Weekly News - 26 January 2009

CONTENTS
1. NEW RELEASE DEVELOPMENTS
2. NEW RELEASE PROPERTY
3. PROPERTY OUTPERFORMS EQUITY
4. WHY A 100 POINT RATE CUT IS VITAL

NEW RELEASE DEVELOPMENTS
MOSSEL BAY

VILLA ITALIA

3 Interior options to choose from. Solar & LP gas, low cost living, quality finishes, only 66 units in this secure apartment development, close to shopping malls, low levies, lock up garages, sea views.

From R439 000
ID3880

ROBERTSON

BERGZICHT SECURITY VILLAGE

Buy now and only pay in July 2010 - The ideal investment opportunity in the heart of the Cape Winelands.

Invest in this lifestyle estate within that country atmosphere and tranquillity of the valley of wine, horses and roses. Nestled on the picturesque hillside of the Langeberge mountains in Robertson, it offers the supreme beauty and tranquil country living on the famous Route 62. More.....

From R299 000
ID3881

NEW RELEASE PROPERTY

HEROLDS BAY

OCEAN VIEW MANSHION

A jewel with breath-taking ocean views. 3 Living areas, BBQ area, large patio with 2 swimming pools, jacuzzi, wine cellar, 4 bedrooms en-suite, kitchen, laundry, 2 garages and a 1 bedroom flat, private and ideal for guests.

R5 300 000
ID3883

GLENTANA

LUXURY BEACH-FRONT HOME

Up market beach front home with quality finishes throughout. Doulble volume with 4 living areas, open plan kitchen, laundry, 4 bedrooms en-suite, 3 garages and a luxury 1 bedroom apartment with Cherry wood kitchen and garage.

R7 500 000
ID3887

GEORGE - GLEN BARRIE

LARGE - SPACIOUS PRIVATE HOME

Situated in a quiet street, with private garden, swimming pool, covered BBQ area, 3 living areas, kitchen, laundry, 4 bedrooms, 3 bathrooms, study, pantry, 2 garages and a 1 bedroom flat with lounge and kitchen.

R2 050 000
ID3878

PROPERTY OUTPERFORMS EQUITY

SA-listed property outperformed SA equities by an impressive 18% when measuring total returns.
South African listed property stocks continued to outperform local equities during 2008, despite the downturn in global financial markets and the sector’s impressive resilience is set to continue in 2009.

Norbert Sasse, Chairman of the Property Loan Stock Association of SA (PLSA) and CEO of South Africa’s largest listed property company Growthpoint Properties Limited notes that many analysts advocate property’s defensive qualities in turbulent markets. "The resilience of South African listed property stocks in the current climate may well be evidence of the defensive quality of South African listed property,” says Sasse.

“The higher returns of SA property coincided with lower volatility in prices resulting in even-better outperformance on a risk-adjusted basis,” explains analyst Leon Allison of Macquarie First South Securities. Allison explains that a low foreign shareholding is also a contributing factor to the lower price volatility.

“The sector’s strong performance was driven by sharply lower bond yields since July, continued growth in distributions, relatively good visibility and near-certain double-digit yields underpinning its defensiveness,” says Allison. However, returns in hard currencies were less impressive due to the weaker ZAR.

WHY A 100 POINT RATE CUT IS VITAL

The South African Reserve Bank should take the bold step of reducing the repo rate by a full 100 basis points next month when its Monetary Policy Committee meets.

"If the Reserve Bank were to cut the interest rates by 100 basis points when it meets on 11 February, it would have the effect of stimulating the market for home buyers. It would represent the best news in years for home buyers."

If the Reserve Bank does cut interest rates by 100 basis points in February, it will mean a drop of nearly R1k per month in bond repayments per Rim bond held.

South Africa has undergone a two-year cycle of rising interest rates which have put homeowners under significant pressure. The repo rate, the rate at which the Reserve Bank lends money to commercial banks, peaked at 12% in August before finally being cut by 50 basis points in December. It is now 11,5%, with prime at 15%.

"The near halving of the petrol price and the sharp drop in inflation, except for food inflation, have given the bank all the reasons it needs to make meaningful inroads into the interest rate,"

"Other countries in developing markets, such as Australia and Thailand, have been aggressive in cutting interest rates, and right now it would be the best possible move for the local economy.

"It would also slow down the destructive cycle of bank repossessions and encourage more people to enter the property market,"