Property News - February 2008
Welcome to our property investment newsletter, the aim of which is to keep you up to date and informed as to the most recent property trends.
This month, we would like to draw your special attention to our 4th article entitled “Legal Talk” in which conveyancing firm STBB – Smith Tabata Buchanan Boyes give expert advice and clarity on the topic of Capital Gains Tax in Relation to South African Property.
In our featured property slot we have a United Kingdom buy-to-let property investment package as well as a 4 star upmarket guest house that overlooks one of South Africa’s most beautiful beaches. Full investment reports can be provided on request.
If we could point to one issue which dominates all others in the UK housing market, and especially the English market, it is that we do not have enough houses to meet demand. There are many reasons we can point to: family break up, increased life expectancy, immigration and rising wealth (which increases housing consumption through, for instance, more second homes). These factors have all fuelled demand, and over the past decade house building has simply not kept pace.
It has been believed for some time that retail property leads the commercial property cycle, and that it should thus be the first to cool, ahead of industrial and office space. Retail property experiences similar drivers to residential property, i.e. household disposable income and interest rates, which drive the rate of growth in consumer spending. In contrast, the drivers of industrial and warehouse space, as well as office space, are less consumer-specific and more related to the broad economy of which the consumer is only part.
According to the latest Absa House Price Index, nominal year-on-year (y/y) growth in house prices in the middle-segment of the market (see explanatory notes) slowed to a level of 11,2% in December 2007 (12,5% y/y in November), which brought the average price of a house to almost R964 000 at year-end. This was the lowest price growth since December 1999, when it was 9,3%. House prices were up by 14,5% in nominal terms in 2007 compared with 15,2% in 2006 and 22,6% in 2005.
When immovable property is disposed of, the seller becomes liable for the payment of Capital Gains Tax (“CGT”) on any profit made in respect of that property after 1 October 2001, which is the date on which the tax was first introduced in South Africa.
Aengus Property Holdings has more than quadrupled its number of inner city residential units to over 3 000, following rapid organic growth, plus the recent acquisition of the Softstone and Dunwell portfolios in a joint venture deal with listed property loan stock ApexHi Properties Ltd