The Interest in fractional ownership on the rise

General interest in fractional ownership in SA is on the rise, with interest from the UK, USA and Canada showing good growth.

“Month-on-month we are seeing higher numbers of unique visitors (separate individuals) entering our fractional ownership pages across all websites in The Fractional Network, which is now averaging 7,000 to 9,000 unique visitors per month. The number of visitors from the UK, USA and Canada is on the rise, and we are finding that visitors are really looking at many resorts, since the number of separate pages viewed during each person’s visit to our websites is also increasing, to about five pages per visit,” says Dirk Wilson of fractionalownership.co.za.

Wilson says consumers are shopping around to compare the three L’s – location, leisure amenities and luxury. In terms of price, he says that now more than ever before, fractional investors are seeking as many value-added benefits as they can, at the best possible price.

“Fractional investors are willing to pay less for the privilege of owning smaller blocks of time; subsequently, fractional promoters are releasing products that offer smaller (more flexible) usage periods in luxury fractional residences. Investors now have the option of purchasing two weeks as opposed to four weeks, naturally at a lower price per share. More promoters are offering 7, 14, 21 and 28 days’ usage per annum. Down the line fractional owners will be able to upgrade by purchasing more time in the same residence or resort, or in another resort offered by another promoter.

“It appears that the general consumer perception of a fractional ownership purchase is one of a direct real estate investment with lifestyle benefits such as usage, exchange and formal resale (or exit) agreements. Most consumers are also seeking substantial rental returns on unused time.”

Wilson says that although consumer interest is increasing, sales conversions are down, which he attributes to a number of factors, including fractional promoters withdrawing or advertising less, general uncertainty about investing in real estate due to economic pressures, lack of cash or access to specialised lending, as well as confusion between shared vacation ownership purchase options (timeshare, fractional, condos, private residence membership, destination and points clubs).

He says the landscape for fractional promoters is set to change through their adoption of a shared ownership body, as in the US market with ARDA (the American Resorts Development Association) and Europe with the RDO (Resort Development Organisation). The newly formed Vacation Ownership Association of South Africa (VOASA) now encompasses the various vacation ownership products (such as timeshare, fractional ownership and private residence clubs) under one umbrella organisation.

“We think that consumers will now be more informed as to the different shared ownership products available to them, and how they vary from one another. VOASA will take a major role in assisting and supporting the public here. This is timely, since another trend is that more and more resorts are offering timeshare, private residences, fractional, condos and whole ownership products, all on one site and managed by one hospitality operator.”

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Buying power does not equate to value

I’m amazed at how the smart people are not as smart as they think. I’m referring here to the prophets of doom and the economists who are telling the world how house prices are falling at the moment, and explaining how the prices of houses being sold now and the size of bonds being registered now compare to those that were sold or registered last year. One such clever bond originator, who is now providing “statistics” too, came to the educated conclusion that house prices have fallen by 5.5% since last year. And it isn’t just the smart bond originator who has come to this conclusion. The banks are doing the same, although at least they believe that property is still growing positively. You’re probably wondering why I am suggesting that this bunch is stupid, so let me explain.

FNB property barometer falls to 4,1

The FNB Property Barometer for the third quarter of 2008 declined to an average activity level of 4,1 – the lowest in the history of the Barometer – from a level of 4,4 in the second quarter, reflecting further weakening in demand activity levels as experienced by estate agents.

A further indication of the weakening trend is to be found in the average length of time that a home stays on the market before getting sold. From an average time of 14 weeks and 6 days in the second quarter, the average time frame shot to 20 weeks and 1 day in the most recent quarter, the survey, released on Monday, found.

Bond Originator Tricks

Recently it has been said than more and more bond originators are charging clients with extra costs, which is illegal. This shocked me as I realized then, that this is something that happens often in South Africa.

Anthony Smook, managing director of a mortgage loans said that, in the recent weeks he had come across three cases where origination consultants are invoicing clients for fees to obtain a bond for them.

Legally, the only way when a bond originator is able to charge their clients for extra fees, is when the bank is not paying any commission to the bond originator. The Bond Originator then has to put this into writing before he/she goes through with the application. If he does not then the applicant should demand to know why not.

So whenever you are applying for a home loan, be sure to ask the necessary questions to your bond originator so you don’t get ripped off like a lot of the other people out there.

If you need more questions on the subject you can contact SecuBond at 086 111 5024 ext 101

All you need to know about home equity loans

Home equity loans are wonderful if you have enough equity built up in your home that you can get a loan against the equity. Many people do not realize that a home equity loan is available to many homeowners. However, some take advantage of them and get one whenever they can qualify. It just really all depends on your home and the equity in it as to whether or not you may or may not qualify for one. There are many places that offer loans against the equity in your home, and you may or not be aware of them.

Reasons for a Home Equity Loan
There are so many reasons that you might want to take out a home equity loan. Maybe you need to do some home improvements around the house. On the other hand, perhaps you are ready to take that dream vacation that you have worked so hard for. Another reason that many take out a loan against the equity in their home is for debt consolidation. You will find that this is the most popular reason for this type of loan. Simply to be debt free. Taking out a loan and paying off your debt, so that you only have one single payment that is lower to pay every month is a great reason in itself.

How much will my loan be?
If you are like everyone else, chances are that you are wondering just how much of a loan you can get against the equity of your home. Well, that really all depends on the equity that you have built up in your home and how much of a loan you need. Maybe you do not need the full amount that you are offered, or perhaps you need a little more. Like stated earlier, this depends on the amount of equity as to how large or small the loan will be.

Where can I get a loan against the equity of my home?
Most banks or mortgage companies that offer second mortgages are known for home equity loans. Many of them will be willing to look at your information to in return give you the most for your equity that you have built up in your home.

Something to Keep in Mind
If you just bought your home, and you have not made many payments on it yet, then chances are you will not qualify for a loan against the equity in your home. The reason for this is you have to make payments for a while and give the equity a chance to build up. You cannot go and get a loan against the equity in the same day or month you start paying on your home. Simply because there is, no equity built up at that time. You should at least pay on your home for a few years before you try to qualify for this type of loan.

As you can see, the home equity loan is one that can help you out if you were to get in a bind. You can get one to consolidate your debt, or to just help financially.

The author is the owner of a mortgage site in South Africa. If you like to read more on home equity and debt consolidation you can visit securebonds.co.za

Article Source: http://EzineArticles.com/?expert=Dawie_Bester

50% Of home loans gets rejected last month

It seems like getting you home loan accepted in South Africa has just became much more difficult! Certain factors that contributes to this is of course the rising interest rates and the National credit act.

Bond Originator, ooba said that over 50% of the home loan applications were rejected by the banks last month (June 2008), up from just over 40% of applications made last year.

One should keep in mind that, while some applications gets rejected by certain banks, other banks does accept it sometimes. So it doesn’t mean that when one bank declines your application, other banks will not.

At the moment it looks like only FNB and Nedbank are still granting some 100% loans with other banks requiring deposits of between 10% and 20%.

South Africa’s house market is 10th best in the world

It has been reported that South Africa is still the 10^th best performing property market in the world. Last year, when South Africa was the sixth biggest property rising market in the world, it was at a rise of 13,6%. This year, we are placed, number 10 in the world with a property market rise of 8,8%.

However, South Africa’s is not the only country which has shown a decrease in inflation rising. Apparently some of the countries also mentioned here include the likes of the UK, Canada, New Zealand, and Norway.

Global house price inflation came to an average 6,1% in first quarter 2008, down from 9,8% last year.

How To Spot Mortgage Fraud?

A small white lie in real estate loan application constitutes mortgage fraud, and it’s certainly a big concern and with increasing fraudulent document registration by lenders, brokers or borrowers it becomes essential for both parties to escape themselves from going to be the next victim of mortgage fraud. False assess of the value of the property to inflate the lending amount or any kind of misrepresentations regarding income or employments are some common ones.

Taking a hard look of the incomplete mortgage loan, any penalty provisions, hidden cost, need of credit insurance, direct contact with lenders for deal verification or transaction are certain things that needs to be carefully considered prior to the execution of the mortgage deal.

It’s Crunch Time

South African consumers should brace themselves for possibly the toughest time in 10 years — and economists warn that it is likely to get a lot worse before it gets better.

Nine successive rate hikes, soaring fuel, food, electricity and water prices have taken their toll on a broad sweep of society — from the poorest to middle-class property owners, and even small businesses.

Fractional Ownership – A Rapidly Growing Industry In South Africa

Fractional Ownership – currently the hottest buzz word on everyone’s lips. This new asset sharing concept has recently caught the attention of a great amount of affluent holiday makers in South Africa. Holiday makers who have always wanted to invest in leisure property now have the perfect opportunity, not only is it a smart financial move but the management and maintenance is no longer a hassle.

The overall growth in leisure property has been so substantial over the past 5 years that it has virtually made it impossible for the average household to own property on a holiday resort. Fractional Ownership enables the average household to own a share of their dream holiday home at a fraction of the price. Everyone wants to enjoy the benefit of property ownership,especially in this favourable period of capital growth in the property market. Since June 2007 over 40 intermediaries have applied for membership with SAAFI (The South African Association of Fractional Ownership), a regulatory body that was established with the objective to protect the interests of the general public. This is not supprising when taking into account that a foreign family can now enjoy property ownership in South Africa and utilise their investment 4 weeks per year, who knows how many foreigners will find this joint ownership model attractive upon their visit to South Africa during the 2010 FIFA World Cup Tournament. Fractional Ownership is currently the world’s fastest growing property sector and has grown by more than 150%,year on year for the last 3 years in the U.S.A alone

The website http://www.fractionalownership.co.za reports that it has experienced an increase of 200% in traffic on the portal since last year. We are looking forward to see this new real estate ownership structure establish itself on the shores of South Africa.

Article Source: http://EzineArticles.com/?expert=Werner_Geyser