‘Shocks’ in SA’s property market will not be repeated in 2019
For political and economic reasons, South Africa’s property industry experienced many uncertainties and setbacks during 2018, and most estate agencies will likely look back on the year past as a tough period.
However, says Rowan Alexander, Director of Alexander Swart Property, the “low-energy, demoralisation and loss of steam” that characterised the property sector in the last quarter of last year have now “disappeared” - and there is a feeling of optimism and renewed hope about the prospects for 2019, especially in the areas in which Alexander Swart Property operates, namely Brackenfell, Kraaifontein, Durbanville and Kuils River in the Western Cape.
“Very few of the negative conditions which bedevilled the property sector in 2018, and which in some areas like the Southern Suburbs led to 10% to 15% drops in house values, have changed this year, but among the developers, builders, attorneys and other Western Cape estate agents with whom I mix, there is a feeling that, having survived 2018, from here on the property market can only improve. Significantly, we can see what lies ahead and we can predict that this year, unlike 2018, there should be no unforeseen ‘shocks’,” says Alexander.
Should you renovate your property before you sell?
In a buyer’s market it is very important for sellers to do their best to make their listing more attractive than the next. But while some factors like renovating, extending, installing solar panels and even repainting your home may seem like a good idea now, it could actually impact negatively on a potential sale.
Seeff property group cautions against doing the following:
1. Building on and renovating
Steve van Wyk from Seeff Centurion says the biggest risk in renovating or extending a property you are about to list is that you will overcapitalise and make the property uncompetitive in a specific area.
“Before undertaking any renovations or extensions it is crucial to first determine the price thresholds of the area you want to sell in,” he says.
You can expect more residential property developments in 2019
“We saw many agents having to reinvent their strategies in an attempt to grow their businesses. Some were also forced to evolve as the man on the street consumes information differently,” says Richard Gray, Harcourts Africa Chief Executive Officer.
“However, there were certain areas that performed well, developments being one. Across the major metros, developments took centre stage as a lot of investment and high demand seemed to defy the downward trend of the property landscape. And without a doubt, this will continue throughout 2019.”
Are student flats a savvy investment or risky choice?
If thinking back to your student days doesn’t make you even just somewhat apprehensive to invest in student accommodation as a means of rental income, then the distance between then and now must be clouding your recall.
“As an investor, one should always carefully consider the risks involved in any purchase. While student accommodation does offer investors a low-risk option in terms of the possibility of prolonged vacancies, this type of rental income does pose other risks, such as short-notice lease terminations and the possibility for neglect and damage to the property,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
Considering this, is student accommodation a savvy investment option, or a high-risk purchase?
According to Grant Gavin, Broker/Owner of RE/MAX Panache, investing in student accommodation is a smart choice, provided the correct safeguards are put in place to protect the investment value of the property.