Global housing on the mend - December 2009

Investors across the globe are starting to return to residential property markets, following what has arguably been one of the longest and strongest real estate slumps the world has ever seen.
The Knight Frank global house price index for third quarter 2009 released earlier this week shows that house prices are now rising in almost 70% of the locations tracked by the British property group, compared to less than 50% in second quarter 2009. Knight Frank compares house price movements in 42 countries.

Liam Bailey, head of residential research at Knight Frank, says although house prices in almost 60% of the countries included in the index are still lower than they were a year ago, most markets have now turned the corner.

Singapore reported the biggest quarterly jump in prices with growth of 15,2% in third quarter. That was followed by Hong Kong (6,3%), Canada (4,9%), Australia (4,2%) and New Zealand (4,2%). South Africa ranks as the sixth fastest growing housing market in Knight Frank's index, with prices up 3,8% in the three months to September 2009 (quarter-on-quarter).
The UK and US, two of the countries hardest hit by the credit crunch and global recession, are also back in positive growth territory with quarterly price increases of 3,7% and 3,2% respectively.

On an annual basis, Israel is now the world' fastest growing housing market with prices rising 13,7% in the year to September 2009. That was followed by Austria (9,7%), Malta (9,7%) and Switzerland (7%). South Africa ranks 15th in the annual growth stakes with prices up 1,3% over the 12-month period.

Dubai is the biggest loser, with prices sliding a massive -47% in third quarter 2009 year-on-year (y/y). There are also a few European countries where prices are still falling on the back of what appears to an oversupply of stock. These include Spain, Denmark and Ireland.

Bailey says Dubai's recent debt woes have no doubt dented investor confidence in that country. The problems now seen in Dubai's housing market underscore the fact that the global housing recovery will not necessarily be smooth sailing, says Bailey.

However, he believes that any further house price falls are likely to be corrections rather than the start of another round of drastic reductions.

Link

South Africa - Exchange controls: limits and red tape relaxed

PRETORIA - Treasury has announced several measures designed to reduce the administrative burden of exchange controls. The limits of some exchange controls have also been relaxed, allowing individuals and business more freedom to put money overseas.

The Mini-Budget Statement says that South Africa continues to welcome foreign direct investment and encourages local firms that wish to diversify offshore from a domestic base .

One of the proposed reforms is to increase the amount a company may invest offshore tenfold, from the current limit of R50m to R500m. For individuals, the foreign capital allowance has been increased from R2m to R4m. The single discretionary allowance has been increased from R500 000 to R750 000.

The following relaxations are proposed for business transactions:

SA companies will be allowed to invest in Southern African Development Community (SADC) member countries through offshore intermediaries. The relaxation excludes investment in member states that are part of the Common Monetary Area.

Increasing the current R50m limit for company applications to undertake outward investment to R500m. Applications below this limit will be processed by authorised dealers, subject to all existing criteria and reporting obligations.

Removing the 180-day rule requiring companies to convert their foreign exchange into rand. However, South African companies are still required to repatriate export proceeds to South Africa.

Doing away with the R250 000 limit on advance payments for imports.

Allowing South African companies to open foreign bank accounts for permissible purposes without prior approval, subject to reporting obligations.

Replacing the current paper-based monitoring system of exports (Form F178) with a more efficient electronic system in due course.

Treasury is also trying to boost foreign direct investment by relaxing borrowing restrictions for non-residents. It has abolished a rule which restricts borrowing for foreign direct investment by non-residents to a ratio of 3:1. According to this rule, non-residents must invest R1 for every R3 borrowed locally.

After it's abolishment, they will be able to finance 100% of their investment. However, the relaxation does not apply to emigrants, the acquisition of residential properties by non-residents, or any other financial transactions - such as portfolio investments, securities lending, hedging or repurchase agreements - by non residents. For these cases, the existing finance ratio of 1:1 still applies.

More announcements on these reforms will be provided in due course by the Reserve Bank, whose task is to police exchange controls.

2010 Soccer World Cup Rentals - Johannesburg

Current rental accommodation available in Johannesburg for the 2010 Football World Cup.

For more information, please click on links below:

- 2 Bedroom, 2 Bathroom @ R4000 per day

- 5 Bedroom, 3 bathroom @ R12 000 per day

- 4 Bedroom, 4 bathroom @ R12 000 per day

- 4 bedroom, 2 bathroom @ R12 000 per day

- 4 bedroom, 2 bathroom @ R8000 per day

- 1 bedroom, 1 bathroom @ R2000 per day

- 5 bedroom, 5 bathrooms @ R15 000 per day

- 3 bedroom, 2 bathrooms @ R6000 per day

- 2 bedroom, 2 bathroom @ R6000 per day

- 3 bedroom, 2 bathroom @ R7800 per day

- 1 bedroom, 1 bathroom @ R1800 per day

If you require any further info or if the properties above don't match your criteria, please drop me an e-mail at info@horizon-consultancy.com

It's property time!

The Reserve Bank has probably cut interest rates for the last time this year, which means it is time for cautious or hesitant home buyers to take the leap and enter the market, said Brian Falconer, CEO of Colliers Residential on Tuesday, in response to the decision by the bank's Monetary Policy Committee to hold the interest rate at seven percent.

Falconer said since December R3555 had been put back in the pockets of bondholders for each million loaned.

This had reduced pressure on homeowners and pumped billions back into the economy for discretionary spending rather than the servicing of debt.

"It is highly unlikely that this round of interest rate cuts will continue this year," said Falconer.

"We should view this decision as signalling the end of eight months of interest rate cuts, which means it won't get better, and potential investors should no longer continue to defer their entry into the property market. We don't see the market getting any easier than it is today."

Market has been sluggish

The market has been sluggish for more than a year since it became evident that South Africa was also entering the global recession triggered by the US subprime crisis.

Buyers have not found sellers, sellers have been unable to obtain the bonds they did two years ago, and the banks have been fearful to extend credit given that the cause of the recession was related to property credit, and due to the lack of liquidity in the market.

"There are very positive signs that the worst is over, so any further procrastination would be unwise," added Falconer.

We have noted that Standard Bank, for one, has relaxed its lending criteria, and at least one other bank is advancing 100 percent loans for low-end property."

Other positive signs, said Falconer, are:

Globally the word is that the worst of the recession is over.

- Several US banks are reporting high levels of profitability.

- Albeit with government incentives, such as the Cash for Clunkers initiative, the automotive market is starting to turn, both in the US and Europe.

- Inflation is declining to just outside the Reserve Bank's target range.

- The oil price is relatively low, but volatile and likely to start climbing ahead of a northern hemisphere winter.

- The rand has been strengthening ahead of the MTN-Bharti deal, and the gold price has surged through $1000 an ounce.

- South Africa's balance of payments remains positive, with inflows sufficient to finance the deficit on the current account.

- There have been positive reports locally and abroad that the property market is beginning to move.

- A number of market commentators have reported significant economic recovery in a number of South African provinces.

Against this, said Falconer, are a few negatives.

The toxic debts behind the subprime crisis have yet to work their way through the system, so a number of economic commentators have predicted what is known as a "U-shaped bounce", where the recovery is short-lived as the economic fundamentals have not changed.

"However, whatever the individual indicators, we are confident the worst of the property market is over," said Falconer.

"If you continue to be uncertain or concerned, you could be missing out. It's time to get back into the market."

I-Net Bridge

Rolling with the punches......

A few months ago the subject of property was the latest buzzword around any braai or lunchtime table. Every person from the local dominee to the gardener wanted to get on into the action & when this was before the New Credit ACT (NCA) many people did.

But then ask yourself the question: When the gardener has 5 properties & he gives you advice on how to sublet your flat in Clifton, shouldn’t you think twice?

And then out of the blue, the NCA is introduced, bank credit dries up & invariably property growth goes into decline. Couple this with an increase in interest rates by a staggering 30% with rental income remaining constant, and you suddenly have a situation where buy-to-let has swine flu & you cannot get rid of it soon enough. And to top it all, we currently sit in a recession which is like the Boks losing to England………it affect all of us!!

So who in their right mind is going to look at property when they’re living day to day?

Here’s some food for thought on why real investors would consider buying in a tough market:

1) In property, you make your money when you buy:

The whole point of property is to buy so that your rental income covers the mortgage pay. And where does the rental income come from? The tenant! So look at what your tenant wants first, then go out and buy the property. You wouldn’t buy a property in De Aar & then expect tenants to fall over themselves wanting to sign the rental contract. (No offence to the people from De Aar, but rental demand might prove to be a little stronger in Joburg or Cape Town)

2) More interest rate reductions, more breathing space for the Landlord:

Since December 08, there has been a cumulative decrease of 4.5% in the interest rates. On a R1m property, this decrease is a saving of more than three thousand Rand per month! So more cash for the owner, means less chance of having to increase the rent which in turn decreases the chances of the tenant of leaving.

3) Property is a good investment – if you have the patience for it:

My personal strategy is to buy property, and never sell. The reason for this is the replacement cost of selling and then having to buy a similar or better property is very rarely achieved. You also have to factor in capital gains tax when you sell & if SARS decides you were speculating, you have to hand over 40% of what you made from the transaction. Building Materials & Labour also keep increasing, so an equivalent property will only get smaller, thereby decreasing the rental which in turn affects your bottom line.

4) Bargain, Bargain, Bargain – but do your homework:

Just because there are more people wanting to sell their properties, doesn’t mean that anything you buy now will net you millions. Markets are imperfect things & due to the flow of information, there is still a competitive advantage of one party over another. So just as word of warning, when supply far outweighs demand, remember to do the calculation ! Does the rent cover the mortgage? No. So move on to the next one.

5) In the long run, property will outperform all other assets:

59% of the world’s wealth is held in property. When Ray A Croc, the owner of McDonalds was asked what business he was in, he didn’t reply with the ‘burger business’. He just smiled and said the ‘property business’. So maybe (and I’m just throwing it out there J), if you stick to property it might not be as easy as selling shares, but at least you know that the chances of a receiving a steady stream of passive income, looks a whole lot better.

So in keeping in mind the points mentioned, remember the words of Warren Buffett, the most successful private investor in the World:

Put your eggs in one basket, watch that basket closely !!

NEW PROPERTY LAUNCH: 'Kelvin Manor', Johannesburg, South Africa

Horizon Consultancy & IPS have joined forces to bring you the 'Kelvin Manor' in Sandton, Johannesburg, South Africa.

This is an up market development on the doorstep of Sandton with units at R699 900 for a 2 bedroom, 1 bathroom apartment. With rental yields above 9%, this is definintely something to consider.

There are 2 ways in which you can become involved:Watch a video for 'Kelvin Manor' This video sets out the development visually & will answer any initial questions you may have.

You can also register for this property launch online so that you may be helped from the comfort of your own home.This registration will allow investors to interact directly with the developers so that any queries are dealt with immediatley.

Points of Consideration for 'Kelvin Manor':

• 5.7km from Sandton.
• Very little affordable accommodation in Sandton, yet demand for 5000 units.
• Sandton is the Financial Capital of Africa.
• Lifestyle Estate with club house, gym, swimming pool, tennis court, laundry, crèche and within a gated community.
• Walking distance to the Gautrain Station.
• Situated in leafy and green residential neighborhood.
• 2 bedroom, 1 bathroom & 2 parking spaces - R699 900, including costs.
• 100% financing is available.
• R15000 deposit secures !!

If you are interested in buying any unit(s), I will assist you with the entire purchasing process, including the rental management of the unit if you so require.

Eric S Doms
Managing Director

E-mail: eric@horizon-consultancy.com

Mobile: +44 (0)79 0630 9038

Fax no: +27 (0) 86 5292 395

PS: Join us on Twitter or Facebook for the latest property news !!

Into the Light - The State of the South African Economy

After months of denials, clever word play & sidestepping the question, Trevor Manual & Tito Mboweni have finally relented that South Africa is in a recession. So what exactly does this mean? In short, it means that we experienced negative growth for the first time in 17 years.

So why the sudden change in mood? Whatever happened to ‘We will weather the storm’ or ‘South Africa will be resilient against the credit crisis’ or ‘Our banks are world class & didn’t buy any toxic assets’. When Europe & the US are our biggest trading partners, isn’t it ignorant (or stupid if you like) to think that we won’t be affected by the fall out? (The fact that the SA economy is approximately 6-8 months behind UK is no excuse for the turnaround from our esteemed financial leaders)

The Economy – Who is steering the ship when there’s no rudder?

According the Cees Bruggemans, chief economist for FNB, the economy grew by 3% in 2008 and contracted by 1-2% in 2009. This was mainly due to the global banking and credit crisis and its impacts on SA’s mining and industrial exports. But a rebound of 2-4% should be seen by 2010.

Our inflation outlook remains positive with signs of further decline from a height of nearly 14% in 2008 to 8.5% in 2009. The expected average in 2009 is 7.5%% whilst 2010 will see it fall into the SARB’s target range of 5%. But a lot of assumptions are taken into consideration for this outlook !! Assumptions such as a global deflation during 2009, coupled with mild inflation in 2010 as well as the ‘small chance’ of oil price fluctuations. (In Summary: Let’s get out the dartboard & have a fat stab at what things might be like)

The Property Market – All pain, No gain?

The inescapable truth is that the worst and most widespread economic recession since the 1930s continues to batter the housing market not only in the UK and SA, but in markets across the globe.

According to Knight Frank, a major player in the international property market, there are a combination of factors that have contributed to the current decline in house prices. These include affordability, an increase in unemployment which in turn affects consumer confidence. With the recent 3.5% reduction in interest rates since December 08, South African banks have still decided to tighten their lending criteria ,as their outlook has changed from a national level to one of global sentiment. (So they’re actually comparing apples with pears……I hope Tito gives them all a fat klap !!)

Even with the current market perfectly suited to bargain buyers flushed with cash, the sales remain inconsistent proving that even these buyers are playing a waiting game for a clearer sign that the market has reached ground zero. The biggest problem that still remains is that houses are still highly unaffordable due to previously rapid property growth, low interest rates & high disposable incomes. In light of all that, maybe it’s not a bad thing that the tables now have turned from the heady days of rapid property growth. Otherwise, things could’ve been a lot worse than they are now.

The Upturn – What is that?

But is the doom and gloom we’re currently experiencing the start of things to come, or will an improvement be seen any time soon? (I’m hesitant to use the word recovery)

For the UK, the recession has slowed & according to Alistair Darling, Britain’s Chancellor, an improvement is expected by late 2009. He goes on to say that a 1.5% growth is expected provided that banks ease lending criteria to consumers as well as companies. (Those silly banks again !)

If you take the 6-8 months that SA lags behind, we could see an improvement by the World Cup in 2010. Coupled with the continued investment in our country’s infrastructure & the international exposure gained from hosting the biggest event on the planet (Don’t forget the projected R21 billion cash injection that will be generated by the event) I therefore think it safe to say that the economy will be due to jumpstart back into action, by middle to end 2010.

As for now, remember that any recession is part of a cycle. Even when things seem to be at its darkest possible point, the cycle will turn & take us back into the light.

Do not go gentle into that good night. Rage, rage against the dying of the light – Dylan Thomas

The Light at the end of the Tunnel, may be the light of an oncoming Train

Do you want the good news or bad news first?

Let’s start with the good news so as to soften the blow when it comes to telling you the bad news:

The Good News

Our April elections were judged to be free, fair & but above all, ‘incident’ free. We were praised internationally of being an example to not only Africa, but to the rest of the world as well. (Hats off to all :)

Our beloved Tito decreased the interest rates by yet another 1%, bringing the prime rate to 12%. It’s forecasted that another 1.5% will be cut before the end of the year thereby making the total decrease since December last year a whopping 3.5% !! (We want more – We want more !!)

More than 1.8 million tickets have been requested for the 2010 Soccer World Cup. Applications came from more than 200 countries with the leading countries being South Africa, USA, United Kingdom & Germany :)

The Bad News

FNB’s house price index reports that the annual property growth sits at an eye watering -7.8%. So over the period of only 1 year, you’ve lost almost 8% on the value of your house (Bring on the waterworks……… L)

Even with Tito’s gift of reducing interest rates, the consumer debt ratio still stands at 75% (So for every paycheck you get, you pay 75% to debt…..and that’s AFTER tax!!)

Economists predict a bloodbath of job losses totalling almost 300 000 by the end of the year, especially in the automotive & mining sectors (This is particularly bad as it affects our biggest exports, namely gold and platinum)

The ‘Guess’

As for my ‘calculated’ guess for when all this pain will go away, I would say the middle of next year. My reasons for this are simple:

- Sentiment on the global recession will improve due to successful ‘recession proof’ policies implemented this year, coupled with the affects of our local interest rate reductions.

- Together with the international exposure of hosting a successful World Cup, our commercial banks will slowly reduce lending criteria, thereby kick-starting the property market once again.

As for Today: Always remember, the harder the rain, the better the sunshine.

100 reasons to smile

Thu, 28 May 2009 16:18

The Monetary Policy Committee of the SA Reserve Bank (SARB) has cut the repo rate by 100 basis points, Governor Tito Mboweni said on Thursday.

The repo rate now stands at 7.5 percent while prime has been reduced to 11 percent.

This is the SARB's fourth rate cut this year.

Mboweni said the SARB's most recent consumer price inflation forecast showed a relatively unchanged outcome for the near-term as compared to that presented to the previous meeting of the MPC.

"Over the longer term, there appears to be a moderate improvement," he added.

This forecast, Mboweni noted, was similar to the Reuters consensus forecast of private analysts who expected inflation to average 6.9 percent and 5.7 percent in 2009 and 2010 respectively.

Mboweni said the main upside risk to the inflation outlook came from cost-push pressures, in particular from electricity price increases.

"Eskom has applied to the National Energy Regulator of SA for a 34 percent interim increase in electricity tariffs, but there is still uncertainty about the final adjustment," he said.

A number of municipalities had already budgeted for significant electricity price increases in anticipation of higher Eskom tariffs, Mboweni noted.

According to the governor, in line with the less negative global outlook, there had been a moderate recovery in international oil prices.

"North Sea Brent crude oil has been trading at prices of around $60 per barrel during the past days, compared with an average of around $50 per barrel during April.

"These developments may result in a moderate increase in the domestic petrol price in June," he said.

The impact of the higher international prices on domestic petrol prices had been partly offset by exchange rate movements during the month, Mboweni said.

He added that food price inflation remained well above average inflation, and had been lagging the favourable developments at the producer price level and in the spot prices of agricultural commodities.

"Food price inflation measured 17.9 percent in August 2008 and has been moderating persistently, but slowly, since then," the governor said.

Sapa

Too early for a British Summer ??

Summer is without a doubt the most anticipated & talked about event in the British calendar. If the Poms spent half the time preparing for summer, and focus the other half on their football, then maybe they’d be able to win another World Cup…….and so relive the glory days of 1966 (was a cheapshot, I know :)

So why the big hoohah? Cos the British summer, is just so flippen short……. 

The big talking point of the last few months has been the expected reduction of interest rates. The SARB has even gone so far as to increase the number of meetings to be held in order to, and here I quote ‘To allow for more effective planning and quicker reactions to changes in the economy’. (I think to the members of the MPC, it means more buffet lunches) 

But will any kind of reduction in interest rates prove to be a British summer for the current property market? The short answer is unfortunately, no. The real dampener is the difficulty in obtaining credit from commercial banks. But this is to be expected when there’s an increase in the unemployment figure, as well as another negative growth forecast for the second quarter of the year. And with house price growth at a reported -5% year-on-year, we are still not out of the woods…….by a long shot !!

So what can be done? Popular opinion is that the SARB will cut prime interest rates to 10.5% by the end of the year. But seeing as each interest rate cut takes about 6 to 9 months, to work itself through the economy, this is not the short term answer.

Therefore, it seems as if everyone is taking a ‘Look and See’ attitude coupled with what happens domestically as well as globally.

So without further ado, get out your swimming trunks, splash on some sunscreen and hit the beach (or river), cos anything is a lot better than nothing.

www.horizon-consultancy.com

Get used to the downswing, so that the upswing won’t give you Vertigo.....

Is it just me or is the world wallowing in the global economic crises? 

Every time you switch the channel to Sky / CNN or BBC you hear of unemployment, negative growth, repossessions, etc. Are things really that bad? And are we really approaching the worst recession since the 1980’s when the international community shunned us because of our political policies? The simple answer is unfortunately…………….………yes. 

Forecasts by Economists (here come the predictions) set our GDP growth………....sorry, our GDP decline to be in the region of -10% for 2009. And as pure economists, they always leave you with a ‘silver lining’…. but this may improve to -8% toward the end of the year. (What the hell does it matter when you’re looking at negative growth !!!)

In the property market, our commercial banks continued to restrict lending. This increased the average bank decline ratio (How many mortgage applications are declined after being submitted) to 60% !! As for deposits required to secure your property, the average deposit required was 24% compared to 16% last year. (If these figures don’t make you ill, then nothing will………)

With the potential for more interest rate cuts on the way, under such dire global and domestic economic conditions, it’s unlikely that reductions will even get the residential market out of bed. Let’s hope things improve, even though I have a sneaking suspicion that it’s going to get worse before it gets better. 

In conclusion, just a few words on this month’s election: 

Remember, that in our amazing democratic country, you the voter have the right to choose. No matter what the outcome, YOUR vote has power. So whatever your decision is, make sure that it’s based on what you believe to be right, as it not only affects you, but millions of South Africans worldwide. 

Hundreds, Bru !!

The Monetary Policy Committee of the SA Reserve Bank has cut the repo rate by 100-basis-points, Governor Tito Mboweni said on Tuesday.

The repo rate now stands at 9.5 percent while prime has been reduced to 13 percent.

"The global economy has continued to weaken significantly in recent months as a result of the turmoil in the financial markets.

"There is growing uncertainty regarding the depth and duration of the economic slowdown," Mboweni said.

He added that the South African economy had not escaped the impact of these developments, and domestic production had contracted as a result of weak domestic demand and a significant decline in export demand.

"Against this backdrop of widening domestic and global output gaps, the balance of risks to the inflation outlook has changed somewhat," he said.

Mboweni said that inflation — as measured by the reweighted and reconstituted consumer price index (CPI) for all urban areas — measured 8.1 percent in January 2009.

Food and non-alcoholic beverages prices, which increased at year-on-year rates of 15.7 percent in January, contributed 2.4 percentage points to total inflation.

The housing and utilities category contributed 2.1 percentage points, and together with food accounted for more than half of the measured inflation increase, Mboweni said.

The transport component had a minimal impact on the overall CPI as a result of the 20.3 percent reduction in petrol prices during January.

Producer price inflation, which reached 19.1 percent in August 2008, continued its downward trend, he said, measuring 9.2 percent in January 2009.

Despite the depreciation of the rand during 2008, producer prices of imported goods declined at a year-on-year rate of five percent in January.

Turning to the inflation outlook, Mboweni said the most recent central forecast of the Reserve Bank showed a near-term deterioration in the inflation outlook but a more favourable trend was forecast for the medium term, which was the relevant time frame for monetary policy.

Consumer price inflation was expected to average 8.1 percent in the first quarter of 2009 and then to decline to below six percent in the third quarter of the year.

As a result of technical base effects, inflation was then expected to marginally exceed the upper end of the inflation target range, before returning back to within the range in the second quarter of 2010.

It should remain there until the end of the forecast period in the fourth quarter of 2010, when it was expected to average 5.3 percent.

"The heightened levels of uncertainty and the rate of change of global developments make these forecasts subject to higher risk than is usually the case," Mboweni warned.

He said the inflation outlook had been dominated by the continued weakening of the global economy and financial markets, notwithstanding significant monetary and fiscal measures introduced by central banks and governments.

"The decline in global demand has resulted in a marked contraction in international trade," he said.

He reminded South Africans that the International Monetary Fund, which in January was forecasting global growth to average 0.5 percent in 2009, now expected the global economy to contract by up to one percent in 2009.

"Numerous industrialised and developing countries are already experiencing negative growth.

"World inflation is being restrained by declining demand and lower commodity prices which are expected to remain subdued under these conditions of negative or low growth.

"The weak global demand has been reflected in the export performance of the South African economy and domestic demand conditions had also deteriorated further," he said.

"Domestic demand conditions are expected to remain under pressure as a result of declining disposable incomes, tighter credit conditions and negative wealth effects."

Mboweni said the upside risks to the inflation outlook emanated primarily from cost-push pressures, particularly from administered prices.

"These include possible higher-than-expected electricity tariff increases," he said.

The decline in inflation might also be delayed by continued high rates of increases in food prices, despite marked declines in producer price food inflation, Mboweni said.

How to survive the Credit Crunch??

If I had £1 for every time I either heard the words ‘Credit Crunch’, then this so-called recession would be the furthest thing from my mind (cos I’ll be sipping pinas coladas on my yacht somewhere in the Caribbean :)

On average, economic recessions occur once every 7-10 years. And yet, with this ability to predict when the brown stuff will hit the fan, shouldn’t we be less surprised when we find the world in economic turmoil?

Wasn’t the last time bad enough? Or do you simply choose not to remember the last time?

So without pointing fingers at Economists (What do they know?), Bankers (greedy bunch!), Presidents (yes, Dubya !), Prime Ministers (yes, Mr Brown !) or your cat (no kicking please !), let’s look at some tips on how we can lessen the burden of this recession, so that when the next one comes along, we are ready for it !!

(Or, I can just copy and paste this article 7-10 years from now :)  

United Kingdom

Do you like free cash?

The Problem:

Almost 35% of all UK employees are eligible for a tax refund (no jokes!!) & every one of these employees can claim their tax for the last five years (even Saffers who have left the UK!!)

So why doesn’t everyone claim this moola when they leave? Cos, they’re either don’t know about it or they’re just too damn lazy !! And what would this refund cost me? A massive………£0 :)

The Solution:

There are 3 ways in which you qualify for a tax refund:

1) Earnings – Where your annual earnings were less than the personal tax free allowance.

2) Employment - You haven’t been employed for the full tax year.

3) Tax Code - You’ve been taxed under the wrong tax code (Duh!!).

You can always apply for a free assessment……….What have you got to lose?

Notable link:

http://www.horizon-consultancy.com/claimyourukrefund.html

International

Sending money to Mama?

The Problem:

Every single day, millions of people send money overseas. Once they’ve decided on a vendor they rarely change even if the rate / speed / security of the transaction is not the best possible.

But how does a better exchange rate help me when I’m only sending £100 at a time? You might only save £1 on every £100 per transaction, but multiply this £1 with every transaction you’ve ever done…………..I think you get my point :)

The Solution:

Currency Traders are trade worldwide currencies on a daily basis. Where commercial banks might give you a weekly average exchange rate, currency traders give you the exchange rate on that particular day of trading. Their fees are also a LOT lower than banks !!

So, the question remains, When will you see the light and make the change?

Notable link: 

http://www.horizon-consultancy.com/sendyourforex.html

And a few more tips on how to save:

- Work out a proper budget (not on the back of a cigarette packet !!) as you need to look at everything you spend to get a true picture.

- Take a packed lunch to work, skip the Pret sandwiches & save about a fiver a day (If you also skip the daily Latte you’ll save £10 a week !!)

- Change credit cards, switch them to a ''balance transfer offer" that stays at a low interest rate until the debt is repaid.

- Ditch the rugby / football / cricket season ticket (I know this one will be the toughest!!) or at least split the cost with friends. After all, how many of those midweek fixtures will you actually attend?

- Cancel the Gym membership, as many leisure centres offer membership schemes, have personal training & are kitted out with the full range of equipment. (Or you can go for a run which will save you £50 per month)

- Invest in energy-efficient light bulbs as they last about 10 times longer than ordinary ones (not because they’re made by Duracell batteries), and cost about £3. (You’ll save about £7 on your annual electricity bill)

With all this money saving tips in mind, I think the most important thing to remember is to remain positive. Every economic recession is part of a cycle, and as with every cycle, it will turn and revert back to positive growth & optimism.

 As Oscar Wilde once said, ‘All of us are in the gutter, but some of us are looking at the stars’.

Stop. Learn. Do - The DIY Approach

They always say time changes things, but you actually have to change them yourself - Andy Warhol

Five months ago I asked a few so-called 'web design professionals' to give me a quote of what a new website would cost Horizon. Quotes came in starting at £1000 and went all the way to £2500 (What were they thinking??)  

All I needed was 3 sections consisting of International Property, FOREX and UK PAYE refunds which should be integrated into Aweber (our autoresponder) How difficult was that ??!!

So nothing ventured gained, nothing gained...........I proceeded to learn how to do it myself. Now I know what you're thinking, What the hell was I doing??!! Leave the technical stuff to the pros and get on with the marketing / advertising / promotion of your company !! 

Our web server, 1and1.co.uk has a limited website builder, but it was with this that I started to experiment. From template, images input to the actual process of programming............

Five months later I have learnt to build a website from scratch (no jokes that it was a long, hard slog !!). So without further ado, have a look at the new and improved Horizon Consultancy website:

www.horizon-consultancy.com

Any thoughts, ideas of comments are most welcome !!

The night is darkest before the dawn..........thanks Batman.

Oil price, Interest rates & food prices set to decrease…………but so will the value of your home according to some analysts.

For all we know, these so called ‘analysts’ could be the weatherman taking a blind stab at predicting  those clouds on the horizon to be a storm coming / going / never was. (Roulette was never so much fun J) Therefore, sometimes they’re on the money………and sometimes they sidestep their fallibility by using the ‘We could never have predicted the current situation’ line. 

So without taking the moral high ground, here are my thoughts on what’s to come for the property market in the first half of 2009: 

1)      Interest Rate decrease in February 09 (followed by another in June 09):

a.       The MPC meeting in April 09 is tricky, because a change might be controversial as it might smack of the ANC trying to garner votes for the April Elections.

b.      But the SARB is supposed to be autonomous from the ruling party, so we’ll have to wait and see if this is actually the case.

2)      Inflation will fall & return to single digit territory, where it will better reflect the 3 to 6% inflation band set by the SARB:

a.       Holding thumbs that the Rand will not weaken against world currencies & that the oil price remain steady, inflation will remain steady throughout the first half of the year.

3)      Growth will remain in single digits:

a.       Interest rate reductions will provide welcome relief to homeowners & will somewhat revive the residential property market………..but not for long.

b.      Weak economic growth will negate these reductions due to the global economic recession.

4)      April Elections will play a major part in all facets of the market:

a.       The rise & rise of COPE these past few months have the media in a frenzy (another weatherman?) but the political changes won’t be on a wholesale basis. (not until 2014)

b.      The DA will take the Western Cape, COPE will take the Northern Province……but the ANC will still take victory (without their two-thirds majority)