Property 24/10 - 157

COJ oppose 73% of valuation objections
The City of Johannesburg (COJ) has objected to seventy-three percent (73%) of the 85 499 property value objections on the 2013 valuation roll. Included in the list of objections are 169 properties in Saxonwold plus five others within or close to Sahara Group Compound (referred to as Gupta Family Compound in various media).  

The City's Valuation Roll is a transparent legal process prescribed by the Municipal Property Rates Act (MPRA). The Municipal Valuer produced and published the 2013 General Valuation (GV) Roll on 20th February. This roll was open for inspection and objection until the 3rd of May. Therefore, the implication in various media of preferential treatment before completion of the process is without substance, says COJ.

The 14 properties on the Valuation Roll, which can be attributed to the Gupta Family companies which own the properties in Saxonwold valued at R206 920 000.00 increased in value by twenty percent (20%), from R172 103 000.00 in the GV 2008 roll. Of the 14 properties the City objected to four as being undervalued including the property referred to in the Saturday Star of the 18th May 2013 valued at R16 890 000.00 in 2008 and R490 000.00 in 2013. COJ notes it is therefore a grave oversight that information, which is publicly available, is used to sensationalise a transparent process to ensure a credible Valuation Roll.

New president elected for SAPOA
SAPOA was established to create a powerful platform for property investors. Today SAPOA is the voice of commercial property.

With his experience in the property and banking sector, new SAPOA President Estienne de Klerk is set to lead the representative body with a keen focus and passion for the property sector.  SAPOA members control about 90 percent of commercial and industrial property in South Africa and the representative body is held in high esteem by the relevant sectors of government and is consulted on all matters about the property industry. SAPOA also enjoys representation on key South African bodies essential to the country's property development.

Neil Gopal, SAPOA CEO, says the appointment of de Klerk as President of SAPOA is a boost for the company, with his knowledge, energetic personality and deep commitment to their sector.

De Klerk is executive director of Growthpoint Properties, South Africa’s largest JSE listed property company. He is also a director of Growthpoint Properties Australia, V&A Waterfront and Chairman of the REIT committee of the SA REIT Association. De Klerk holds a BCom Honours in Accounting and Marketing and is a qualified CA (SA).

Advice for buying sect. title property
As owning a sectional title unit over a freestanding home becomes more and more popular due to the rising costs of maintaining properties and the added security sectional titles often offer, the number of sectional title schemes are increasing in South Africa and this is set to continue.  This is according to Johann le Roux, executive director of Propell, who says there are a few things that the prospective buyer should ask about or know, before signing an offer to purchase. 

The sectional title unit bought is a section of a scheme, which is jointly owned by all the members. Some units do have the rights to use a particular area exclusively (the garden or parking for example) but these areas are not owned by the buyer, they remain part of the common property.

Once the transfer of the unit goes through, the owner becomes a member of the body corporate of the scheme, which gives the owner the right to vote at meetings and to have a say in the way the scheme is run. 

Every year the body corporate elects trustees to manage the finances and day to day management of the sectional title scheme and it is in the owner’s interests to become as involved as possible in all of what happens in the development.

The responsibilities of a landlord
A common struggle for managing agents when it comes to the landlord tenant relationship is the maintenance of the unit by the landlord and tenants not paying their rent on time.  This is according to Sunell Afrika, rental manager at property management company IHPC, who takes a look at the landlord's obligations in letting out a property.

Afrika says in a recent landlord workshop they had questions asked such as what would be deemed fair wear and tear and what the tenant’s responsibilities are. According to the Rental Housing Act and the Unfair Practices Act a “landlord must let a dwelling which at the commencement of the lease is in a condition reasonably fit for the purpose for which it is let and keep and maintain the dwelling in compliance with all the ordinances, health or safety regulations or any other law”.

Afrika says it means that when you are renting out residential property the landlord must ensure that everything is in working condition and that the lease clearly states what the tenant’s responsibility is in maintaining the property in that order. "If the property rented out is a well kept one, you will attract good tenants, who will look after the property as they would their own.”

Agents reminded of FFC renewal
All estate agents must receive certification for the National Qualification Framework (NQF) level 4 or level 5 before October 2013 or they will not be issued with Fidelity Fund Certificates (FFCs) for 2014.  Property practitioners were reminded of this by Bryan Chaplog, acting CEO of the Estate Agency Affairs Board (EAAB), at the latest EAAB Road Show meeting held in Cape Town, says Annette Evans, manager of the Institute of Estate Agents, Western Cape, who attended the EAAB Road Show gathering in Cape Town last month.

Agents, principals and owners of estate agencies or related businesses need to take cognisance of how critical it is that every manager/owner/member and registered operation complies before they apply for their 2014 FFC in October 2013 or they will be deregistered on the 1st of January 2014.

There are various ways to comply, either by exemption, due to experience or tertiary qualifications or by completion of a portfolio of evidence (POE) which supports the Recognition of Prior Learning (RPL) for either level 4 or 5. A certificate by Services Sector Education and Training Authority (SSETA) will be issued, whereby agents are given two years from the certification date to complete their professional designation exams (PDE) and once they have completed the appropriate steps, they can apply for their Fidelity Fund Certificate (FFCs) renewals for 2014.

Interest rates outlook in South Africa
The market is currently factoring in the possibility of a 25bp cut in the repo rate by the end of the year with almost 100 percent certainty, although many view this as a 50 percent chance of a 50bp cut (i.e. 0.50 percent).  However, with the repo rate at 5.00 percent, the likelihood of a 25bp cut has increased significantly, as opposed to the 50bp downward trajectory that the repo rate has been on since 2009.

The SARB has also indicated that it could cut by 25bp (should the factors it assesses in deciding on the appropriate stance of monetary policy tip the balance toward a cut) now that the repurchase rate is at a low, of 5.00 percent.

A 50bp cut when the repo rate is at 5.00 percent would have a 10 percent impact and could prove to be too severe. This does not mean that a 25bp cut is a certainty this year, but rather that the probability has risen.

We ascribe a 45 percent chance of a 25bp cut at the MPC meeting this month, on 21 and 23 May, and a 55 percent chance that no cut will occur this month.

Buying property in the digital age
With a growing first-time buyer market and the average age of buyers in the mid-thirties, it's clear that property buying in South Africa is being driven by the younger generation. The way that property is advertised and sold is evolving in line with the needs of this younger market.   Research from ooba, South Africa's leading bond originator, has shown that the proportion of first-time buyers in the property market has grown from 44.9 percent in April 2010 to 52.0 percent in April 2013. The average age of first-time buyers was 33 in April this year, and the average age of all ooba applicants was 37. 

According to Rhys Dyer, ooba COO, if you think of the average 33-year-old in the property market today, they've probably had an email address for most of their adult lives and have used search engines over any other reference tool when they're looking for information. 

He says they have Facebook profiles and interact with friends and brands on Twitter, so naturally, when considering buying a house the internet is the first place they'll look. 

Positive forecast for rental market
A recent research survey undertaken by Torus Capital outlines a positive forecast for the property rental industry in South Africa for 2013 and beyond. Interestingly, the residential property rental market shows potential for positive growth, somewhat at odds with the current tough economic climate.  Martin Goodman, Director of Torus Capital, a short-term insurance facility offering niche products that are geared towards specific markets, believes that there has never been a better time to be in the residential rental market.

He says the industry is showing considerable growth, which predictions indicate will continue.

The survey, targeted at those in the property sector, aimed to identify trends in the market, and to understand the challenges faced by those in the industry in the light of those trends.

Unsurprisingly, the resultant forecast for the residential property market in 2013 predicted considerable growth, with 85 percent of respondents echoing Goodman’s confidence that the industry would continue to expand.

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