Property sector future looks bright
South African business owners in the real estate and construction sectors are very upbeat about future prospects for the sector.
Research from Grant Thornton’s International Business Report (IBR) reveals that 68 percent of SA businesses are optimistic about the outlook for the real estate and construction sector in the next 12 months.
“Optimism is returning to the global property market, but with a cautionary approach,” says Lee-Anne Bac, head of property and director for advisory services at Grant Thornton Johannesburg.
The IBR reveals that net 42 percent of businesses globally are optimistic for the sector in 2014, led by Southeast Asia (78 percent), Latin America (60 percent) and North America (56 percent). Europe (33 percent) is somewhat polarised between persistent pessimism in southern Europe but growing optimism across northern and eastern parts of the region.
How much will you pay for your yard?
Property and real estate moguls currently make up the third largest group of self-made billionaires on the Forbes 400 list.
It’s not surprising that the majority of them made their fortune in countries with densely populated cities such as those found in South-East Asia, the United Stated and Europe, according to Hayley Ivins-Downes from Lightstone.
Since a higher concentration of people living in an area increases the demand and value of land, these entrepreneurs realised that the future of property expansion was skywards, she says.
In South Africa luxury is still associated with large yards and proportionally large property sizes, but with the increase in population densities in metro areas residential apartments might become a more feasible living option.
The Internet vs estate agents
While the Internet and online retail websites have become a continuously evolving fundamental part of life for many tech savvy consumers, there are elements of dealing with a real estate professional face-to-face that simply can’t be replaced.
This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says although the Internet age has brought about many changes in the way that real estate business is conducted, like the fact that more than 90 percent of home buyers use a property search portal as their initial step towards homeownership - a large majority of those consumers will still seek the professional services of a real estate agent during the property buying process.
“Consumers are confident that the Internet will help them narrow down their property search fairly quickly given the vast amount of information that they are able to access within a short period of time. Many home buyers appreciate that online resources have simplified the process of finding their perfect home. However, while home buyers are looking for information regarding property and searching for homes online, they will still consult with a real estate agent to supplement and refine their search.
IEA WC rental course and workshop
With many real estate agencies adding rentals to the services they offer, it is important for letting agents to be completely au fait with the Rental Housing Act and the legal interpretation of it, as well as the practical day to day aspects of rental management.
The rentals course will run on 14 and 15 April and the cost for the two days is R1 650 for visitors and discounted to R1 400 for IEASA members.
This is according to Annette Evans, regional manager of the Institute of Estate Agents, Western Cape, who says agents who do not have the necessary experience in this field and are interested in increasing their knowledge, are encouraged to attend the Institute’s Residential Rental course and the Rental Inspections workshop.
The Residential Rentals course is a comprehensive two day course to be run at their Training Centre in Pinelands. This will be presented by Vivien Marks, who has extensive experience in rentals.
How to handle defaulting tenants
Whether handling a rental property personally or through a reputable agent, the most crucial way to avoid defaulting tenants is to be equipped with the facts and knowledge of how to act decisively to protect your asset as a landlord.
This is according to Grant Rea, rental specialist at RE/MAX Living, who says the first line of defence against this predicament is the initial screening process, which should include meeting a tenant face-to-face when the property is shown initially, as well as the collection of essential personal information from the prospective tenant. He says there is also the matter of vetting the tenant by verifying employment, references, their identity and conducting general background checks.
He says using a professional rental agent in the vetting process can be a massive benefit to the landlord, as their expertise and experience can prove critical in these situations.
Rea advises that landlords facing the worst case scenario should consider the following important elements and possible recourse.
Shoddy renovations and levy - my rights?
A Property24 reader asks:
I bought a unit last year and when I moved in we were told the complex was getting a facelift. The renovations were shoddy work and we complained. The contractor ended up not finishing the job and the body corporate took them to court, which is still ongoing. Then this year we were told that we need to pay a special levy on top of the normal levy.
Another problem, I really don't see anything done with our levies except dustbin collection. My question is what if we pay that special levy and they don't do renovations or maybe the nominated contractor does the same thing and vanishes? Am I eligible to take the body corporate to court as they are demanding more money but the building is getting dilapidated? Nothing is being done, paint is peeling off, the swimming pool is filthy, broken gutters, etc.
Is there any legislation that protects the home buyer against this problem?
CPA could favour unhappy buyers
When the Consumer Protection Act was first promulgated some three years ago, many people in the real estate sector were worried that it would lead to regular cancellations of sale contracts and/or post sale disputes in which the agent and the seller would be held responsible for any number of problems, including defects they had simply not been aware.
This is according to Bill Rawson, Chairman of the Rawson Property Group, who says however, thus far this has not yet happened.
Nevertheless, says Rawson, it is by no means certain that at some stage in the future one or two of the ‘trickier’ clauses in the Consumer Protection Act will be invoked by dissatisfied buyers and as the act stands at the moment it seems likely that the courts would have to rule in favour of the plaintiff.
Asked to give examples of what he considers clauses that could prove to be disadvantageous to a seller and his agent, Rawson mentioned: