“Innovation is the ability to see change as an opportunity – not a threat’ – Steve Jobs.

In a recent report by Lee Stacey, Chief Broking Officer at Aon SA Commercial Risk Solutions Division, failure to innovate and meet customer needs is one of the top ten risks, generally resulting in loss of income in businesses. Effective digitisation, offering alternative services and products, and having an agile business model were indicated as the best ways to reduce risk.

Some companies have failed to innovate, like Toys R Us, Hatachi, Blackberry, and even The Concorde, with the result that they have faded away. Some publishing and printing companies have lost their way by not moving to digital technology and their readers have moved to different sources. The fast-paced telecommunications industry has become consumer-driven, does anyone choose to buy a Nokia cell phone anymore? Consider the innovations of the last century and how quickly technology has advanced this century, bringing us to the brink of the Fourth Industrial Revolution. Will blockchain or artificial intelligence be the technological disrupter of the future? Will Elon Musk’s race to have an internet connection interfaced with the human brain deliver us into the sci-fi realm? There will always be technological changes and not all of them will work, but Aon SA’s report maintains that innovators, who are prepared to take the risks and listen to their customer’s needs, will remain relevant.

“At Property.CoZa our innovative robust business model attracts Property Professionals who are passionate about real estate and empowered to meet our client’s needs,” says Sandy Walsh, MD Property.CoZa South Africa. Property.CoZa is celebrating ten years of e-property innovation and recently launched their own new integrated website, with personalised websites for each Property Professional, as well as the advanced Listing Management System (LMS) to enhance their Property Professional’s exposure in the market. “Innovation is the lifeblood of any business and our bespoke technology and agile business model keeps us at the forefront, but we never forget that the real estate industry is primarily about people, relationships and integrity.” says Walsh.

August 12, 2019

We all know the age old saying “two heads are better than one” and the same applies when it comes to finances when you want to buy a home “two incomes are better than one”. But what if there is only one income, what if you are a single person wanting to buy your first home, how do you manage to save enough money to make that dream a reality?
The good news is, it is possible and here’s a few easy steps to take to make it happen:
1. Answer the 3 W’s
What? – what type of property would you like your first home to be? Are you looking for a small lock up and go apartment or are you looking to invest in a bigger home that you can share with renters?
Where? – In which city and area do you want to live? We all know that there are more expensive and less expensive suburbs to choose from. In less expensive suburbs you will find bigger properties for the same price that you can find in a smaller property in a more expensive area.
Why? – What is your motivation to buy a property? Do you want to live in the property yourself or are you buying it as an investment to rent out? If you will be renting the property out it will be easier to make repayments on your bond. You can still pay in an additional amount on your bond to ensure that your period of repayment is shorter.

2. How much does the property cost that you want to buy?
When you have answered these questions, start looking around on property websites like www.propertycoza.com and determine what the average selling price for the type of property is in the area that you are looking at. This will help you to determine how much money you will need to save for an appropriate deposit.
Your two biggest upfront expenses will be the deposit and associated fees like the transfer fees, bond registration fees, lawyer fees etc. Having a sizeable deposit saved up for your home loan application shows the bank that you are financially responsible and lowers your risk profile. A good credit score is a key factor in not only receiving a bond but also influences your interest rate. A better interest rate will help to reduce your monthly repayments. If you are a first-time home buyer, it is good to know that an average of 11% deposit is required.
We have some tools available for you on the Property.CoZa website to assist you with calculating if you can afford a property and how much your bond will be. Take a look at the following link to calculate your bond. Now you can also determine what the timeframe is that you need to be able to save enough money for a deposit.

3. Consider a lower entry point and work your way up
By far the biggest mistake people make when it comes to saving for and buying their first home is that they want the dream and they want it now. They want to live in their dream suburb, which is often out of their price range.

It is hard to enter the market, but once you are in the market it is easier to work your way up to more properties and better suburbs. Consider entering the market in a cheaper suburb and working your way towards the better suburbs.

Buying your first home is rarely a life decision so don’t stress about having to buy the perfect home right off the bat. Purchasing in a cheaper area will allow you to save your deposit much quicker and then you can use the growth in equity as a launch pad to a newer and better property later.

4. Be smart with your money and make room in your budget
When you don’t have a family to look after and many other financial responsibilities, it is easier to cut on unnecessary costs.
– Stop buying lunch and that early morning cappuccino on your way to work.
– Cut down on the unhealthy habits of smoking and drinking.
– Make eating out a budgeted treat.
– Unsubscribe from luxury monthly subscriptions where you get fashion items or wine of the month.
– Always go shopping with a list and don’t buy anything else that you don’t need as a necessity.
– Shop at affordable retailers and steer clear from luxury items. For the next year ask yourself “is this a necessity or is this a luxury?”.
– Shop around for insurance quotes. Negotiate better deals with your insurance provider or find a better deal at a competitor. If your car has gotten older, your monthly premium should be less seeing that your car is worth less than when you started insuring it.
– Pay less on rent and move into a more affordable apartment property.

5. Take it straight out of your pay
The only way of ensuring that you put away a specific amount each month is to take it directly out of your paycheck at the beginning of the month. Do not spend throughout the month and only put away what is left over. You will never reach your target this way.

6. Create a second income for yourself
The more money you can put away, the faster you will reach your goal. If you have any extra ways of generating a second source of income for example photography, house-sitting, providing administration or financial services like bookkeeping, use this money and save it in a low risk savings account.

If you receive any other money from other sources or “free money” like we call it, add this to your savings account. Examples of this is tax return money, competitions, cash gifts for your birthday etc.

7. Talk to the professionals
Do your research and speak to professionals in the industry.
– Bond originators: contact a specialist that understands home loans and knows the do’s and don’ts when applying for a loan. Contact Property.CoZa Financial Services at [email protected]
– Property Professional / Agent: agents work with properties everyday of their lives. If you find an agent in the specific area that you would like to buy, they can advise you best on what is available in that area, what is the average selling prices and ultimately they will help you find the best property suited to your needs.
Agents will also take care of all the complicated paperwork which will allow you to focus more on your savings plan. Agents also know what to look out for when buying property and they can assist with negotiating a better price between yourself and the seller.

Saving up is not a quick process, but when we start looking at our monthly budgets with a financial smart eye, we quickly see how much money we waste in a month. Yes, it will take a lot of sacrifice from you, but think about the end goal of owning something tangible that can appreciate in value instead of spending your money on short term satisfaction that won’t have any real value in five years time.

August 12, 2019

The Reserve Bank has cut interest rates by 0.25 percentage points, amid indications that international oil prices could fall further and that slowing global growth could prompt a round of rate cuts by most major central banks.

The repo rate is the benchmark interest rate at which the Reserve Bank lends money to other banks. Changes in the repo rate affect the prime lending rate, which is the lowest rate at which banks start lending to clients.  With the repo rate down, the prime lending rate will decline to 10% from 10.25% and will translate, into a saving of R16 a month per R100 000 borrowed for existing homeowners.

“Today’s announcement that the South African Reserve Bank has dropped the repo rate bodes well for the property market,” says Sandy Walsh, MD Property.CoZa South Africa.  “We have been waiting for a positive announcement like this and trust that this cut will bring some relief to our lacklustre market and stimulate buyer interest. More importantly, the cut may assist new bond applicants to achieve their qualification amount, known as gross household income.  An applicant seeking a R1 000 000 bond, providing income of R33 000, should meet the gross household income criteria. If a bond holder has a loan of R1 000 000, this repo cut will save R166 each month.  This may not seem much, but over 15 years this adds up to R29 880!“ says Walsh.

Source: www.businesstech.co.za

July 21, 2019

The South African Reserve Bank’s Monetary Committee met to discuss the current interest rates late last week.  A decision was made, to accommodate the lethargic economy, that the repurchase or repo rate will remain at 6.5%. In turn, the prime overdraft rate will also maintain at 10%. This is good news for homeowners as the prime overdraft rate determines the interest rate on home loans and commercial bank lending.

The SARB Monetary Committee commented on interest rates in South Africa over the last 25 years, which have averaged at 12.58%, reaching the highest in 1998 of 23.99% and the lowest of 5% in 2012.  A lending rate of 10% provides an opportunity for investment at the moment, especially since the banks and bond originators in South Africa are still showing a willingness to lend regardless of a lackluster economy. Unchanged interest rates also mean that homeowners should be able to maintain current bond repayments.

“We welcome the news that interest rates will be maintained and not add to the already burdened consumer,” said Sandy Walsh, MD of Property.CoZa. Walsh added that the market is certainly leaning in favour of the buyer, considering the current stock of properties. “There may be slow price growth and prices will inevitably have to be lowered, leading to a healthy willingness from the banks to lend”.

Nevertheless, the current situation leaves room for sellers to make a choice to sell now instead of sitting on the fence or waiting for unrealistic offers. The market will most likely remain in over supply for the remainder of 2018 and into 2019. While the interest rate remains low, the option to sell may become more appropriate.

July 3, 2019