Page 13 - KZN Buisiness Sense - Page One - Susan Abro

POTENTIAL POLICY

SHIFTS FOR PROPERTY

SECTOR

TYSON PROPERTIES ADVISES PROPERTY OWNERS

TO KEEP A WATCHING BRIEF THROUGHOUT 2026

ight now, South Africa Tyson warns that this will amount and using the remainder
is entering an extremely however put pressure on to build up a savings fund on the
Rinteresting time for the consumers to closely guard side for tougher time, he advises.
property sector. Whether buying their credit health – bearing 3. LOCAL GOVERNMENT
or selling the family home or in mind that, on a R2-million LEVERAGE Perched high on Higgo Crescent, 36 Higgo is an ultra-exclusive six-residence
luxury development in the heart of Higgovale, one of Cape Town’s most
snapping up a bargain buy bond, banks pocket at least prestigious addresses.
for rental, those expecting to R300 000 for every 1% in With the local government
make substantial investments additional interest that they elections looming and pressure
in property need to be aware charge. With banks already building on municipalities
of some key potential policy under the watchful eye of the to get their houses in order,
shifts as they move on to or even Competition Commission for this will have important
further up the so-called property alleged potential price fixing, consequences for property
ladder, advises Tyson Properties the role of credit risk and the owners, according to Tyson.
founder and CEO, Chris Tyson. cost of lending will play a greater The most obvious implication
role in negotiations with lenders is that property values are
He has identified three key going forward and pave the way
areas as potential game changers: for better deals for first time closely impacted by local
authorities’ abilities to provide
1. SCRAPPING THE PRIME borrowers. For those already services and ensure the health
RATE: paying off a mortgage, little is of local infrastructure. Constant
Reserve Bank governor Lesetja likely to change. outages – especially when it
Kganyago’s announcement in 2. THE INFLATION FACTOR comes to water – tend to put
Davos that it was looking into Tyson adds that, what is downward pressure on property
scrapping or restructuring the potentially even more significant prices, leaving the better
prime lending rate in order to in the shorter term is how the performing municipalities in
modernise the financial system Reserve Bank’s new 3% inflation the Western Cape leading the First time on the market after many loved years in this beautiful home, this elegant
suggests a major realignment goal beds down during 2026 charge in this area. colonial property is set on 450 hectares on the Bosch Hoek estate in Balgowan
which is encouraging but as this will determine further However, President Cyril offering an unparalleled lifestyle.
probably less cataclysmic than interest rate cuts throughout the Ramphosa’s announcement
the uninitiated might think. rest of the year. during SONA that a white
paper that will look at the
In short, the announcement “It is this that will revive the
surrounding the longevity of the market and give both existing structure of local authorities
prime rate did not stipulate the and new homeowners ongoing and potentially eliminate small
timing and talks to an ongoing relief. Towards the end of last dysfunctional authorities
investigation that could take a year, inflation edged above that have neither the funding
year or more. the Reserve Bank’s 3% new nor the skills to meet their
obligations is just months away
target which explains the pause
The prime rate – which is and could be a game changer.
10.25% following an interest rate in interest rate cuts at the
cut in November last year – has beginning of the year. If all goes The same goes for the ongoing
well, inflation is expected to level drive to ring fence revenues
been the benchmark for the rate so that, instead of putting
that banks offer clients since off during the latter half of 2026 ratepayers’ payments into a
sparking at least two further
2001, reflecting the addition cuts,” he says. single pot for general usage,
of a standard 3.5% to the base specific payments will go to the
rate offered by the central bank. However, even this entails relevant areas. So, for example,
When applying for a home loan, some crystal ball gazing and, water revenue will be used for
clients are offered a rate that if the positive factors that have upgrading and maintaining only This East London property boasts a large, open living area that features a stunning
centres on the prime rate and is lent government some leeway water related infrastructure – a kitchen, a dining area, a lounge, and a built-in bar, all with breathtaking views of
Glengariff and Yellow Sands bays.
then adjusted depending on the on reducing debt and improving move that will yield positive
cost of funding, risk appetite and fiscal governance lose their edge, outcomes in this department.
creditworthiness. there’s the possibility of inflation
inching upwards and out of the The flip side, however, is
“Doing away with the prime range for further relief. that all households need to
rate will increase competition factor in rates, electricity and
for loans between lenders and Increased geopolitical and water service increases when
see banks offering more market trade tensions could drive determining affordability. See
related options to potential something like the oil price these as part of your bond and
clients. This comes at a time higher – with an obvious budget for them year-on-year,
when there is evidence of greater negative impact on inflation Tyson suggests. 
demand for home loans as well and household disposable
as greater enthusiasm on the part income. For this reason,
of financial institutions to lend. Tyson always advises buyers to W: www.tysonprop.co.za
create a contingency fund or
However, in itself, scrapping buffer when setting affordable
the prime rate will not materially mortgage repayments.
impact the cost of existing debt.
Instead banks will compete more Work on a worst-case scenario
for loan business using more and save by either by overpaying
market related and transparent your bond when times are This luxurious beachfront apartment located in Umhlanga offers stunning
breaker views and direct sea access, creating a private oasis where the ocean
prices going forward,” he says. good or by paying the required breeze is palpable.

13