Property 24/10 - 63

Property owners trapped by bonds
At least 200 000 property owners in South Africa are stuck in a negative equity trap where the value of their property is less than the outstanding bond that is owed to the bank or financial institution.

Many thousands of property owners are locked into their homes because they owe more to the bank than the property is worth claims Auction Alliance.

This is the warning given by Rael Levitt, chief executive of Auction Alliance, who says that a further 300 000 homeowners are either behind in their bond repayments or are already in the foreclosure process.

He says the housing market has deteriorated sharply this year after a mild recovery last year.

Levitt says mortgage foreclosures by banks had dropped by about 40% between 2009 and last year, but price deflation had caused homeowners to be in a negative equity situation and prices continued to fall despite the lack of new homes coming onto the market.

Somerset West, Constantia still alive
The property market in Somerset West remains relatively buoyant with 35 properties worth R73-million being sold in the area between February and May this year according to Linda Killick of Pam Golding Properties.

This five-bedroomed home in Constantia is on the market exclusively through Pam Golding Properties, priced at R10.995 million. The recently refurbished home located in a quiet cul de sac not far from Constantia Village Shopping Centre, and offers generous reception areas with excellent flow into a large, private garden with mountain views.

She says that sales were spread across all categories with starter homes selling for about R1-million and luxury homes selling for more than R6-million.

“The highest levels of activity were in the R1-million to R2-million bracket where 14 properties were sold. Another 11 were sold in the R2-million to R3-million price range,” says Killick.

Apparently most of the buyers were either from Somerset West itself or from nearby Cape Town.

“There were some foreign buyers mainly from the UK, Germany and Switzerland and this is hardly surprising as the town has a close-knit German community living there. There were a few buyers from the inland regions of Gauteng who are relocating for professional reasons,” says Killick.

Incandescent bulbs to be banned
Incandescent light bulbs are to be banned in South Africa and all users will have to switch to other sources of light such as the more energy-efficient compact fluorescent bulbs that are considerably more expensive.

The announcement was made by the Minister of Energy Dipuo Peters yesterday. She says quality standards for the more efficient CFLs were being developed so that users would not want to go back to using the incandescent light bulbs.

She says the regulations to ban incandescent light bulbs would be handled through the National Regulations for Compulsory Specification Act.

Eskom has already distributed 43,5-million CFLs to South African consumers. The bulbs use up to 80% less energy than incandescent bulbs. Apparently the CFL project to distribute a bulb to almost every household in the country had cost R573-million and represented the largest campaign of its kind in the world.

Collect service charges from tenants
Property landlords should not let tenants have the responsibility for paying municipal accounts for water, electricity, refuse removal and sewerage because they could end up with huge outstanding bills when the lease comes to an end.

This is the view of Michael Bauer, general manager of Cape-based property management company IHFM who says that if the account is controlled by the managing agent or the landlord then they can pick-up any non-payments immediately.

“This allows the landlord or managing agent to monitor the account and make sure that it is paid each month so that there are no outstanding arrears when the lease is terminated,” he says. He says that another way of resolving non-payment issues is for the owner to install prepaid meters on the property to ensure that consumers pay for the water and electricity they actually use.

900 homes illegally occupied
More than 900 RDP homes were illegally occupied by residents of Eden Park in Alberton and now the Gauteng Department of Local Government and Housing says it will support a court application to evict the illegal occupants.

Housing MEC Humphrey Mmemezi told residents that there had been numerous attempts to evict the illegal occupants but that the department would now sign an affidavit to support a mass eviction order that is being sought from the Alberton Magistrate’s Court.

Hundreds of beneficiaries – who were legally entitled to move into the houses – had approached the Public Protector’s office and Gauteng Housing Department and the South African Police Service to get the illegal occupants evicted from “their” homes.

Property 'going green' in SA?
More and more people the world over are acting on the awareness that the planet’s resources need to be preserved and protected more so than ever before, a philosophy which has spilled over into the property arena.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that the US is one of the leaders when it comes to designing and building green homes. “In fact, up to 70% of the buyers in the Generation X group in the US indicated that they would be willing to pay more for houses that incorporate green technology in the design,” he says.

Added to this, the 2010 National Association of Realtors Home Buyer and Seller survey indicates that environmentally friendly features remain a significant factor, with 88% of buyers saying that heating and cooling costs were important, while 71% desired energy efficient appliances and 69% wanted energy efficient lighting.

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