Tag Archives: homeowners

Eskom delays revealing it's tariff increase.

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Homeowners may be in for another shocking surprise when Eskom eventually reveals it’s price increase application to Nersa (National Energy Regulator of South Africa).

It has delayed it’s application and is saying that it is because of factors such as the magnitude of the world financial crisis and the approval by Cabinet of the Electricity Pricing Policy. According to Eskom these factors were not fully taken into account and the company now feels a review of their application is in order.

Last year homeowners felt the punch when some ended up paying almost double for their electricity after a monumental price increase by Eskom that was implemented to generate funds to improve on service delivery. After just being an accepted fact of life for decades that was generally ignored by the consumer Eskom has been in the headlines innumerable times in last three years. Unfortunately most of the attention was negative.

South Africa was spoiled by having a cheap electricity that was readily available from a company we could mostly ignore. While that is probably a selfish statement I bet most South Africans yearn for the days where we couldn’t remember the name of the company providing our electricity.

Hopefully the delay does not mean another huge price increase, many homeowners just can’t afford it.

An update on the average time a property remains on the market.

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According to FNB’s latest Residential Property Barometer, released on Monday, there may be bad news for home owners hoping for quick sale.

According to the figures released, currently the average time it is taking for a property to sell is 15 weeks and 3 days or almost 5 months. However this is still vastly better when compared to 20 weeks and 1 day which is what it peaked at. Although the time frame has improved it probably also points to most sellers not getting their asking price.

We will have to wait and see what the Tito Mboweni does with the interest rate in the coming months to get a better idea of what homeowners can expect this year and the year to come. The interest rate will influence many homeowners in many ways whether it goes up or down.

Pay more now and save alot in the end.

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Many people who want to save alot of money over the long term will opt to keep paying their higher bond repayments instead of taking advantage of the recent interest rate cuts and those that are likely to follow as the year progresses.

By paying more than your monthly minimum you could save yourself hundreds of thousands of rands in interest over the term of your bond.Besides that you could also shorten the length of your bond. This is good news to most of us, as none of us want to be tied down financially for all eternity.

Some homeowners are however not in a position to continue paying such a high bond and really need the financial relief the rate cuts can bring. But for those homeowners who have become used to paying the higher payment or if you suspect you could pay a bit extra it would be a great idea to check with your lender and ask them to assess how much you would save in the long run by paying a little bit extra each month.

Always check with a qualified professional before making any decisions that could drastically affect  your life.

Homeowners may have to wait even longer for relief.

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We were all expecting some positive news for South African homeowners at least mid-way through 2009.Apparently we will not see any improvement in house price growth until 2010.This was the prediction put forward by FNB property strategist John Loos,speaking from Johannesburg.

He made this prediction because although rate cuts have and will still improve the situation this will be completely outweighed by general negative economic growth.

Many homeowners have formulated rescue plans for themselves under the assumption that the market would start to improve far sooner than the end of 2009.While many individuals may find that the interest rate cuts to come are enough to improve their own situation many more will still face the prospect of selling into negative equity or having their home taken into possession by the lender if they can’t make their payments.

What many people haven’t realised is that it is far better to formulate an exit plan well in advance than to see the crash coming and have no parachute.If you foresee your future happiness slipping away because of the current market slump do something about it now.We all know how long anything to do with property takes,it could be months before you even get the right advice.

If you are the parent of older children, and it’s a realistic option, why not ask them to move back in with you for a while.The combined finances would surely lessen the strain on all parties.Provided you get on well with your kids.

If you suspect you may face financial problems in the future, whatever you do, don’t wait until the last minute to review your options.Start thinking out of the box and may find a great solution.

Seller's on the losing end.

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House prices have fallen by 2.5% y/y in October.This is in keeping with the current depressed trend the property market is in.There are many factors contributing to this,some of which are the high rate of inflation and interest rates.

Another major factor is of course the affordability of buying a home,everything has just become so expensive.We all go on about having no disposable income,and in reality the effects thereof are great.The increasing cost of food and fuel eat away at our ability to afford the home of our dreams.The current repo rate of 12% doesn’t help matters either.Although i suppose that’s all basically the same thing anyway.

The homeowners wishing or needing to sell at the moment have basically no negotiating power.It is a buyer’s market and they are driving prices down.It’s all about supply and demand and at the moment the buyers are the item in demand.So for those who can afford to buy there are probably some great deals out there.

Most experts are also only predicting a real turnaround towards the end of 2009,after the interest rate has been cut a couple of times and households have had a chance to re-evaluate their financial situation.However we also all know that what one expert says today can be entirely contradicted by another expert the very next day.

So we are left with an unclear idea of exactly when things will turn around,but it also can’t stay this way forever.