World Travel Awards Nomination!

World Travel Award Nominee – Africa’s Leading Beach Destinations 2012

“World Travel Awards, “the Oscars of the travel industry”.

World Travel Awards serves to acknowledge, reward and celebrate excellence across all sectors of the global travel and tourism industry.
Plettenberg Bay Tourism is proud to announce that Plettenberg Bay is once again nominated for the 3rd year in a row as one of Africa’s Leading Beach Destinations 2012, alongside Bazaruto, Mozambique, Cape Town, South Africa, Diani Beach, Kenya, Sharm El Sheikh, Egypt and Zanzibar Island, Tanzania who is also contending for the coveted Award.

We urge you all to follow the link below and Vote for Plettenberg Bay:

http://www.worldtravelawards.com/award-africas-leading-beach-destination-2012

Register and Vote Plettenberg Bay – Closing date 7 September 2012

“Love Plett Love Life”

Courtesy of Plett Tourism

Local News - June 2012

What a wonderful place we live in.  Plett in Autumn is awesome.  We are beginning to feel the cold fingers of winter creeping into our early mornings and evenings, but the days are wonderfully warm and bright.

It is not only us who appreciate what a wonderful place this is.  For the third time in a row, Plett has been nominated for the World Travel Awards as one of Africa's leading beaches, alongside Bazaruto, Mozambique, Cape Town, Diani Beach in Kenya, Sharm El Sheik in Egypt and Zanzibar Island.

It appears that even in ancient times, Plett was considered an idyllic place to live.  During excavations for extensions to a house in Turtle Creek, the owners were horrified when a skull was unearthed.  The police were immediately called, but it was soon established that the skull and other bones found were archeological, rather than forensic in nature.  They were carefully excavated and taken to Professor Alan Morris - Professor of Human Biology at the University of Cape Town, who established that the bones and skull belonged to a young girl in her late teens, probably buried between 1500 years ago.  She was alone and buried in an upright, sitting position.  This points to the fact that she was probably a forebear of the Khoikhoi, who buried their dead in a sitting position wrapped in a kaross.

On a lighter note, Plett is gearing up for it's own Masterchef type competition.  Hosted by the local LM restaurant, "So You Think You Can Cook" will be a fun filled opportunity for local aspiring chefs to show off their signature dishes.  The competition will run over a number of weeks, starting on 31st May and heading towards the nail biting finale on 7th September.  The chief judge will be local resident, Paul Dean, well known chef and celebrated "foodie", and all the excitement will be recorded by our local press and radio station, MC90.3FM.

Fixed Rate Debate Still Rages

To twist a line from William Shakespeare the big question is whether to fix your bond rate or not?

With the interest rate at a low that we last saw 38 years ago, it is no wonder that homeowners are contemplating fixing the interest rate on their bonds," says Adrian Goslett, CEO of RE/MAX of Southern Africa.  "A fixed interest is definitely something to think about for homeowners who are risk averse or who want to have a fixed amount that they can add into their budget every month."  "If a homeowner is stretched to the limit they may want to fix their rate to ensure that there are no additional or unexpected expenses that they will have to deal with over the next two years, explained Mr. Goslett. 

However, there are a few aspects that homeowners should consider before deciding to fix their bond rate.  "While banks are advising home buyers to fix their rate now, which means that their monthly repayments will remain the same even if there is a rate hike in the future, generally the fixed rate is between 1,5 percent and 2 percent above the current prime rate, depending on the agreed terms of the contract.

"This means that the fixed rate will provide a buffer for homeowners if there is a sharp hike before the contract term is over.  However, if there is no increase the homeowner will be paying more for their bond than if the rate was linked to prime."

Mr. Goslett explains that at the current prime rate of 9 percent, repayments over a 20 year period on a bond of R500 000 would cost around R4 498.63 per month.  If the rate is fixed at 11 percent a bond of R500 000 would cost approximately R5 160.94 per month.  For the fixed rate to have benefited the homeowner, the prime rate would need to have increased by at least 3 to 4 percent over the 20 year period.  "Fixed-interest rate agreements are generally fixed for a period of between two and five years with exceptions given by certain financial institutions.  "Depending onthe bank or institution, in some cases the homeowner may be able to cancel the contract by giving notice, while in others the fixed rate cannot be cancelled by the homeowner until the fixed period has expired or the property is sold."

Mr. Goslett warns homeowners to check what options are available to them and whether an administration fee will be charged to a fixed rate contract before signing.  "Historically, interest rates have fluctuated cyclically over a five year period by approximately 5 percent per cycle.  "However, given the current economic conditions, it is highly unlikely that the interest would increase so dramatically over the next five years and is more likely to stay fairly steady or increase marginally," he said.

Mr. Goslett says that the loan period is just as important as the interest rate for homeowners to take into consideration when assessing their financial future.  "Homeowners could consider paying the difference between what they pay now and what they would on a fixed rate directly into the bond themselves to reduce the capital.  "This could also reduce the term of the loan and total interest paid over that period.  In addition it would provide protection against future rate hikes or other unforseen circumstances.  "A few hundred extra rand that is paid into the bond each month could save homeowners as much as R100 000 or R200 000 over the term of the loan."  He notes that due to the fact that so many consumers have interest bearing debt, the cumulative effect of short and long term can be devastating, especially if interest rates do begin to increase.  "The best way for homeowners to alleviate the stress of increasing interest rates is pay off all short-term debt as soon as possible," concluded Mr. Goslett.

The Ins And Outs Of Capital Gains Tax

Although it does not apply to every property sale, it is important for property buyers and sellers to be aware of the implications of Capital Gains Tax (CGT) and how it could affect them in their future property transactions, says Adrian Goslett, CEO of RE/MAX of Southern Africa. 

Implemented on the 1 October 2001 as part of an ongoing tax reform programme in South Africa, CGT is tax payable by the seller of an asset or fixed property on the profit made from the transaction.  The tax applies to all individual South African resident taxpayers, companies, close corporations and trusts, and it includes any capital sales made from the sale of their world-wide assets.  Non-South African resident taxpayers who sell immovable property in South Africa are also liable to pay CGT.

According to Goslett there are certain exclusions applicable to CGT, for example, if an individual sells their primary residence they will need to make more than R2 million profit on the sale before CGT is applicable.  At the recent 2012 Budget speech it was announced that this exemption amount would change from its original threshold of R1,5 million to R2 million on all primary residences sold from 1 March 2012.  This means that for any primary residence sold for R2 million or more, the first R2 million would not be subject to taxation.

A primary residence is defined as a property that is owned by a natural person, must be the main residence of the individual and must predominantly be used for domestic purposes.  However, the exemption will be apportioned for periods where the property is not used as a primary residence or its used for business purposes.  Under certain cirmcumstances the seller may leave the primary residence prior to the sale without losing concession, and the exclusion is extended to a special purpose trust.

Goslett says that in the case where a primary residence is registered in the joint names of a husband and wife, they would each benefit from their respective R2 million abatement oon their share of the capital gain as both are considered to be taxpayers.  "However," says Goslett, "both parties would have to reside in the property and a husband and a wife could not have two primary residences."

He notes that no exemption will apply on capital gain realised from the sale of an individual's second home or holiday home.

To calculate the capital gain of a transaction, sellers need to deduct the price of the property sold from the base cost of the property.  The base cost is calculated by adding the original price paid for the property and the costs for buying and selling the property such as estate agent's commission, attorney fees and other fees for other professionals such as electrical and plumbing inspectors.  The cost of any renovations which qualify as improvements to the property can also be included; however, costs of routine maintenance may not.

SARS will then calculate the CGT to be paid based on the net profit realised.  The capital gain amount will then be added to the individual's income and taxed according to the tax brackets.  The CGT becomes payable when the individual's income tax return is submitted at the end of the financial year during which the property was sold.

"In certain circumstances property tax can become complicated, and if unsure it is always advisable that buyers and sellers seek the expert services of a tax consultant or property lawyer who can offer guidance through the process," Goslett concludes.

RE/MAX Of Southern Africa Continues Forward

The first quarter of 2012 has continued to show an increase in activity in the property market, with RE/MAX of Southern Africa reporting a growth in their overall sales when compared with the same period during 2011.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that so far 2012 has proven to be a much better year in terms of property sales volumes and values throughout South Africa.  He says that when compared with sales during the period of January to April 2011, all regions across the country have shown an overall increase of 11% in house sales.

Goslett says that buyers have become more confident in the market and this has reflected positively in the property sector with website activity and online property queries having increased by 18%.  Low steady interest rates coupled with more affordable pricing have attracted buyers resulting in the market yielding some good results in the first quarter of 2012.  "More buyers have been able to enter the market due to property pricing.  The low interest rates have also contributed to consumers reducing their debt and many more buyers are now able to show the necessary affordability required by financial institutions to gain access to finance.  The outlook for the interest rate during 2012 is once again stable which will continue to assist buyers and the market moving forward," says Goslett. 

Aside from the positive sales figures, RE/MAX of Southern Africa has also grown in office and agent numbers too, with the number of agents working under the RE/MAX banner growing by 7% on the figure in 2011.  Looking forward to what the rest of 2012 holds, Goslett anticipates that interest rates will remain stable and demand for property will continue onits upward trend, with more consumer confidence growing in the market.  "With many of the access market stock having been sold and some regions starting to report a lack of supply, we may see the market turn quicker than expected.  Buyers should take advantage of the current property prices while they can," Goslett concludes.

Sole Mandate - 22 De Meermin

22 DE MEERMIN

SOLE MANDATE

R4 374 000

A rare opportunity to own a stunning apartment in this prestigious, secure, well situated block.  This apartment boasts 2 bedrooms, 2 bathrooms, a large open plan kitchen, fully equipped dining room and a comfortable lounge, leading onto an enormous patio, which embraces the most exquisite views of the bay, mountains and lagoon.

Contact Michelle Solomon on 082 7845011

May - Property of the Month

RIVER FRONT HOME

SOLE MANDATE
R4 680 000

This is an opportunity to acquire a beautiful river front home in Plettenberg Bay.  Catch fish from the edge of your garden or jump into your boat and go on a leisurely cruise up the Keurbooms River.  

Located within a private secure estate offering an amazing lifestyle, swimming pool and tennis court.  This house is positioned on a generous plot of 2400 sq m with a stunning garden to round off this exceptional find!

Graham Anley 082 491 0529

Enquire

Tricks of the Trade to Sell your House

Having the most beautiful house on the block is one thing, but getting buyers into it is another, says Adrian Goslett, CEO of RE/MAX of Southern Africa.  He says that in today's competitive buyers' market, sellers need to have a strategy in order to increase the volume of buyers that see their property on any given show day.  "It is simply a law of odds," says Goslett.  "While it only takes one buyer to purchase a property, the more exposure the property has to the market, the quicker a seller will be able to find their perfect buyer."  Goslett discusses a few things that sellers can do to ensure that buyers will be flocking to the property during a show day:

Correct Pricing:  According to Goslett, the first and most important aspect of increasing the number of buyers that come to see the property is correct pricing.  "A property that is excessively priced will scare buyers away before they have even stepped through the door.  It is vital that the home is marketed for a value that is related to the current prices of other similar properties in the area offering the same features."  In order for a seller to know whether their property is within the correct price bracket, it is advisable for them to consult with a professional real estate agent specializing in their particular area.  Their extensive knowledge of the industry and access to a variety of statistics and property tools enable them to correctly determine what fair market value is.

Leave it to the Professionals: Working with a professional real estate agent will also give the seller access to that agent's network of potential buyers and support from the real estate agency.  An estate agent will have a tried and tested strategy on how to most effectively market property in their specific area.  The value added service that estate agents provide in marketing the property is invaluable.  Among other tasks, estate agents generally take photos of the home for sale, list it on a number of websites and pay for the costs of advertising, all of which will increase the amount of buyers the property is exposed to.

Choose the Correct Time: While occasionally some buyers may respond to advertising and will ask to view the home during the week, historically the best time for a show day has proven to be between 1pm and 5pm on a Sunday afternoon.  However this may vary depending on the area or town.

Make the Home Inviting: One of the biggest sources of buyer leads comes from agent "For Sale" and "On Show" boards.  The old adage that first impressions last is very true when it comes to buyers viewing a property on show day.  Sellers must ensure that the house is well maintained and looking its Sunday best.

   

Bond Approvals Rising As Banks Relax Their Criteria

While the recession might still be fresh in the minds of some consumers, it appears that more people are looking to enter the property market.  The good news for prospective buyers is that banks have relaxed slightly their lending criteria and bond approval rates have increased.

Market segments such as the first-time buyers and emerging buyers are beginning to play a more active role in the residential property market.  Adrian Goslett, CEO of RE/MAX of Southern Africa, said that in the boom years, as many as 80% of all home-loan applications were granted.  At the moment, the bond approval rate is about 50%.  However, numbers are gradually improving. 

The increased number of approvals since the recession period is due to more buyers showing affordability and property pricing coming down to more realistic levels.  Various house price indices have reflected this end. 

Mortgage originator BetterBond recently noted that the year-on-year volume bond transactions that they processed during February 2012 was 63% higher than during the same period in 2011.  Although accessibility to finance is more readily available to buyers, Goslett pointed out a few things that would-be homeowners can do to ensure they are approved for finance.

Tips for Finance Affordability
Affordability is an important element of the bond approval process.  A buyer's affordability is determined by using a simple calculation using the applicant's gross income, net income and fixed monthly expenses.  All these factors will be taken into consideration to gain some insight into the buyer's monthly disposable income.  According to the South African credit legislation, which governs the practice of mortgage lending, a financial institution may not grant a bond if the monthly repayments are more than one-third of the applicants monthly net income.  Banks generally use a repayment to income ratio of 39%, as well as the available disposable income to work out what amount the applicant will qualify for.  The more disposable income, the more likely the bond will be approved.

Have a Deposit
While it is possible to get a 100% home loan, the standard requirement is for the applicant to have a minimum of a 10% deposit of the asking price of the home, and in some cases a deposit of up to 30% is required.  The lower the percentage of the price that is required to be financed, the more likely the bond will be approved.

Good Credit Rating
Before an applicant is considered, a lender will run credit checks on them to see whether there are any judgements or payment defaults against their name.  Keeping a clean credit record and managing credit accounts well will better the buyer's chances of approval.

A Steady Income
Generally, banks require an applicant to have proof of a consistent income over the past three years.  Buyers who have a good credit rating and show a stable source of income will be looked upon more favourably.

Self Employment 
Many people aspire to become entrepreneurs and own a business.  Despite the earning potential, business owners are self-employed and regarded as a higher risk, and, in compliance with the National Credit Act, lenders are more careful when giving loans to people in these positions.

                           

Solid Future For Property Market

With South African Consumers having experienced some of the most ineresting times in economic history, it would be easy to think that battle-weary buyers may hesitate to enter the property market.  However, it seems that the opposite may be true as figures show an increase in the average residential demand rating among consumers in the recent months, says Chairman of RE/MAX of Southern Africa, Peter Gilmour.

"Those who have worked in the property industry or have invested in the market have been in the front row seats to the most fascinating economic events we have seen during modern times.  We have seen the market yield some amazing returns during the boom with years of rising property prices, then the sub-prime crisis and then what has been dubbed as the Great Recession.  Now we are in a recovery stage and many opportunities have opened up in the market for buyers who were previously unable to afford property," says Gilmour. 

Generally sentiment among buyers has become more positive, which can be seen in the higher demand for residential property as well as the marginal growth in the real house price index.  According to the latest House Price Index (HPI) report by First National Bank's (FNB) Household and Property Sector Strategist John Loos, the recent moderate improvement in the house price growth is partly as a result of late real economic growth in 2011.  Compared with price levels at the inception of the FNB HPI back in July 2000, real prices were 69.4% higher as at February 2012, while nominal prices were 226.8% higher as at March 2012.

Loos says that with the interest rate cuts starting as far back as December 2008 and consumers becoming accustomed to low and stable interest rates, lender and borrowing household's behaviour has become more pro-cyclical and the bad events of the 2008/9 recession and interest rate peaks are becoming nothing more than distant memories.  As bad events fade into the past, consumer confidence continues to grow as their perception of risk improves.

"During 2009 many economists predicted that the two years that would follow would be fairly steady and the market would be expected to see a greater recovery during 2012.  While not all global property sectors have seen a marked increase in the rate of recovery, the South African market has seen more first-time buyers and investor interest during 2011 and so far in 2012.  Although 2012 is not expected to yield spectacular results, positive consumer sentiment is growing among homeowners and the market continues to reflect this in its continually increasing transaction volumes.  The South African market has continued to move from strength to strength with improved property sales figures year-on-year.  If South African consumers were pessimistic about the market in the past, it is not holding them back from wanting to buy property now," says Gilmour. 

He says that numerous local buyers have returned to the market and are taking up the opportunities that have presented themselves.  While some still err on the side of caution and believe that house prices will continue to feel the pressure for a while longer, RE/MAX of Southern Africa's sales figures for the first two months of the year are up by over 30% on the same period in 2011.  There are also reports that there is a decrease in supply, which is positive in improving the market balance.  The FNB Market Strength Index, which represents the demand rating minus the supply rating, moved up from a revised 44.9 in February to 45.2 in March.

Despite the property slump, homeowners in South Africa who have owned their property for over 15 years will have experienced extraordinary house price growth compared with those who have purchased their house in the past five years.  However, those who hold onto their property will once again see a growth in the price of their home in years to come.  According to FNB, the average house price growth for 2012 is expected to be around 6%, compared to 3.2% achieved in 2011.

"Based on the property cycle of the past 25 years, expectations are that the property market will continue to recover both globally and locally.  It is during this period of recovery that buyers will find the best property investment opportunities before the beginning of the next boom cycle," Gilmour concludes.

Local News - May 2012

As we bask in the last rays of Summer sun, and our Easter visitors have left, we slide gently into Autumn, with cool, clear, mellow days, where the sea is calm and blue and the mountains are purple cut outs...

The pace has slowed and the locals have ventured out to play.  The weather is balmy, our beaches simply beautiful, and we know we are the envy of our friends up-country with their frenetic lifestyles.

During May the sea is warm, and we can expect good fishing with both summer and winter reef fish, like Red Roman, and Steenbras being caught off the boats. 

Our very own local Plett radio station, MC90.3FM, celebrates its 3rd birthday this year, and continues to grow in popularity, with local news, items of interest, entertaining views and interviews.

The re-opening of the Plett airport to commercial flights is back on track with the first scheduled flights being expected in December of this year.

With wonderful specials being offered by most local guest houses at this pleasing time of the year, we invite you to come and see what Plett has to offer during May, should you feel tempted!!

Looking forward to meeting you,

The RE/MAX Prime Properties Team