Information about South Africa

  




Introduction
Regional Locations
The buying Process
Legal Issues to Consider
Financing a property purchase
Investment Potential
Economy
Education
Health



Introduction:

South Africa is located on the southern most point of the African continent; its coastline stretches more than 2500 kilometres from the western Atlantic Ocean coast around to the Indian Ocean on the east. South Africa is approximately 1.2 million square kilometres in size, and it measures some 1 600km from north to south and approximately the same from west to east.

 

South Africa has some of the best weather in the world even though its climate varies considerably across its various regions and environments. Temperatures remain comfortable throughout most of the year, although they can increase dramatically during the peak summer months of December, January and February.

 

Geographically South Africa is surrounded by Namibia in the northwest, Zimbabwe and Botswana in the north, and Mozambique and Swaziland in the northeast. The southernmost point of Africa is Cape Agulhas and is located in the Western Cape 161 kilometres southeast of the Cape of Good Hope.

 

South Africa is famous for its sunshine. It's a relatively dry country, with an average annual rainfall of about 464mm. While the Western Cape gets most of its rainfall in winter, the rest of the country is generally a summer-rainfall region.

 

At the same time, temperatures in South Africa tend to be lower than in other countries at similar latitudes - such as Australia - due mainly to greater elevation above sea level.

                                                
                     



Regional Locations:

Gauteng

 

Gauteng is the financial and economic hub of South Africa, with a population of just short of 10 million people and still growing, it contributes a staggering 58 % of South Africa's overall Annual Gross Domestic Product.

 

Gauteng can also be described as one of the African Continents power houses, when considering the size of the city which occupies a minuscule 1.4% of South Africa's land area it seems almost unreal that its GDP alone contributes to roughly 35% of the entire African continent collectively.

 

 

Kwazulu-Natal

 

Known as the Zulu Kingdom, Kwazulu-Natal is situated on the east coast of Southern Africa. Kwazulu-Natal offers any visitor an interaction of spectacular wonders, modern facilities, fascinating cultures and a rich history. Much of the landscape in Kwazulu-Natal is beautiful and breathtaking.

 

Kwazulu-Natal is home to some of the best beaches in the world, golden stretches of sand as far as the eye can see coupled together with an ocean that is warm and inviting makes this area one of the most sort after and naturally beautifully areas in the world.

 

Majority of the main beaches along the east coast have shark nets and patrolled from sunrise to sunset by trained lifeguards. Nearly all beaches have change and shower facilities as well as an array of restaurants and bars.

 

 

Western Cape

 

The Western Cape is bordered by the Northern Cape, the Eastern Cape, the Indian Ocean and the Atlantic Ocean. The area of the Western Cape is roughly equivalent in size to England covering a surface area of approximately 130,000 square Kilometres. International and domestic tourism has continued to drive the Western Cape economy.

 

Like much of Cape Town, the Western Cape offers a combination of breathtaking mountains, beaches, sea, rivers and wonderful climate. Beaches and Golf courses are among some of the best in the world. It is no surprise that Cape Town has been voted one of the top international destinations in the world.

 

 

Eastern Cape

 

The Eastern Cape is a province located in the Eastern region of the Cape in South Africa. The Eastern Cape became an independent province in 1994 bringing together the surrounding homelands of Ciskei and Transkei with a portion of the Cape Province.

 

Eastern Cape weather can be quite diverse and gets progressively wetter the further east you move, or as you move further away from the Karoo. Generally, this area of the country has frosty winters and hot summers. The East Coast of Eastern Cape is predominantly rugged and mountainous but also incorporates grasslands and areas of thick forestation.

 

Famous South African's born in the Eastern Cape include Nelson Mandela, Thabo Mbeki and Steve Biko.

 

 

Northern Cape

 

The Northern Cape is the largest province in South Africa, covering a surface area equivalent to that of Germany, it is has a tiny population with towns that are situated far apart.

 

The capital of the Northern Cape is Kimberly which is well known as a mining district. Kimberly played a huge part in South Africa's economy with the discovery of Diamonds in the late 1800's. Visitors today can still see and experience the extent of this mining as a huge open-pit mine still exists and marks the largest hole excavated by hand in the whole world - known as the Kimberley Hole.

 

Like the Eastern Cape, the Western Cape also gets wetter and greener as you move from West to East. Summers in this region are hot with temperatures often averaging out in the mid to high 30's, and winters are cold where temperatures can fall below - 10 degrees Celsius.   

 

 

Garden Route

 

The Garden Route includes one of the most beautiful stretches of coastline in South Africa, stretching a distance of nearly 200 kilometres via George, Wilderness, Sedgefield, Knysna and Plettenberg Bay. The Garden Route enjoys a Mediterranean climate with warm summers and mild winters and is popular among locals, South Africans and foreigners.

The buying Process:

 

The biggest single investment most individuals will ever make is the purchase of a home. As such, buying a home is both exciting and fraught with anxiety. It is, therefore, only natural that the homebuyer should look for qualified advice during the purchasing and mortgage registration processes. Whether you are a first time buyer, or contemplating a second home or investment property, you probably have some pertinent questions about the processes involved.

 

This section is designed to answer some of those questions and improve your home buying experience.

 

The home buying and financing process for South Africa will often depend on your individual circumstances. Non residents for example can only obtain mortgages up to 50% of the property value.

 

Purchasing a home and obtaining a mortgage can be a stressful and lengthy process. It helps to know the processes and parties involved and the steps required for bond registration.


Parties involved:

• Seller
• Estate Agent
• Buyer
• Mortgage Broker
• Transferring Attorney (appointed by seller to transfer the property to the buyer's name)
• Mortgage Attorney (appointed by the bank granting the bond)
• Cancellation Attorney (appointed by the bank cancelling the mortgage of the seller)

 

The bottom three transactions can be performed by a single attorney, but often there are at least two different attorneys involved.

 

Initiating the purchase

 

The buyer and the seller negotiate and sign an Offer to Purchase (OTP). The OTP, or Agreement of Sale, sets out the specific terms of the agreement between the two parties including details such as purchase price, deposit, date of transfer, occupational rental, etc.

Mortgage bond application


The buyer, usually through the services of a mortgage broker, applies for a bond with various lenders. There are four basic stages to the bond application process:


• Submission - the mortgage broker submits your application to various lenders
• Approval in Principle - the bank approves the loan subject to a property valuation and sometimes with other conditions attached
• Valuation - the valuation takes place either physically or through computer aggregates based property description and recent sales in the area
• Final Approval - the bank officially grants the loan
• The application usually takes between three and seven working days.

 

Bond Approval

Once all, or some, of the lenders who received the application have approved the loan, the client will choose which lender they wish to do business with. The financing bank will then instruct the relevant Bond Attorney to proceed with the bond registration process. This can take up to three days. The mortgage broker will cancel the application at the other lenders.

 

Property Transfer

The seller advises the Transferring Attorney to transfer the property into the buyer's name. The title deed and cancellation figures are requested from the bank that currently has a bond (mortgage) over the property (if applicable). A statement of rates and taxes is requested from the local authority.

 

Bond Attorney contacts Transferring Attorney

The Bond (Mortgage) Attorney advises the Transferring Attorney of the amount available for guarantees and requests the draft deed of transfer and guarantee requirements.

 

Cancellation Attorney

The Cancellation Attorney is requested to cancel the seller's bond upon receipt of a guarantee for the amount owing.

 

Transferring Attorney

The transferring Attorney receives the title deed and cancellation figures and sends a copy of the deed of transfer and the guarantee requirements to the Bond Attorney. The Transferring Attorney requests that the buyer and seller sign the transfer documents. The buyer pays the transfer costs and the Transferring Attorney then pays the rates and taxes and the transfer duty.

 

Bond Attorney

The Bond Attorney prepares the bond documentation and the relevant account. The buyer signs the documents and pays the costs. The Bond Attorney prepares and issues the necessary guarantees, forwards them to the Transferring Attorney and prepares the bond documents for lodgement with the Deeds Office.

 

Transferring Attorney

Once the Transferring Attorney has received the guarantees, they are forwarded to the Cancellation Attorney. 

 

Cancellation Attorney

The Cancellation Attorney obtains consent for bond cancellation from the bank which holds the seller's bond.

 

Documents prepared for the Deeds Office

After all the documentation has been signed and the costs paid, the transfer, new bond and bond cancellation documents are prepared by the respective attorneys for lodgement in the deeds office.

 

Deeds Office

All the documents are lodged in the Deeds Office by arrangement with the attorneys concerned. The Deeds Office takes approximately 2 - 3 weeks to check the documents before they are ready for registration by all the attorneys on the same day.

 

Bank pays out the loan

On the day of registration, the bank pays out the loan in accordance with the guarantees issued. Allow at least 3 months for the registration and transfer of the bond.

 

Legal Issues to Consider:


Fees and Taxes


• Solicitor Fees are approximately 2%.
• Transfer Tax is calculated on a sliding scale, the first R 150,000.00 is exempt and ranges from 5% and 8%.
• A flat rate of 10% applies when buying through a company.
• Estate Agent Fees vary but generally range between 4% and 5% and are paid by the seller.
• The UK and South Africa have a Double Taxation Treaty meaning tax is only liable in one country.
• Capital Gains Tax is 25% for individuals and 50% for companies; however the first R1 Million is exempt if the property in question is a primary residence.
• Income Tax is payable on earned rental income.

 

Financing a property purchase: 

BondExcel is a national mortgage originator with branded associates in every major centre in South Africa and over 100 associates in total countrywide.

 

In September 2007, The Excel Group was acquired by Finbond Limited, and the acquisition opened many exciting opportunities for all the companies involved. The BondExcel acquisition brought to Finbond 75 independent business units, 180 agencies and over 800 independent mortgage brokers countrywide.

 

The acquisition also ensured Finbond's fourth position in the mortgage origination market with volumes in excess of R1.6bn per month (R19 billion annually) in new homeloans generated for the four major South African banks.

 

In total, it is estimated the Bond Choice Group, including Finbond Limited, accounts for 22% market share of South African mortgage sales.

 

Buying a home can be a daunting experience, but with the experience and expertise of the BondExcel Community, you can rest assured that you will get the right homeloan solution for your needs.


BondExcel Associates all over the country offers:

• In-depth knowledge of the bank's systems and procedures
• Expertise in structuring homeloans for approval
• Thorough understanding of the different bank's offerings
• Advice regarding the best long-term option for individual circumstances
• Excellent, fast service, backed up by state-of-the-art IT systems

 

Looking for a Homeloan in South Africa - Click Here



Investment Potential:

South Africa offers outstanding property investment opportunities at excellent prices. Increasing numbers of foreign buyers are being drawn to its sunny weather, stunning beauty, and modern infrastructure and facilities.

South African property prices have seen remarkable growth in recent years, the best in the world according to The Economist's house price indices. It is particularly positive that this growth has been driven by domestic demand rather than foreign investment as it is more sustainable.

South Africa is at an exciting stage of development, with confidence in the country running high both among citizens and in the international community. South African property is seen as an excellent investment.

Reasons for this include personal tax relief, lower property transfer duties, growth in household disposable income, strong domestic demand for housing, a rapidly growing middle class in previously disadvantaged communities, and continuing foreign demand as well as high interest rates on deposits.

According to Mortgage SA, South Africa has one of the best deeds registration systems worldwide, with an exceptional degree of accuracy and of tenure being granted.

Since the start of 2005 South Africa has received a great deal of good press in the UK media. Holiday and homes abroad magazines have included extensive editorials on the property market in South Africa. There is a very positive sentiment that surrounds South Africa at the moment.

The latest Absa index of SA house prices reported strong growth, forecast to continue.

Foreign buyers invest primarily as a result of lifestyle, climate, type and size of property and cost of living. But equally important is the interest rate environment, stability of exchange rates and consistent growth in property values. These are draw cards to foreign investors, and should also be seen as such by South Africans.

Economy:

South Africa's Economy

 

 

South Africa has a world-class, modern infrastructure including a sophisticated transport system, low-cost and widely available energy, and sophisticated telecommunications facilities.

The economy displays a sophisticated financial and physical infrastructure, with one of the top 10 stock exchanges in the world.

The travel and tourism industry is a major contributor to the economy, accounting for 8.2% of GDP. Tourism is also South Africa's third-largest foreign exchange earner and job creator.

South Africa is the world's biggest producer of gold and platinum and a leading producer of base metals and coal. It also has the fourth largest diamond industry in the world.

Education:

The national Department of Education is responsible for education across the country as a whole, while each of the nine provinces has its own education department.

 

The central government provides a national framework for school policy, but administrative responsibility lies with provinces.

 

The national Department of Education is also responsible for higher education. Private schools and higher education institutions have a fair amount of autonomy, but are expected to fall in line with certain government non-negotiables - no child may be excluded from a school on grounds of his or her race or religion, for example.

 

Higher Education and Training, or tertiary education, includes education for undergraduate and postgraduate degrees, certificates and diplomas, up to the level of the doctoral degree.

 

A matric endorsement is required for further study and the obtainment of a university degree, with a minimum of three subjects passed at the higher, rather than standard, grade, although some universities set additional academic requirements.

 

A standard school-leaving South African senior certificate is sufficient for technical qualifications and diplomas.

 

South Africa has a vibrant higher education sector, with more than a million students enrolled in the country's 24 state-funded tertiary institutions: 11 universities, five universities of technology, and six comprehensive institutions.

 

Like so much else in South Africa, the education system is characterised by diversity: schools and universities vary greatly in terms of quality, financial resources, culture and size.

Health:

South Africa's health system consists of a large public sector and a smaller but fast-growing private sector. Health care varies from the most basic primary health care, offered free by the state, to highly specialised hi-tech health services available in the private sector for those who can afford it.

 

The public sector is under-resourced and over-used, while the mushrooming private sector, run largely on commercial lines caters for middle and higher income earners who tend to be members of medical schemes - approximately 18% of the population. The private sector also attracts most of the country's health professionals.

 

Over the past few years the health sector has undergone vast changes to make it more equitable and accessible to the needy. Since 1994, more than 700 clinics have been built or upgraded, 2 298 clinics upgraded and given new equipment, and 125 new mobile clinics introduced. There are now more than 3 500 clinics in the public sector.

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