According to Sotheby’s International Realty, in the boom years from 2003 to 2008, prices rose rapidly in George and nearby towns such as Wilderness, Sedgefield as well as in the luxury golf estates dotted along the Southern Cape coast.
Tim Kirby, owner of the Sotheby’s International Realty franchise in George says at the time, the whole area essentially became a playground for the affluent with plenty of money to spend on upmarket second homes.
Investors set to boost home market
The best hope for the beleaguered South African residential market right now is robust investor activity, according to Auction Alliance CEO, Rael Levitt.
"We've been saying for years that residential property investors looking for rental yields will boost the market, as has occurred in the commercial property sector".
In the current low interest rate environment, investors have a historic opportunity to access a cheaper housing market, which is at the moment seeing a surge in rental demand.
SA is under-housed and this factor is anticipated to last for decades. This means that unlike the USA and North Atlantic, we will never have empty houses because tenants will be queuing around the block to acquire rental accommodation, he explains.
According to an internal survey conducted by Auction Alliance, the investor share of home buyers at auctions grew by 9.6 percent in July, the highest level in a year.
Save, save, save for deposit!
Saving up a deposit for your first property brings great financial rewards.
The earlier you start saving, the better, but even if you missed the opportunity to start young, it is never too late, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
“Over the last couple of years, the banks’ lending criteria have become increasingly stringent, and in particular, deposit requirements have remained high. Some banks have adopted policies of only awarding bonds at a 70 percent loan-to-value. That means a deposit of R300k required on the purchase of a R1m property – a steep requirement for most prospective homeowners.
More recently banks have changed these policies and have become more competitive.
“However, the difficulty in obtaining a 100 percent bond is not the only reason why it is imperative to save up a deposit for a property purchase,” says Goslett.
Top 5 tips for selling your property
Advice abounds for first time buyers, but where should first time sellers start?
Getting your price right is essential. Consult a reputable agent and get an online property valuation, which will give you sold prices of comparable properties in your area, street or complex.
Adrian Goslett, CEO of RE/MAX of Southern Africa, says that for first time sellers, the task of selling their home could be equally as daunting as buying one would be for first time buyers.
“The whole process can be exceptionally daunting for a first time seller who has never been through the process from this side of the fence,” says Goslett.
“Their perception as a seller is very different to the one they had as a buyer, in that now the value of the house is no longer measured by what fair market value would be, but rather by the enjoyment that came from living in one,” he says.
Goslett says that while it’s normal for sellers to be emotionally attached to their home, they need to distance themselves from the emotional aspect as soon as they make the decision to sell.
EAAB on verge of collapse?
Allegations of fraud and corruption have been levelled against staff at the Estate Agency Affairs Board and two more senior staff members have been suspended as the board appears to be on the verge of collapse.
IF the EAAB fell apart, it would have serious repercussions for the property industry, which contributes about 15% of South Africa’s gross domestic product in a property sector that’s worth about R2-trillion.
The problems started last Friday when board chairman Thami Bolani was suspended amid allegations that he had contravened the conditions of his appointment as a board member.
Apparently Bolani got wind of the Department of Trade and Industry’s plan to suspend him and he immediately suspended Bryan Chaplog, the chief financial officer and circulated an e-mail announcing this suspension to all board members. Reasons for the suspension have not been given.
Signing a rental lease under the CPA
A Property24 reader asks if it is within law to be forced to pay extra deposit towards a property they have been renting for the past five years:
After the said verbal agreement, they sent me an email, stipulating that I must sign a new contract under the new Consumer Protection Act and also want me to pay an additional deposit to bring it in line with the current increased amount. I paid an initial deposit of 1½ times the normal rent in 2007.
It was not increased over the total lease period and I have never missed a payment. The agency said if I don’t sign the new contract or if I don’t pay the extra deposit, they will not extend my lease agreement and will find a new tenant.
Company chief executive Ben Pierre Malherbe says that various developments are underway ranging from rental units and government subsidised houses and those affordable homes that will be sold to residents.
Calgro M3 is building 1 600 units in Pennyville and 800 of these homes have been sold to investors. Another 400 units will be managed by the Johannesburg Social Housing Company and let out to people at affordable rentals while the other 400 comprise of RDP homes.
Another major project along Main Reef Road between Soweto and Florida is being erected at a cost of R2.28billion and will see 9 600 housing units coming onto the market. About a third of these homes will be subsidised.