select
|

Saving your bonus for your bond

The last two or three months have seen almost all international financial analysts revising their forecasts downwards for the next 12 months. 

The IMF (International Monetary Fund) predicts that the Asia-Pacific region will see a 1% fall off from its current levels, China’s economy, although still healthy, will slow by 0,3% to 7,3% (well below its previous high levels) and India will be down by 2% from its former rate of 5,8%.

Most importantly of all, the USA, which has always been the pace setter, will, it is now forecast, show only a 2,6% growth in 2014 (admittedly an improvement on its previous growth rate).

Globally, says the IMF, the expansion will be at a low 2,9% this year and 3,6% in 2014.

Doing the latest figures and discussing the outlook for South Africa, and in particular the South African residential sector, Tony Clarke, Managing Director of the Rawson Property Group, said that it has to be accepted that the South African economy will feel the impact of the global economy’s sluggish growth rate – and, he said, we should all budget accordingly.

“For some time now,” said Clarke, “middle class South Africans have been overindulging their liking for luxury, less important items, especially cars, clothes, furniture, household appliances and entertainment. This has had a disastrous effect on home financing – some 45% of bond applicants are rejected because investigation reveals that they have either defaulted on credit accounts or are committed to too much ‘extraneous’ expenditure. The net result is that far too many people are now reconciled to renting in perpetuity. The whole situation has to change if South Africa and its economy is to benefit.”

A good first step in a reform programme, said Clarke, would be to put all employee bonuses into bond or savings accounts this December. Some people, he said, will say that this could create a negative austerity atmosphere over the festive season, but that need not be the case.


“Good fellowship and happiness are not dependent on cash flow and high incomes. A move to cut back in a big way on spending could set the tone for many people for the whole of 2014 and would, I am convinced, lead to more peace of mind and more contentment all round.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK