Q6 2016 CashPlus newsletter

 

27 May 2016,
Your Q2 2016 CashPlus Newsletter

In this months newsletter:

Latest CashPlus property market trends and growth forecasts

FNB Estate Agent Survey – Buy-to-let Home Buying

CashPlus Fees

CashPlus property market trends and growth forecasts.

According to the 9 May 2016 ABSA house price index, the average nominal price growth for small houses increased by 10.8 % y/y in March 2016 and by 12.4% in April 2016.

Real economic growth has been revised down to 0.6% for this year.

Interest rates have been hiked by a cumulative 75 basis points since the start of the year and further rate hikes are expected later this year if inflation remains above 6%. The current prime rate is at 10.5% and the CashPlus forecast for 2016 was to end the year at 10.75%.

The April CPI (Consumer Price Index) inflation rate declined from 6.3% to 6.2% in the previous month and it looks like stabilizing closer to the South African Reserve Banks upper inflation limit of 6%.

Against the background of trends in and the outlook for the economy, household finances and consumer confidence, ABSA is projecting nominal house price growth to slow down from 6,2% in 2015 to 4,7% this year.

The smaller housing segment is currently outperforming the other sectors and should easily reach the CashPlus growth projection of between 6 and 8% nominal growth this year.

FNB Estate Agent Survey – Buy-to-let Home Buying

https://blog.fnb.co.za/wp-content/uploads/2016/04/FNB-Property-Barometer_Buy_to_Let_Apr_2016.pdf

As a percentage of total home buying, buy-to-let purchases are estimated by survey respondents to have moved sideways, remaining unchanged on the previous quarter at 9% in the 1st quarter of 2016.

From a peak of 8.78% at the end of 2013, the FNB revised National Average Gross Yield has declined slightly to 8.48% by the final quarter of 2015.

Although not spectacular, gross yield combined with positive nominal growth (12.4% year on year for the smaller houses sector) is still a compelling business case for the CashPlus buy-to-let property investor, especially when compared to money market returns of less than 6% and the Johannesburg Stock Exchange growth of less than 2% year on year (26 May 16).

CashPlus Fees

The CashPlus Course fees for 2016 will remain at R 999 until further notice.

You can order the CashPlus Property Investment Course by logging in with your registered username and going to Buy Course on the website.

Remember to send me your CashPlus success stories and or course comments.

CashPlus greetings till next time!!!!

Mitch Brandt
CEO CashPlus Property Investments
Always buy below market value!!