SAPOA 'Meet the Mayor' campaign
The need to strengthen dialogue and the overarching relationship between government and the private property sector has become imperative, not only for real estate players to get their projects off the ground and their voices to be heard, but to assist the public sector to bolster economic growth.
This is something the South African Property Owners Association (SAPOA) understands and is actively rallying behind, namely through its highly successful “Meet the Mayor” series.
On 23 October, SAPOA president Amelia Beattie and CEO, Neil Gopal, met the mayor of the City of Cape Town, Patricia de Lille, and her entire executive team, including deputy mayor and members of the mayoral committee, in an endeavour to entrench its “Meet the Mayor” campaign as an annual affair.
Stock constraints push prices up
The main problem encountered by estate agents today is the serious stock constraints in the affordable to R10 million price categories according to Lanice Steward, managing director of Knight Frank Residential SA, who says when looking at PropStats there is an indication that prices are being pushed upwards in some areas with shorter periods to sell, particularly on the Atlantic Seaboard in Cape Town.
In 2013, figures of sales from January to September show that 650 units were sold at an average price of R4 826 936. These properties took an average 125 days to sell and there was a 13.5 percent price difference between the asking price and selling price to achieve the sales.
This year, during the same period, PropStats indicates that 557 properties were sold. The average selling price is listed as R5 899 310, with a 9.3 percent difference between the asking and selling price, while properties are taking on average 111 days to sell.
Cliffe Dekker Hofmeyr wins award
Cliffe Dekker Hofmeyr has won the Legal Week Africa Real Estate Team of the Year for the work the team did on leasehold property ownership for the Waterfall development just outside Johannesburg.
In addition, the national practice head of the real estate practice, Attie Pretorius, was awarded the Lifetime Achievement Award for excellence in real estate law at the Inaugural SA Professional Services Awards.
According to Pretorius, who is also the chairman and a director in the real estate practice at Cliffe Dekker Hofmeyr, leasehold property ownership is common around the world, but South African property developers have avoided it. The brave few who've tried it are finding the headway difficult. The Waterfall development is one of the first developments in South Africa to be successful in using leasehold property ownership.
SA housing sector prospects improve
A 41.9 percent year-on-year increase in the plans approved for new housing units could herald the start of a new era in South Africa’s residential property sector according to Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, who says despite the generally accepted opinion that, as a result of the stringent financial constraints under which they operate, coupled with the serious lack of mortgage finance, middle class South Africans will see no significant upturn in the housing sector for the foreseeable future.
Van Alphen says this big increase in building plans augers well for residential property. Quoting from the latest Absa Home Loans Review, he says the bank’s figures show that building costs, as always, had increased in line with the upturn in plans passed, but at an average price of R5 682 per square metre, South Africa’s home building costs are still by any standards reasonable.
Developers struggle to get finance
South African developers looking to obtain finance to build and sell - or build and rent out properties such as townhouse complexes, flats, or retirement developments, are struggling to acquire funding from banks.
This is according to Gary Palmer, CEO of Paragon Lending Solutions, who says due to the bad debt that was accumulated as a result of residential developers defaulting during the financial recession, banks are wary of approving loans to developers who haven’t secured the required level of pre-sales for the transactions where developers are looking to build and sell to third parties.
Banks are also wary of financing developers who are looking to build, hold and rent out, because pre-lets are difficult to obtain prior to construction - and normally residential leases are only signed for 12 months.
11 tips for serious property investors
Whether you are a seasoned investor or just starting out, knowing where to find investment property is one of the biggest challenges facing real estate investors. So, how do you know when you have discovered the right investment match?
Jason Vorster, National Sales Manager of Just Invest, shares a few tips for finding the right location to invest in…
1. Starting your search
Although an experienced real estate agent can help you in your search, you should start looking for your investment on your own. You need to understand the property market and be secure in your decision, and believe you haven’t been swayed by a smooth talking agent. The most important thing is to have an unbiased approach to all the properties and neighbourhoods within your price range.
Collaborating to boost SA property
Africa’s built environment is undergoing unprecedented change, with rapid urbanisation across the continent and populations in key cities projected to grow some 60 percent above 2010 levels.
These developments are driving a need to invest US$1 trillion per year in African infrastructure, equivalent to 70 times the projected costs of the 2016 Olympics Games in Rio de Janeiro.
A recent research report commissioned by the Royal Institution of Chartered Surveyors (RICS) highlights the increased demand in the real estate markets in five countries, namely, South Africa, Kenya, Ghana, Nigeria and Tanzania. The report called "Unleashing Sub-Saharan African Property Markets" gives some insights into the opportunities these key markets offer, as well as challenges they face.