City of Cape Town steps up
South Africa - Property360
The City of Cape Town appears to be the only municipality in South Africa to remain available for receiving/assessing building plan applications and land use/development applications during lockdown.
It is committed to supporting the construction and building sector during this difficult period, says mayoral committee member Marian Nieuwoudt. “Since March 27 (until the start of the Easter weekend) we have created 298 land use cases, of which 200 have been finalised. In terms of building plan applications, 720 cases were created, of which 703 have been approved during this period – a total of 903 approved applications, representing an approval rate of 88.8%.
“It is our intention to ensure applications be processed for approval and be ready to begin as soon as the lockdown period has ended,” she says. If applications are compliant with the Development Management Scheme, especially building plans, she says they are likely to be rapidly processed and finalised.
Covid-19 and the property market: Volumes more than values
South Africa - FNB
Preliminary deeds data shows that market volumes have declined by an estimated 40% y/y (Figure 1). To put this into context, transactions volumes in China at the height of lockdown declined in excess of 90% y/y, before recovering as lockdown restrictions were lifted. While aggressive cuts in interest rates will eventually assist home purchasing activity, in the short term this will likely be outweighed by heightened uncertainty due to Covid-19 and second-round effects on the labour market.
The supply side will also feel the pinch. With lower demand and some segments already excessively supplied, we expect a sharp decline in the supply of new residential units. On balance, supply disruptions are supportive of house price growth, particularly in the lower end where there is already a shortage of new building stock.
International experience suggests that pandemics tend to have a sharp but shortlived impact on property markets, more so on volumes. For example, during the SARS outbreak in 2003, Hong Kong housing transaction volumes fell by up to 72% y/y as customers avoided human contact. Importantly, transactions volumes normalised soon after the pandemic was over. House prices, on the other hand, did not fall significantly. During the current Covid-19 episode in China, available data shows that transaction volumes nearly ceased in February (at the height of the outbreak) but rebounded in March as restrictions were lifted. Similar to the SARS outbreak, the impact on house prices has been relatively muted so far.
Working from home in sectional title schemes
South Africa - Schindlers
COVID-19 has irrevocably changed and challenged the way that we do business in South Africa and the rest of the world. Businesses have been forced to operate from home where possible and, as a result, they are discovering the benefits that technology, lower transportation costs, and more personal freedom offer to the younger generation of employees. However, working from home is not always authorised in relation to the zoning of a property. There are restrictions on the uses that a property may lawfully be put to in terms of the applicable town planning scheme that may render working from home unlawful. There may also be restrictions that apply to the property if the property is in a sectional title scheme, by virtue of the provisions of the rules of the scheme.
In this article, we consider the land use management (a.k.a. town planning permissions) and restrictions that are common to most town planning schemes as well as restrictions that are contained in sectional title rules, and how the two interact.