revised its growth forecast for South Africa, predicting that the economy will expand by an estimated 2.8% this year and an encouraging 4.1% in 2014. Similarly the Treasury, The Reserve Bank and Consensus reports compiled by Reuters, predict growth between 3.5% and 3.8% in 2014. (See the full article)

February is the month for lovers, with Valentine’s Day on the 14^th. Show your loved one that you care and buy him or her, a new house, or at least a nice little lock-up and go apartment for those romantic weekends away. We have some fantastic buys and will even work late on the 13^th, so that you are not disappointed. Don’t delay. Contact us today.

Property Fundamentals & Relationships Remain Important in 2013

Peter Gilmour, Chairman of RE/MAX of Southern Africa, gives his perspective on the South African property market during 2012 and his insights for the year ahead

While the real estate market continued to recover during 2012, and both sales volumes and property prices showed a gradual increase, the criteria that South Africa's financial institutions expected people to meet in order to qualify for mortgage loans remained onerous.  This resulted in many buyers not being able to obtain the necessary finance to purchase a property, says Peter Gilmour, Chairman of RE/MAX of Southern Africa.  "Despite this challenge, 2012 was a solid year for real estate in South Africa."

Gilmour points out that high debt-to-income ratios and a poor savings culture are the major reasons why many South African homebuyers have struggled to obtain finance.  "South Africa only has a domestic savings rate of around 20% of GDP, compared to other emerging markets like China which has a domestic savings rate of around 50% of GDP.  High debt and poor savings reflect negatively on affordability levels, which has held back the market and slowed down recovery.  For this to change in 2013, South African consumers will need to focus on clearing their debt and starting a savings programme to ensure their ability to secure home loan finance in the future," says Gilmour.

Even though the property market held some challenges in the year gone by, Gilmour notes that there were a number of positive events that will have a great impact on the market in the years ahead.  He says that a significant move was the change of management of the Estate Agents Affairs Board (EAAB) from the Department of Trade and Industry to the Department of Human Settlements, which is being headed by Tokyo Sexwale.  "We have every confidence that this change will have a positive effect on the industry in 2013 and we look forward to new era in the real estate business that is synonymous with good governance and transparency," he says.

Added to this, Gilmour also points to the large numbers of agents who continue to qualify with NQF4 and NQF5 certificates - an effort which he says will result in the continuous increase in the level of professionalism in the industry.  "Furthermore, improved procedures by the EAAB will result in mor agents obtaining their certificates to operate in a timely fashion," he says.

So what does RE/MAX of Southern Africa see as the big issues for property in 2013?

"We certainly see another very interesting year ahead," says Gilmour.  "The more things change the more they stay the same.  Despite all that has changed in recent years and all the technology advances that have assisted real estate professionals, the fundamentals of being successful remain the same."

One of the most important fundamentals in business is relationships.  Gilmour says that relationships have always been important, and will continue to remain a vital component of business success in 2013.  "For sales professionals, 70% of housing consumers will choose an agent due to some form of personal relationship.  While the percentage of homebuyers that find their agent online has increased substantially, technology will never be able to replicate or replace a personal relationship."

Just as relationships form a key element of the property buying and selling process, so leadership is key to a successful real estate business.  Gilmour says that good leadership is still paramount to agents and will largely determine which brokerage companies they associate with.  "Strong principled leadership will continue to characterise successful companies in the year ahead."

Gilmour is optimistic about property sales and house prices in the year ahead.  As investment in businesses and infrastructure increase, there will be a gradual increase in employment which will lead to increased demand for both rental properties and property to buy.

"Home prices are expected to continue their gradual rise in 2013, especially in the high demand areas and price brackets, while interest rates are expected to remain low, therefore presenting buyers who have cash and can qualify for mortgage finance with a great opportunity to invest in a home at a good price."

He adds that due to the limited access to finance, it is expected that the rental market will continue to grow rapidly in the year ahead.

Buying patterns will also start to be more closely linked to the rising cost of living as buyers base their purchasing decisions on living costs more so than ever before.  "As prices of petrol, electricity and the like continue to rise, buyers will be looking to buy functionality - closer to schools, work and lifestyle attractions.  Buyers will also be looking for other cost-saving mechanisms in the homes they buy, such as solar heating, property insulation and other green and energy saving features."

Gilmour concludes by saying that overall, he expects 2013 to be a year of measured improvement in the real estate market.  "While the growth in real estate in the year ahead may not be substantial, it will certainly provide opportunity for buyers, renters, agents and real estate companies to improve their situations and benefit from the relative economic stability that South Africa has to offer.

ANNIVERSARY: RE/MAX EXPANDING IN AFRICA

Real Estate agency RE/MAX celebrates its 40^th anniversary on January 30.  RE/MAX of Southern Africa ranks as the largest real estate franchisor in the sub-continent.  Its chairperson, Peter Gilmour, said that more than 30 new RE/MAX franchises opened in the region during 2012. 

“This brings the RE/MAX of Southern Africa network to over 170 offices and 1800 agents.”

The company was established in 1973 in Denver, Colorado, U.S., by Dave and Gail Liniger.  Gilmour said RE/MAX was recognized as one of the leading real estate franchise companies with the most productive sales force in the property industry worldwide.  In South Africa the brand has also enjoyed great success.

PLETT MARKET STARTS TO PERK UP AGAIN

After a tough cycle, agencies are reporting a slow return to glory for this popular holiday town

Unit sales in Plettenberg Bay are up by about 15 percent, with more than 300 properties sold during 2012 compared to about 260 in 2011, says Seeff principal Kevin Engelsman.  “We more than doubled our sales in the past year; selling 88 properties worth a total of 170 million, compared to 42 units in the previous year.  Although most properties sold in the town are still in the sub-R4m price band, it was encouraging to note that some more expensive properties were sold, at prices ranging from R15,5m to R23m, mostly to Joburg holiday home buyers,” said Engelsman.

“Many of the holiday properties sold over the past year were older home buyers intending renovating.  In particular, homes with sea views or near the beach have attracted significant interest over the past year.”

There has also been renewed interest in vacant plots and about 20 percent of all properties sold over the past the past year were vacant land.  The Whale Rock development plots, which range in size from 1 021m² to 1 600m² and were released at discounted rates of up to 65 percent towards December, sold out within five weeks.  Engelsman says Seeff sold 24 of the available 33 stands at prices that ranged from R162 500 to R330 000.  “Following a period of high price expectation on the part of sellers, serious sellers became more amenable to pricing in line with market demands last year.  We expect that holiday and investor buyers from Gauteng and other inland provinces will continue to look for good value this year.  “Consequently, prices will remain flat.  It remains a buyers’ market and, especially in view of the flat economic growth forecasted for 2013, sellers will need to continue to price conservatively,” he said.

Cheryl Anley, of RE/MAX Prime Properties, which operates in the Plettenberg Bay area, says the demand for leisure property has remained fairly muted.  However; now that the property market is well into the recovery phase, demand for leisure properties has slowly started to increase.

“Property sales in Plettenberg Bay were quiet for the first half of last year, but there was an increase in activity in the second half.  Rentals have also been slow during the year, which is fairly normal, but there was a good demand for the holiday season.”

Sales and prices took a serious knock over the past three years.  The market is still recovering and prices are still stabilizing, so it’s not advisable to buy property with the idea of a quick turnover: However, there has been an increase in sales over the past six months.  We believe we are close to the bottom of the property cycle and the situation will slowly improve from here on,” said Anley.

“Plettenberg Bay buyers and renters are mostly families from Johannesburg, Cape Town and the Free State, although there are some investors wanting to buy property.  Buyers are looking for homes priced between R1.5m and R2m, and the most popular rental properties cost between R2500 and R3500 a day during the high season.” 

Anley said that secure estates and homes close to the beach or with sea views were the most sought after, although price was playing a large role and good buys were becoming more dominant than emotional purchases.  If the price was right, buyers were prepared to upgrade their homes.

According to Pam Porter, principal for Jawitz Properties, Plettenberg Bay, it has become easier for first-time buyers to get on to the Plettenberg Bay property ladder.  “Four years ago, you could not buy a freehold house in Plett for under R1,5m, but now buyers can pick up homes for as low as R1,2m” she said.

“More and more people are relocating to Plett.  It has a great primary school, we are attracting an increasing number of medical specialists and we’re also anticipating the re-opening of the airport.  “There are considerably more freehold property than sectional title sales in the area, and a wide range of properties are available.  On any given street you can find a palatial property neighboring older, smaller homes.  “Properties that are will priced sell well, although some sellers hold out until they get their desired prices,” she said.

“Properties for sale under R4m, are most in demand, with 66 percent of freestanding property sales in 2012 falling in this price bracket – almost double the number of buyers for this price range compared to 2011.”

However, 21 percent of freestanding sales were for over R8m, and Jawitz Properties has been mandated to sell a home in Twin Rivers Estate between the Bitou and Keurbooms rivers at R9,95m.  The 649m² property had a 32m² boat house and a 206m² patio space.

RECESSION RESHAPING CONSUMERS

The next generation of home buyers are more savvy than their parents were

THE PAST few years have been extremely interesting and have irrevocably changed the property market, according to Adrian Goslett, chief executive of RE/MAX of Southern Africa.  “The housing crisis experienced at the end of 2008 changed the dynamic of the real estate environment and has affected most people in some way – and not all the effects have been negative.

“As a result of the recession, the current generation of home buyers has become increasingly more knowledgeable about home ownership.  This is partly because property ownership and access to finance requires more preparation and planning, along with the increased media coverage of property topics that home buyers have been exposed to over the past six years.

“Younger consumers believe that the recession has made them more knowledgeable about the property market than their parents were at the same age.  The increased amount of information about property and easier access to the information through the internet has led to many consumers doing their homework more thoroughly before making one of the biggest investments of their lives,” says Goslett.

“Most consumers aged between 18 and 35 still believe that home ownership is a key indicator of success and are willing to do what it takes to be able to buy their own homes.  Statistics suggest that 75 percent of consumers in this age group value home ownership more highly than taking an extravagant holiday or owning an expensive car. 

“Although the stringent lending criteria of financial institutions have made buying property more challenging now than during the property boom period, many potential first time buyers are eager to do the necessary research and save the required deposits, even if this means a change of lifestyle.”

Adults between the ages of 31 and 45 who are generally well established in their careers are the most active and driving the real estate market.  However; Goslett says adults younger than 30 make up a much larger generation and have already made their presence felt in the market.  Statistically the population in South Africa shows that there were 18.74 million births between 1965 and 1985, and about 28.4 million consumers in the under-30 group.

Goslett says the larger generation will mean the demand for property will steadily increase as these young people come of age to buy their first properties.  However, considering that the average age of a first-time buyer is in the mid-thirties and the oldest citizens born between 1985 and 2010 are now only 27, it could take some time before this generation reaches its full economic potential.

“The Great Depression shaped the lives of the Greatest Generation, while the oil crisis during the 1970s affected the Baby Boomers.  Generation X and Generation Y are now leading the property market after the largest modern-day housing recession we have seen.  It seems that every generation has faced certain economic circumstances that have changed their collective perspective in some way.  Today’s generations believe that the risks, details and rewards of buying property are integral to their planning for future financial success,” Goslett says.

EASY STEPS TO A BRIGHTER FUTURE

While the South African economy has largely recovered from the tough global downturn, many consumers and homeowners are still struggling with the rising cost of living.

So how do consumers save money with living costs on the rise?  Here are a few small steps towards cutting costs, reducing debt and maintaining a budget that allows homeowners to save money: 

Step 1
Paying less money for unnecessary items is the first step to saving money.  Sit down with the members of the family living within the household and make a list of each member's expenses.  Work together to see which expenses are absolutely necessary and which ones can be reduced or cut out completely.  For example, encourage everyone in the family to unplug appliances when they are not in use, pack lunches for work or school instead of eating out and reduce internet or television packages to the essentials.  If two cars are being used in the household, if possible, consider reducing travelling costs by taking one car.

Step 2
Once expenses are identified, divide them into two categories, those that are priority and core expenses and those that are not.  Set money aside each month for the expenses that are nonflexible, such as bond repayments or rent, levies, utilities, insurance.  Other expenses such as entertainment, food and petrol are the expenses that can be reduced to accommodate for more savings.

Step 3
Keep a record of all money spent.  Write down every amount spent in a journal or notepad that can be carried around and then translate all lists kept by family members into one household spreadsheet.  This will help you to formulate a visual aid as to where the money is going and how and where to reduce areas of unnecessary spending.

Step 4
Have a day of the week that is set aside for a cash withdrawal and keep it to only once a week.  Withdraw enough money to cover all weekly expenses, taking into consideration aspects such as spending money.  If the money runs out, do not make another trip to the ATM until the following week.  Check balances online to manage the account effectively.

Step 5
Where possible do not rack up further credit card debt, either use cash or a debit card.  If there is no money in the account or no cash available, do not buy the item unless it is absolutely essential.  Credit cards incur interest and will often lead consumers to spending outside of their set monthly budget.

Cutting costs and adhering to a budget will give homeowners the excess funds they need to put towards savings and create a foundation on which financial freedom is built.  Having a nest egg to fall back on in tough economic times will help homeowners to weather any future financial crisis and protect their most valuable asset, their home.