Property 24/10 - 101

Insist agent justifies your valuation
Many home sellers, despite ongoing warnings from estate agencies on this subject, are still overvaluing their homes. 

This is according to Lanice Steward, Managing Director of Anne Porter Knight Frank, who says when analysing the Propstats’ figures for the majority of Cape Peninsula suburbs, this would be the conclusion property trend watchers would be led to. 

Taking as an example the Hout Bay/Llandudno area in which APKF is particularly active, Steward says that in the last three years prices have remained more or less static - the current average price for Hout Bay being ± R2 760 000.  However, she explains, the average time taken to sell a home increased in that three year period from 128 days in 2009 to 155 days in 2011. 

“This indicates that some sellers are still not accepting that price increases are no longer the norm and that realistic prices are now at roughly 2007 levels.” 

It is this, not a lack of demand, she says, that is the main reason for properties staying on the market for such long periods. 

Need-to-know for buying ST property
Sectional title property ownership is increasingly popular and today there are over 50 000 schemes, totalling more than 800 000 individual units in South Africa. The concept is tightly regulated under the recently amended Sectional Titles Act - legislation covering every aspect of sectional title ownership - and all owners and tenants must be aware they have very specific obligations and responsibilities that are governed by law. 

When you buy a unit in a sectional title scheme you will, upon transfer, become the exclusive owner of your section and a joint owner of the common property. Depending on what section you bought, you may also be entitled to the exclusive use of an area such as a parking bay, garden, or yard.

At the same time you will automatically become a member of an association comprising all the owners collectively called the Body Corporate. As a member of the Body Corporate, you have a say in all important decisions surrounding the management of your scheme and the maintenance of the common property. Every year you and the other owners elect trustees who are responsible for the day-to-day affairs of the Body Corporate and generally protect your interests - their duties are clearly described in the Act and rules. 

Buying bush and farm property in SA
Estate agents report an increase in people buying luxury properties in bush and lifestyle farms, as they offer more than a roof over one's head.

The Benguela Group says on the West Coast, Thali Thali is a sought-after location on a farm known as Zoutekuylen.

It measures 1 460ha running down the R27 and inlands towards Hopefield.

Heinrich Koorts, chief executive officer of Benguela Group, says this property includes a manor house, guest house, self-catering cottages and luxury tented accommodation, all equipped to the highest standards.

Rode valuation had valued this property at just under R26 million, it is selling for R17.9 million.

He says the game farm is an hour’s drive from Cape Town, an hour and 15 minutes from Cape Town International Airport and 10 minutes from Saldanha Airport.

Can landlord refuse to refund deposit?
Two Property24 readers ask whether their landlord can withhold their rental deposit upon expiry of the lease due to late notice being given where a landlord was not contactable and secondly for damages to a carpet. 

David Beattie, principal of Chorus Letting, a Cape Town based specialist residential letting company, advises:  

Reader 1 asks:

I read the article and wanted to find out more about a rental deposit. We are in the situation whereby when we wanted to hand in our notice on the 1st of the month our landlords were not available. Upon their return we handed in our notice on the 5th whereby they said that we will under no circumstances receive back our deposit due to handing in our notice late. What is the exact law about this and where can I find the law about this? 

Pay off debt, save, then buy property
The National Credit Regulator says the credit market activity suggests a need for caution as the number of consumers with impaired records has risen.

Data reveals that the number of consumers with impaired records increased by 100 000 to 8.93 million from 8.83 million in the previous quarter.

According to the National Credit Regulator (NCR) acting chief executive officer Nomsa Motshegare, the credit bureau statistics reported for the quarter ended December 2011 suggest the need for caution.

As at the end of December 2011, credit bureaus had records for 19.34 million credit-active consumers, an increase of 1.3 percent over the 19.10 million of the previous quarter.

Consumers classified in good standing increased by 142 000 to 10.41 million consumers, an increase of 1.4 percent quarter-on-quarter (q/q) and 5.2 percent year-on-year (y/y).

The value of distressed property in SA
The level of distressed properties remains relatively high as many homeowners battle to control debt and adjust to the high cost of living.

According to Hayley Ivins of Lightstone, distressed property traditionally sells for less than market value, offering savvy buyers and property investors an opportunity to acquire well located property at a significant discount. 

She explains that distressed property is classified as property that is sold within a month before or after an auction date for the particular property.

Lightstone monitors the distressed property market segments and assign a Distressed Sale Factor (DSF) to properties that are sold as a result of default. 

The DSF report enables the researchers to understand what distressed properties fetch as a sales price compared to its predicted market value. 

She says the study excludes property in possession sales, which occur if the reserve price is not attained and the financial institution takes ownership of the property themselves.

The game of rugby and property in CT
There is talk that the Cape Town Stadium in Greenpoint could become Western Province (WP) Rugby's new home because of its capacity.

According to Gillian Saunders, head of advisory services at Grant Thornton Johannesburg, the stadium can hold an additional 20 000 spectators compared to Newlands.

“In terms of growth of rugby as a sport in the province, the Newlands stadium is beginning to constrain the WP Rugby team.”

Saunders explains that in the build up to the FIFA World Cup in 2010, research indicated that there could be demand for an extra 50 percent spectators at some rugby games, which the Newlands stadium could not accommodate.

The Western Province rugby body also owns the Newlands stadium as well as a few additional properties in the neighbourhood.

“WP Rugby could make a considerable profit on the sale of this land which would help to boost union coffers,” she says.

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