Blog by Rode

The South African government recently sold the first inflation-indexed long bond. Bids ranged from 10% to 5%, and only a small amount of nearly R500 million of the R189 – maturing in 2013 – was allotted at the cut-off price of 6,5%.

The government’s announcement of the introduction of capital gains tax (CGT) as from next year will have a profound impact on the way investors behave. This includes the property market.

Some investors grow up believing religiously in the infallibility of bricks and mortar as an investment class, others will never be convinced. It may have a lot to do with one’s risk profile and degree of ignorance.

Those of us who were brought up in an inflationary environment thought that this was how the world normally functions. Not so. The history of the world’s major economies shows that through the ages the normal state of affairs has been no or little inflation.

It is common knowledge that throughout the 1990s house prices in South Africa did not keep up with consumer inflation. The exception of course was your favourite metropolis, Cape Town, which bucked this trend quite dramatically.

Since timing is so crucial for property investments, it is worth dwelling on the property cycle, and where we are in this cycle.

When buying a property, location is not nearly as important as timing. This seems to fly in the face of conventional wisdom, so I better explain myself swiftly before the lynch mob gets the upper hand…

The normal short-term factors that drive house-price inflation are economic growth (real growth in disposable household income) and interest rates, as both affect affordability

The following report appeared on 16 March 2019 in the English version of the Greek newspaper Kathimerini.

The house market is not a global market like commodity markets. Thus, if house prices in Cape Town are cheap relative to Melbourne, potential buyers of houses in Melbourne do not flock to Cape Town, thereby pushing up prices in Cape Town.

Investing in flats used to have the advantage that vacancies were as a rule extremely low. Not anymore.

The Cape Town-based company received a total of six Diamond Arrow awards, representing 1st overall in each of six categories. In a seventh category it achieved a Golden Arrow award.

Following its recent annual national survey on property valuers in South Africa, PMR.Africa has recognised Cape Town-based property valuers Rode & Associates with seven awards, including the coveted Diamond Arrow Award (1st overall) in four categories.

Worldwide, the tertiary or services sector of the economy — manned to a large extent by knowledge workers — is growing much faster than the manufacturing of goods (secondary sector) and the production of raw materials in the primary sector (agriculture and mining).

Erwin Rode and Berchtwald Rode contemplate the last two 5-year Spatial Development Frameworks (SDFs) of the City of Cape Town and identify differences in the approach to spatial planning.

Erwin Rode contemplates the law of unintended consequences when inclusionary programmes are introduced in SA and comes up with some practical suggestions

Amidst serious political turmoil, the South African property market ended 2017 on a better footing, with industrial property and flat rentals managing to outpace inflation.

Readers of the coming Rode’s Report may notice that the publication no longer includes “location” as a determinant of grading.

Since 2015, Cape Town flat rentals have been outperforming their peers strongly, but are taking a breather for now, only growing by 4% over the past year.

Despite of the poor performance of industrial stand values in the country overall, due to declining economic confidence, those in the East Rand and Cape Peninsula still managed to enjoy real growth in the second quarter of 2017.