President Thabo Mbeki's advisory council on electricity has warned that if consumers don't further reduce power usage, there could be a shortfall in coming weeks.
Sunday, June 29, 2008
Electricity shortfall looming
Petrol breaks through R10
The retail price of petrol will increase by between 75 to 81c a litre next week, says the DME.
PE getting luxury development
PE getting luxury development
2008/06/27
Port Elizabeth and Perth, Australia, are joining forces and spending R300m to develop 45 luxury residential units.
The Jutland Point development is a partnership between Len Whittal, a native from the Eastern Cape, and Ian McDonald, a property developer from Perth, who together own 4Front Investment Holdings.
It will be 4Front's fourth development in Port Elizabeth, apart from its retail properties and office and storage developments in Deal Party, Groenbossies and Newton Park.
During the launch in Port Elizabeth, MacDonald said they are positive about the future of the metro and will be investing R500m in the city's property market over the next two years.
Investors will be paying between R4m and R20m for a unit in Jutland Point. The sizes of the units range from 110sq m to 346sq m.
Every unit will have a view of the harbour, city and Baakensvallei and have at least one private balcony.
The 13-storey building has two parking levels. Additional features include a diesel power generator, broadband internet access and CCTV cameras.
MacDonald says the development will be completed before the start of the 2010 Soccer World Cup.
The developers say Jutland Point will have some of the most luxurious units that Port Elizabeth has ever seen. This development will breathe new life into the historic CBD.
Jutland Manor on the premises, which used to be a famous restaurant and dates back to the 1920s, will be retained.
Jutland Point will be covering 30% of the premises, while the rest will be rehabilitated by planting indigenous plants, MacDonald said.
Asked why such a development was undertaken in Port Elizabeth, Macdonald said: "Why not?"
The city reminds him of Perth 10 to 20 years ago.
"Port Elizabeth is ready for investment and development. It will soon have two operating harbours and receive unmatched publicity during the Soccer World Cup in 2010. Several companies also export successfully from here, and there are nature reserves, beaches, as well as colourful people and cultures." – Riana de Lange, Sake24
Jhb development launching 28/6
Jhb development launching 28/6
2008/06/27
A new African-Contemporary-style development will be launched on 28 June 2008 in the south of Johannesburg.
Stone Quarter will be located in Eye of Africa, a 677 hectare golf estate in Alewynspoort.
The masterplan for Eye of Africa offers potential homeowners the choice of either free hold stands where they can design and build their own homes or to purchase in a sectional title village designed to meet the estate's architectural guideline and standards.
Stone Quarter will host 230 two and three bedroom townhouses ranging between 144sq m to 204sq m.
The architectural style includes raw materials to ensure a design completed with features including stainless steel Miele ovens and hobs, granite kitchen tops, low voltage lighting, lock-up garages, private pools and water features offering.
Community life in Eye of Africa include a café, the village green, kids' club, running and cycling trails, landscaped parks and a community centre.
The development is within phase one of the Eye of Africa development with Stone Quarter prices ranging between 1,3m to 1,8m and is set for completion in 2009. Stone Quarter will be launched on 28 June.
For more information contact 011 469 1330 or click here to visit the website.
Jhb development launching 28/6
Is it time to fix mortgage rates?
Is it time to fix mortgage rates?
2008/06/27
After ten consecutive interest rate hikes, homeowners are finding it difficult to meet their repayments. Many are considering fixing their rates to hedge against future hikes. Bond Finance expert Ian Wason says one should consider all the options before going out and looking for a fixed mortgage rate. 
"Debt consolidation, remortgaging and reducing other monthly expenses should be looked at before people decide to fix their rates," says Wason. "We are seeing a lot of opinions as to where interest rates are going at the moment. These are just opinions, as nobody really knows. We are seeing a lot of 'false horizons' as to where of the top of the interest rate cycle is, purely because we have no idea where oil and food prices will go, and this is now what is causing the inflationary pressure, not the demand side driven by easy credit. "
"It was the combination of negative equity and a stalling economy that sent the UK property market down 35% in the early nineties. I believe the problems in SA at the moment are on a similar scale," he says.
Homeowners must not forget that the chances are they could rent the same property for less than half of what they are paying in mortgage repayments on a 100% mortgage.
Don't follow the trend if you can counter the knock
"While rates are rising at a speed that is crippling, it is important to remember that you don't have to stick with the rate that you got at the start of your current mortgage," says Wason. "So, after you have had your mortgage for a while you may be able to negotiate a better interest rate because you could be a far less risky client to the bank. If you fix your rate now, you may be negating the benefits that a variable rate would allow in the long term. It is important that you shop around for a better rate on your current mortgage before joining the wave of fixed rate enthusiasts."
In addition to this, he says the individual should also do a complete analysis of their expenses and try to reduce their insurance, bank and medical aid costs.
Remortgaging could be a better option, so shop around
Wason argues that while a fixed rate may be worth your while for the next 18 months, it is important to remember that your mortgage is going to last at least 20 years. In that time, you may well be able to negotiate a better rate on your bond as your salary increases or your reduced risk profile starts to take effect.
"South Africans need to get far more dedicated to shopping around for a better rate – they would be surprised what they could be saving themselves."
A Fixed rate could just cost you
He adds that going out and seeking a fixed rate mortgage can be costly because nobody knows how long the rates rise is going to continue. "While the mood at the moment seems to suggest that we should all go out and fix our mortgage rates, it is important to view this in light of your own situation."
"If you could be getting a better rate on a variable bond, you are better off trying to negotiate that. Don't simply call up and ask what fixed rate the bank could offer you."
Looking at the numbers
For a R500,001 mortgage, where your loan to value is less than 80%, you can currently fix your rate for the following rates: 
For the same mortgage on a variable rate you should be getting a rate of Prime less 2% = 14% (with an interest rise of 1% scheduled in on Thursday) therefore your repayments are R6,217.63.
Another option would be SA Homeloans' interest only rate of 13.5%, giving you a repayment of R5,995. This is the lowest monthly commitment, but remember that you are not paying off any capital.
What should you do?
Wason says it is important to remember that everyone's situation is different. No option is best for everyone so you need to do your own budget, establish what your priorities are and take the mortgage that best suits your situation. Also remember that you can always change your mortgage product again, as you may decide to get an interest only mortgage, ride our these stormy times and switch back to a capital and repayment mortgage once interest rates start coming down or when you can afford to pay more in.
For more information contact ian@bondbusters.co.za. Click here to visit the website.
Is it time to fix mortgage rates?
Banks 'stand up' for borrowers
Banks 'stand up' for borrowers
2008/06/27
Banks have an important role to play not only in getting people into houses, but also in keeping them there, which is why they have been prepared to make some "tough calls" lately that could quite possibly lose them a substantial amount of new business.
Such calls include the controversial decision to re-introduce the deposit requirement for home loan borrowers.
Following on the heels of 10 consecutive interest rate rises and the introduction of the National Credit Act (NCA), the deposit requirement is likely to further reduce the number of potential buyers able to qualify for a home loan, "but is still considered necessary now to ensure that our customers are not exposed to over-indebtedness", he says.
Speaking at the Homenet real estate group's national conference recently, Luthando Vutula, the new head of home loans at Absa, said the bank believed that by doing this, it would assist customers to make better buying decisions because they would have to contribute financially themselves if they wished to go ahead with a purchase.
"And while we all breathed a sigh of relief earlier this month when the Reserve Bank confirmed a 50 basis points increase in the interest rate, we can't afford to assume this is the last increase we're going to see this year. As a responsible lender, we also need to ensure that customers buying homes today have enough room in their budgets to weather the storm of possible future interest rate hikes."
Looking ahead, he told conference delegates the next two to three years would see all players in the real estate industry having to innovate new ways of making money "while protecting our customers from short-term impacts that could derail their long-term investments".
Meanwhile, he said, now was the time for serious property investors to start shopping around. "The best time to buy will be in 2009," he predicted.
"Patient investors will then be spoiled for choice and will be able to build a portfolio that will yield good results in years to come."
In addition, he said that buying a home remained the single most important purchase any individual could make.
"While the dynamics of the real estate sector may have changed since the boom years, a home remains a good investment that sets the foundation for wealth generation. At the moment, buyers may just have to adjust their expectations and start with a smaller home to ensure future affordability. Then when the cycle turns they will be in a position to upgrade to something closer to their original aspirations."
For more information contact Martin Schultheiss on 031 266 9850 or click here to visit the website.
Banks 'stand up' for borrowers
Tuesday, June 17, 2008
There are positives in every market
It's time for consumers to stop focusing on the immediate problems in the real estate sector and start focusing on the bigger picture.
So says Berry Everitt, managing director of the Chas Everitt International property group, who notes: "Homeowners and sellers are currently preoccupied with a possible decline in prices but they need to realise that this is part of the perpetual economic cycle, in which the prices of all commodities – including property – go up, go down and then go up again."
He points out that homeowners who bought their properties five years ago and held them today have an asset that is worth at least 100% more than they paid for it, "so if they have to sell today they may not get what they would have got last year, but it is highly unlikely they will actually lose money".
On the other hand, they may be able to upgrade for less than it would have cost them last year. And if they continue to hold their property, they will derive more benefits when prices start to rise again.
Meanwhile, such owners may also have had the opportunity to utilise some of the increased equity in their properties to improve their lifestyle. "They may have chosen to further their education, perhaps, and got a better job as a result. Or they may have used the money to buy another property and increase their asset base. These are the sort of benefits to be derived from the upward part of the price cycle.
"But rising prices are dependent on demand, and that tapers off at a certain level due to lack of affordability. To enable new buyers to enter the market and keep the economic cycle going, prices have to come down or at least level off at some point. This is where we are now, and from a seller's point of view, SA is a great place to be, because it has one of the few real estate markets in the world where there are literally millions of potential buyers champing at the bit to become homeowners."
Indeed, a recent survey conducted by Markinor for the Reader's Digest shows that more than 50% of South Africans rank owning their own home as their most important life goal, "which means that there is actually a huge market for homes that are for sale, provided they are pitched at the right price".
This is, he says, just one of the opportunities inherent in the downward phase of the economic cycle. Another is that higher interest rates at the moment are driving up the demand for rental properties and the returns to be made on those properties. "This is of course bringing savvy investors back into the market and as that demand also grows, it will also help to absorb inventory and start creating the conditions for prices to start to rise once again.
"Consequently, we do not believe this should be a time for scaremongering about the current state of the market, because that will keep changing. Instead it is a time to be looking at the bigger picture and finding ways to maximise the opportunities it always presents."
For more information contact Berry Everitt on 011 801 2500 or send an email. Click here to visit the website.
Friday, June 13, 2008
Affordable homeowners shellshocked
Affordable homeowners shellshocked
2008/06/13
The ongoing pattern of interest rate rises is making affordable housing increasingly less affordable, and homeowners in this market sector are financially shellshocked.
The 0,5% interest rate rise announced by the SA Reserve Bank today (12 June) has prompted the head of one of the country's leading developers of affordable housing to suggest that Government should relieve the burden on cash-strapped owners and aspirant owners of homes in the lower end of the market by adjusting the structure of the interest rate system.
"The fact is that the ongoing pattern of interest rate rises is making affordable housing increasingly less affordable," says David Wentzel, CEO of JSE AltX-listed RBA Holdings, one of the foremost turnkey suppliers of fully bonded homes in the lower (R300 000 to R700 000) price bracket.
"Perhaps the time has come for interest rates on affordable housing to be capped so that the collateral damage done to homeowners in the war against inflation is reduced – if not, ideally, eliminated. After all, homes do not contribute to the inflation spiral."
To illustrate his point, Wentzel says today's 0,5% hike adds over R400 to the income required to qualify for a bond on a R300 000 entry-level affordable house.
He points out that, unlike the mainstream residential property market, buy/sell decisions in the affordable housing sector are not dictated by sentiment but by cold, hard economic factors.
"Coming on top of the previous nine consecutive interest rate increases, and given the sharp spiral in fuel and food prices, homeowners in this market sector are financially shellshocked.
"Unless there is a homeowner-friendly change in the interest rate structure I cannot see further rate increases being sustainable in the affordable homes market," Wentzel adds.
He says the impact on RBA Holdings of the persistent interest rate rises since mid 2006 has been cushioned by the fact that the group anticipated it and has systematically reduced the sizes of both the sectional title and freehold homes they offer while, at the same time, increasing the density of units per hectare – thus maximizing the use of land and infrastructure.
Affordable homeowners shellshocked
Pitfalls that can delay transfer
Pitfalls that can delay transfer
2008/06/13
Sellers should be aware of pitfalls and hidden costs which can delay the registration of the transfer of a property.
Bev Nelson of Shepstone & Wylie Attorneys property department explains that if the property is sold with the assistance of an estate agent then the agent will usually provide a general sale agreement, which is required by law. "However, if there is no agent involved, or a specialized agreement is necessary, this will need to be drawn up by an attorney at a cost to the seller, unless the parties agree otherwise," she adds. Using an estate agent also carries estate agent's commission which is normally paid by the seller.
Sellers must be aware of their responsibilities once the agreement is signed and a conveyancer is appointed, advises Nelson. These include:
• The payment of all rates up to the date of transfer If the property is conventional,
• If the property is sectional title, all levies need to be paid up to the date of transfer.
• The cost of an electrical compliance certificate certifying that the property is reasonably safe, plus the cost of any repairs necessary in order for the certificate to be issued. This certificate is a legal requirement.
• The cost of an entomologist's certificate certifying that the property is free from wood-destroying insects (not white ants), plus the cost of any procedures (e.g. tents) necessary in order for the certificate to be issued. This is not a legal requirement however it is usually required by bondholders.
If the property is bonded at the time of selling then that mortgage bond will need to be cancelled simultaneously with the transfer of the property to the buyer. The bondholder will require a guarantee from the conveyancer that any balance owing on the bond will be satisfied on registration. "Therefore the balance owing on the bond will be settled out of the purchase price by the conveyancer before paying the balance of the purchase price to the seller. The seller is responsible for the costs of the cancellation of the bond," says Nelson.
If the property was not bonded then the seller should have the title deed. If the title deed has been lost or destroyed, application can be made to the deeds office for a certified copy. Once the Registrar is satisfied that the deed cannot be found he will issue a certified copy of the title deed which will, for all purposes, be treated as if it were the original. The seller is responsible for the cost of obtaining the copy.
Nelson warns that the seller should be careful to include an occupational rental clause in their sale agreement, as if the transfer is delayed and the buyer moves in, without this clause there will be no occupational rent payable. "Especially since most sale agreements include a clause that the agreement cannot be varied unless it is in writing and signed by both parties."
The seller should also note that the general position is that they will only be paid the purchase price and the risk of the property will only pass to the buyer, on registration of the transfer. However, this will be subject to the terms of the sale agreement, adds Nelson.
Pitfalls that can delay transfer
Wednesday, June 11, 2008
SA housing market still 10th best
SA housing market still 10th best
2008/06/11
Property markets in UK, Canada, New Zealand and Norway are struggling, with SA still the 10th best performing market globally.
South Africa is not the only country experiencing a rapid slowdown in house price growth. A report released last week on global housing markets by British based property group Knight Frank confirms that a number of other countries including the likes of the UK, Canada, New Zealand and Norway have also slipped from double digit to single digit growth territory over the past year.
The report ranks SA as the tenth best performing housing market among 34 countries in first quarter 2008 with growth of 8,8%. That's down from sixth position a year ago when SA house prices were still rising at 13,6%.
Overall global house price inflation came to an average 6,1% in first quarter 2008, down from 9,8% a year earlier. And although global house price inflation continues on its downward trend, there have been a few noticeable exceptions. Five out of 34 countries worldwide are still fetching house price growth of more than 20%, including Bulgaria (31,5%), Singapore (29,9%), Hong Kong (28,8%), Jersey (28%) and Russia (21,7%).
Seven countries have seen house prices dip into negative growth territory in first quarter 2008. These are Israel (-0,2%), Denmark (-0,7%), Japan (-0,7%), Germany (-5,2%), Ireland (-8,8%), Estonia (-10,7%) and Latvia (-20%).
Liam Bailey, head of residential research at Knight Frank, says there is no doubt that the number of markets where prices have fallen has increased. ``A year ago, 35% of the markets covered by Knight Frank's global house price index saw house price inflation in double figures. In first quarter 2008, this proportion had fallen to just 20%.'
Bailey notes that a number of markets have seen a sharp reversal of fortune since mid-2007 on the back of the sub-prime fall-out and the global credit crunch. The UK housing market has been particularly hard hit. In first quarter 2007, the UK was still the tenth best performing market in the world. It has since slipped to 24th position.
Bailey says the UK housing market is experiencing its most significant slowdown since the early 1990's. ``On almost every measure across the prime and mainstream markets and the new build sector, the market has shown worsening performance over the last six months.'
According to Bailey, the weak sentiment in the UK housing market is reflected across the wider economy, with consumer confidence, as measured by the NOP Index, at its lowest level since April 1994. With some regional and local market variations, house prices across the UK have been falling since September, with overall price growth of only 1,1% in first quarter 2008 (11% first quarter 2007). - Joan Muller
SA housing market still 10th best
Monday, June 9, 2008
Gauteng tenants worst defaulters
Gauteng tenants worst defaulters
2008/06/09
11% of Gauteng tenants did not pay rent at all in the first quarter of 2008, as opposed to only 6% of Western Cape tenants. These shock figures were supplied yesterday by the Tenant Profile Network (TPN), a registered credit bureau and developer of the first rental payment profile database of its kind in South Africa.
"Rising debt among consumers, combined with dramatic increases in fuel and food prices, may affect the way tenants pay their rent in the future," says Michelle Dickens, MD of TPN.
The company released statistics from its database which show that in the first quarter of 2008 only 72% of tenants were paying their rent on time. This is up from the last quarter of 2007 by 3%. In spite of the defaults, Dickens believes the increase in paying tenants is good news for the industry. 
Property trends from TPN for the first quarter of 2008 indicate that 28% of tenants are paying late or not at all, this could be a caution to estate agents and property owners.
Dickens says that although consumers are trying to cut their costs by renting instead of buying, the industry still needs to find ways to ensure that tenants pay their rent.
"Credit providers are increasingly critical of whom they take on and estate agents and property owners are now following suit. Property-owners and estate agents need to assess the behaviour profile of their tenants to ensure they will pay their rent at the beginning of the month," says Dickens.
"Although it is not a NCA requirement that estate agents assess the affordability of the prospective tenant - this type of assessment is becoming a best business practice of the industry. It is in the best interests of all parties to assess affordability of the prospective tenant, to ensure he or she is not placed under additional pressure as a result of entering into a lease agreement where the monthly rental is out of proportion to their affordability. Affordability is not measured on earnings alone, but rather the earnings less expenses," she says.
This is not all doom and gloom though, says Dickens, as the more rental agents and landlords that register with a rental payment database such as TPN, the more they can reduce their risk by profiling the tenant before hand.
"Now, agents can spend the first 7 to 10 days of the month focusing on new business and growing the market instead of chasing the 28% of tenants who are bad payers," she says.
TPN has developed the only trusted rental payment profile database of its kind in South Africa and in fact globally that has been profiling tenants for over 8 years. Their database combines information from TPN and other highly valuable sources to provide the most comprehensive behavioural profiles on tenants and prospective buyers in the property industry today.
For more information contact 0861 876 000 or send an email. Click here to visit the website
Gauteng tenants worst defaulters
Property owners: Watch the tax
Property owners: Watch the tax
2008/06/09
Property owners will need to keep their eye on tax changes that kick in at the start of 2009.
As of January 1, 2009 the definition of the dividend paid on property assets will change and this will make a significant difference to the way the secondary tax on companies (STC) will be handled.
Tax partner at Cameron & Prentice Chartered Accountants, David Warneke, illustrates the change by way of example.
"Say a close corporation purchased a building (as a capital asset) in 1990 for R2m. The value of the building on October 1, 2001 (the date on which capital gains tax became effective) was R5m and the value today is R12m.
"If the close corporation were to sell the building today for R12m, distribute the proceeds as a dividend to its members prior to January 1, 2009 and then deregister, the STC would be worked out on the post-2001 portion of the increase in value - that is, on R7m," he says.
Were the proceeds to be distributed after January 1, 2009, the STC would be calculated on the total gain - on R10m - resulting in additional STC of R272,727, assuming that there are no other reserves in the close corporation.
Many investors have utilised trust structures as a shelter against tax.
Warneke says that properties which are directly owned by a trust will not be subject to the same legislation. However, if the trust holds a controlling interest in a company or CC, which in turn owns a property, then this will be subject to the tax.
With this change in the way that gains will be treated, property owners will need to take a decision on which way the property market is headed.
Recently released poor figures relating to the residential property market and warnings from the head of a major real estate agency may encourage highly geared investors to consider exiting these positions.
Property investors should take into account the tax implications and make a call on their exposure to the market. - Marc Ashton, Fin24.com
Property owners: Watch the tax
Friday, May 30, 2008
Caution in market good for rentals
Caution in market good for rentals
2008/05/29
The effects that South Africa's rising cost of living and high interest rates is having on the property market's residential sales is no secret.
Sentiment has shifted from confidence to caution, however, the effects have been positive in the residential rental market.
"Potential home buyers are renting, placing their home-buying decisions on hold due to the diminished affordability of property. They want to observe what is happening with interest rates before they consider purchasing property. Therefore, the demand for rental properties has escalated dramatically," says Marsha Haupt, sales director at Betterbond.
Marsha notes that the first edition of the FNB Residential Property Barometer for the rental market in the first quarter of 2008 shows a positive picture of the rental market when compared with the main FNB Residential Property Barometer for the home buying market.
The FNB barometer also shows that on a scale of one to ten, the activity in the home buyers market is at a mediocre level of around 4,96, whereas the rental market's activity is above average at 8,4.
According to FNB Home Loans property strategist, John Loos, monthly rental repayments are considerably lower than 100% bond repayments, which make the rental option increasingly popular during these times of rising interest rates.
Investors are now "dipping their toes" back into the buy to let market. This is resulting in the recovery of the rental market.
People who have over-borrowed to purchase homes are experiencing cash flow problems. This has led to luxury or high bonded properties being placed on the market with urgency to sell. "For this reason we are seeing a stabilisation in the property market as properties are placed on sale at more realistic price levels.
"The gap between rental and bond repayment rates in metro areas is approximately 65% of bond repayments," says Haupt.
"Therefore on a bond of R500k, the repayment would be R6,585 whereas rental would be R4,300". In non-metro/coastal areas the gap is about 60%, with reference to the same example, the rent would be R3,900.
Developers are attracting investors with a buy-to-let promise. They assure investors of rental returns, however, it will not materialise if the investor is taking an 80% to 100% bond. This approach will make the developer rich but will most definitely place the inexperienced investor in financial hardship as the rental will not cover the bond repayment.
"In spite of the high interest rates, the slowing price growth is an opportunity for investors with money to buy. Properties are reaching more reasonable price levels and at some point interest rates will inevitably start to fall and prices will once again start to climb, providing good returns for investors," Haupt concludes.
Caution in market good for rentals
Major rate hike shock
Economy
South Africans are in for the biggest interest rate jolt in a decade, as Reserve Bank governor Tito Mboweni considers a 200 basis point hike.
Finance24
Wednesday, 28 May 2008 23:45:00
Saturday, May 24, 2008
Residential building inflation up
Residential building inflation up
2008/05/23
South African residential building costs inflation measured 10,9% in the first quarter, up from a revised 6,8% in the previous quarter, the FNB Commercial Property Finance Residential Building Cost Index showed on Thursday.
The index reflects the average building cost per square metre, as charged by building contractors when winning tenders in the formal residential property sector. It excludes affordable and so-called "RDP" housing.
The average building cost per square metre was measured at R5,864 for the first quarter.
"However, this mild rise from the previous quarter comes at a time when residential market conditions are extremely weak, and contractor pricing power must be low, leading to the belief that input cost pressures are beginning to drive building cost inflation higher," said John Loos, FNB property strategist.
He added that if the uptick was the start of a longer trend, it would add to the woes of an industry already under pressure.
"Rising building cost inflation would probably slow the supply of new stock further," said Loos. - Tiisetso Motsoeneng, I-Net Bridge
Residential building inflation up
Eskom to build R2,9bn power station
Eskom to build R2,9bn power station
2008/05/23
Eskom has announced that it has awarded a R2,9bn contract to a consortium of South African companies to construct the main civil works at Lephalale in Limpopo.
The contract was awarded to the Medupi Power Station joint venture, a consortium made up of Murray and Roberts, Grinaker-LTA Civil Engineering and Concor.
"Medupi is one of the key installations in Eskom's New Build Programme geared towards closing the current supply-demand gap.
"We are pleased with each milestone reached in the project," said Eskom's chief officer for generation Brian Dames.
The Medupi Power Station will be South Africa's first green field coal-fired station to be built in more than 20 years.
It is expected to cost an estimated R80bn to build.
The first unit is scheduled for completion in 2012 with the entire station completed by 2015.
"It will be the biggest dry-cooled power station in the world and will have an installed capacity of approximately 4,800 Megawatts," Dames said.
The contract covers all civil engineering work and construction of roads, drains, foundations, column supports, floor slabs and basements.
Also included a utility spine and connectors beneath an auxiliary bay, the boiler house and turbine hall.
The awarding of the contract followed a thorough tender evaluation and adjudication process.
A number of preliminary steps have already been taken to prepare the ground for the construction of the Medupi Power Station, including the placement of the boiler and turbine contracts. – Luyanda Makapela, BuaNews
Eskom to build R2,9bn power station
Homebuyers baulk at poor security
Homebuyers baulk at poor security
2008/05/23
Inadequate security measures are a definite turn-off for prospective homebuyers.
This, says Martin Schultheiss, CEO of the Homenet estate agency group, is becoming more evident as suburban homes have to compete with secure complexes and gated estates in an increasingly softer property market.
"Good security has become one of the prime criteria among homebuyers and homes with inadequate security measures are being punished by the market," he says.
Most buyers prefer a home with security in place and are not keen to buy property where they would need to install alarms, burglar bars and other deterrents.
"Apart from the additional costs they would incur to install protection, most are not willing to move into an unprotected home, even for a short while," Schultheiss says.
"And buyers who are prepared to install their own security are increasingly driving a hard bargain when it comes to making an offer to buy. They are calculating the likely costs of top-of-the-range measures and insist that sellers subtract the total from their asking prices."
Buyers are also no longer convinced by arguments that certain residential areas are relatively "safe" or "crime-free" and any owner contemplating selling his home would be well advised to update security.
"It is also important for security measures to be clearly visible. At a minimum this includes burglar bars, security gates, security lights and preferably an alarm system."
For more information contact Martin Schultheiss on 031 266 9850 or click here to visit the website.
Homebuyers baulk at poor security
Land claims to miss target
Land claims to miss target
2008/05/23
The department of land affairs is going to miss its target of finalising all outstanding land claims by the end of this year.
Minister Lulama Xingwana admitted this in Parliament on Wednesday when she spoke in an extended committee of the National Assembly in the debate on her departmental budgets.
She said the commission for the restitution of land claims had settled more than 95% of total claims lodged, and was left with 4,998 very complex rural claims.
"A number of challenges are still confronting us in the finalisation of the outstanding land claims," she told MPs "As a result of these challenges, between 2% to 3% of these claims may not be finalised in this financial year."
The challenges she said included cases in the land claims court, and others disputed with landowners around land prices and the validity of the claims. There are other claims held up because of disputes around traditional leadership and boundaries, and because of community and family disputes.
The commission, she said remains committed to ensuring that all land claims are eventually settled, and to that end, a memorandum and an action plan for the finalisation of the outstanding claims had been submitted to Cabinet.
"The economic models for settling forestry claims and claims with mineral rights (for example Anglo American, Sappi, and Mondi) are in the final stages and should also assist in addressing some of the more challenging claims. We are working closely with the department of environmental affairs and tourism, SANParks and other agencies towards the finalisation of co-management agreements for the claims on protected areas." - Michael Hamlyn, I-Net Bridge
Thursday, May 22, 2008
Consumers defining fractions market
Consumers defining fractions market
2008/05/22
The fractional ownership market in South Africa is being driven by consumer demands, not by the promoters, and the projects that will emerge victorious will be those that cater for what consumers are looking for. So says co-founder of fractionalownership.co.za and member of the South African Association of Fractional Intermediaries (SAAFI) Working Committee, Dirk Wilson.
"It really boils down to what service levels the South African consumer expects from a luxury lifestyle investment such as fractional. When they arrive at their fractional holiday home at Pinnacle Point or Zimbali they expect a hotel-style check-in, cleaning services and check-out facilities. Everything must be of a very high standard in terms of value-added on-site services - for example, being able to phone down to reception and book a round of golf or organize fresh towels for the morning. They can't just arrive at a game farm, be pointed 2 km down the road, given their keys, and told 'There's your bush lodge, see you in a week!'."
Wilson explains this trend of consumer control further: "There are many resort developers who are looking to do mixed-use developments, and they want fractional to be a component. Undoubtedly the on-site hospitality provider is the most intricate part of making a successful project – those who do not have a specialized hospitality or hotel operator on the resort and don't have the standard of say a Three Cities or Legacy, have to provide an equivalent standard - because this is what the market expects. Many developments just don't have the infrastructure to be able to provide this standard.
"Many leading fractional promoters now are only taking on properties where there is a leading hotel operator at that resort, since the market demands it. Feedback from the recent World Fractional Ownership Conference in San Francisco, USA, is also that by far the most successful fractional ownership resorts in the USA are those serviced by the likes of Marriott, Hyatt Hilton and Fairmont, and the South African market is following suit. It is mirroring what is happening in the USA – where they have 8 years' more experience in this arena than us - and we see it as a good sign that our market is aspiring to live up to that same standard of shareholder hospitality and exchange."
He says that feedback from consumers that have bought fractional indicates is that their experience of top-notch services is the defining factor that really makes their purchase worthwhile. "Fractional ownership should equal shareholder hospitality and comfort – and this is a reality that developers have to face. We endorse this and aim to educate potential players in our regular workshops of what logistics they need to provide in order to roll out a successful fractional ownership resort."
fractionalownership.co.za holds workshops every 2 months – one each in Cape Town and Johannesburg, the next scheduled for mid-June. Says Wilson: "We are happy to assist the developers and service providers. We see many at our workshops that would like to do fractional because it adds value to their entire development, but they have to be able to live up to what the consumer expects from their purchase." He adds that he is now seeing many players from the financial sector attending the workshops – since their clients want to know whether they should buy shares in fractional, a trend once again driven by the consumer.
To book for the workshop or for any enquiries contact Dirk Wilson on 072 591 0582 or 021 556 5064, email www.fractionalownership.co.za or click here to visit the website.
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Consumers defining fractions market
Nelspruit gets virtual office park
Nelspruit gets virtual office park
2008/05/21
A new virtual office park was established in Nelspruit for businesspeople and entrepreneurs in need of temporary office space.
Central Park has offices that are available for a few hours, a few days or on a regular weekly or monthly basis and the tariffs ranges from R200 per day.
John Powell from JD & Associates, the developers, says the business park is affordable to all types of businesses.
"Clients can rent a desk, a conference room or a hall, with broadband internet access, telephones, printers and reception facilities," he says. – Sake24
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Nelspruit gets virtual office park
March build plans passed drop 18,5%
March build plans passed drop 18,5%
2008/05/22
The value of South African recorded building plans passed at constant 2000 prices in March decreased by a telling 18,5% year-on-year (y/y) from a revised down 1% in February (previously down 11,1%), Statistics South Africa (Stats SA) data on Wednesday showed.
Residential building was the culprit as it recorded a 23% fall, while non-residential building was up 2,6%, but additions and alterations fell 20,7%.
That is the biggest fall in residential building since the –19,1% recorded in November 2007 and comes after an 8% increase noted in February.
The value of recorded building plans passed by larger municipalities at current prices during the first quarter of 2008 rose by 7,3% y/y compared with the first quarter of 2007. Two of the main categories of buildings contributed positively to this figure - non-residential buildings (18,7%) and additions and alterations (16,4%), Stats SA noted.
Building activity has come under a significant amount of pressure due to slowing housing demand and electricity shortages and delays in plans passed, and this is expected to continue. – I-Net Bridge
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March build plans passed drop 18,5%
Wednesday, May 21, 2008
Oil breaks through $130 barrier
Oil breaks through $130 barrier
May 21 2008 1:07PM
London - Oil climbed to a life-time high above $130 a barrel on Wednesday, driven higher by a combination of long-term production worries and a near-term focus on tight fuel stocks.
Oil breaks through $130 barrier
Firms reined in with property deals
Firms reined in with property deals
2008/05/21
Companies that get involved in property transactions cannot try to wiggle out of the deal at a later stage by assigning unreasonable interpretations to stipulations in the purchase agreement.
This unanimous verdict by five judges in the court of appeal is one of many in the last few months whereby the court issued a warning that property buyers and sellers have to strictly abide by the letter of their agreements.
Many sellers attempt to free themselves from a sales agreement, especially when they realise they can get more for the property.
In Mystic River Investment 45's case, over which the judges presided, the company sold an extremely precious piece of land in Springfield Park, Durban, for R12m to the closed corporation (CC) Koumantarakis Group.
One of the conditions in the buying agreement was that the CC should issue a guarantee of payment to Mystic "which should be satisfactory to Mystic".
The guarantee eventually issued via a bank contained words stipulating that the bank reserved the right to rescind the guarantee.
Mystic then rejected this guarantee and cancelled the transaction because it wanted an "irrevocable" guarantee.
During this time the property was again on the market, but at R2m more than what the CC would have paid.
However, appeal court judges C. Howie, I. Farlam, M. Navsa, F. Kgomo and N. Mhlantla unanimously rejected Mystic's actions and said the agreement contains no stipulation that the guarantee has to be "irrevocable" – only that it needs to satisfy Mystic. "If Mystic had an irrevocable guarantee in mind, it should have made specific mention of it in the purchase agreement."
Mystic was therefore not entitled to reject the guarantee that the CC provided and the transaction should now – after hundreds of thousands of rands in legal costs – take its due course. – Philip de Bruin, Sake24
1% June interest rate rise likely
1% June interest rate rise likely
2008/05/21
With April's rate of inflation having straddled the double digit barrier and apparently still unchecked in its upward trend, expectations of a 1% rate increase at the next Monetary Policy Committee (MPC) meeting on June 12 have firmed, according to a media release on property news website www.rodneyhayter.com.
Motivation behind such MPC boldness – it would be the first full percentage point increase since September 2002 – lies in the belief that the size of increase could deliver a knock out blow to less serious credit lending, according to Jeanne van Jaarsveldt, RE/MAX of SA finance and marketing director, who believes the MPC has little left in its armoury to rein inflation back into its target band of 4% to 6%.
Efficient Group chief economist Dawie Roodt also believes the MPC is now ready to try its hand with more psychological tactics when it reviews the increasingly bleak inflation situation in June.
Roodt points out that the Reserve Bank has a double role – "firstly to control inflation and secondly to curb inflation expectations", which he believes could prove effective with a 1% rise.
Bad news definitely for a property market already wilting from nine rate rises in the last 24 months and other extraneous, but equally sentiment damaging factors, but Roodt and Van Jaarsveldt believe an iron fist approach could serve a big enough market blow for the MPC to exclude further increases for the rest of the year.
According to van Jaarsveldt the size of such an increase would further dampen the property market, "but if it proved effective in arresting the need for further hikes then we could expect to see some restoration of market sentiment toward the end of the fourth quarter".
But Roodt only expects the gloom to lift early next year with conditions getting a little worse between now and then, pointing out the inevitable time lag between rates falling and a restoration of confidence in credit-driven home buyers.
Some cheer filtering through is the gathering attractiveness of investment activity, but the real opportunities, according to Roodt, are still a few months down the line when the market tightens further and especially if the MPC breaks the trend with a 1% hike, which John Loos, property economist at FNB, strongly discounts, given the MPC's stated reluctance to increase rates further.
"In fact, the MPC were even talking about the possibility of a quarter percent rise instead of a half percentage point at it's last meeting."
Loos strongly discounts the MPC resorting to any radical interest rate adjustments even if inflation data continues to deteriorate. Supporting Loos' view is the fact that the current key inflation drivers – oil and food prices – are essentially out of the MPC's sphere of direct influence.
John Roberts, managing director of mortgage originator Bond Approve, also discounts any drastic rate adjustments by the MPC. His view is based on the historical rate adjustments by the committee and the fact that inflationary drivers are largely out of the MPC's power.
However, he does see the probability of a further rise as does Absa's economics department who notes that March's jump in Private Sector Credit Extension (PCSE) to 26,6%, while not a deciding factor for the MPC, is a further disappointment following poor inflation numbers earlier in the month, believing it is unlikely that the slowdown in the real economy will allow the inflation-targeting SARB to leave rates on hold at the 12 June MPC meeting.
Tuesday, May 20, 2008
Road upgrade contractors announced
Road upgrade contractors announced
2008/05/19
The South African National Roads Agency (SANRAL) on Thursday announced details of the contractors awarded the seven contracts for the first phase (125,5 km) of the Gauteng Freeway Improvement Project (GFIP), amounting to a total of R11,5bn.
Siyavaya Joint Venture, led by Group Five (GFI), was awarded Work Package A* (18 km), consisting of N1 section 20 between Golden Highway and 14th Avenue (17 km); and N12 section 18 between the Diepkloof interchange and the M1 interchange (1km); as well as Work Package E (16 km), consisting of N3 Section 12 between Old Barn (Heidelburg Rd) and Geldenhuys (M2) interchanges (12 km) and N12 Section 18 between Reading (R59) and Elands (N3) interchanges (4 km).
GFI Contractors Joint Venture, comprising WBHO (WBO) and Senyati Construction, was awarded Work Package B (21 km), consisting of the N1 Section 20 between the 14th Avenue and Buccleuch interchanges.
GLMB Joint Venture, led by Aveng (AEG), was awarded Work Package C (23 km), consisting of the N1 Section 20 & 21 between the Buccleuch and Brakfontein Interchanges; as well as Work Package F (17,6 km), consisting of N3 Section 12 between Geldenhuys (M2) and Buccleuch Interchanges.
Basil Read Joint Venture (BSR) was awarded Work Package D (15km), consisting of N1 Section 21 between the Brakfontein and the R21 interchanges (10km) and the N1 Section 21 between the Atterbury and Proefplaas (N4) interchanges (5 km).
CMC joint Venture was awarded the upgrade of the N12: Gilloolys to R21 (10km), consisting of N12 Section 19 between the N3 (Gilloolys interchange) and the R21 interchanges (10km) as well as works on the N3 Section 12 between the N12 (Gilloolys interchange) and Modderfontein interchange (partial upgrading).
Upgrading of the freeway sections will take place over the next 36 months, with the works having been prioritised to be substantially completed for the 2010 World Cup.
The project will involve provision of additional lanes; interchange improvements and intelligent transport management systems, including cameras, ramp metering and electronic signage. – I-Net Bridge
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Road upgrade contractors announced
50% drop in WC show house visitors
50% drop in WC show house visitors
2008/05/20
The average number of interested buyers attending show houses in the Western Cape has plummeted with 50%, while the show house property stock has increased with 25% compared to the previous year.
According to statistics derived from House Finders' data tracking 13 Western Cape real-estate companies' show house exhibitions, there has been a 22% year-on-year (y/y) increase when comparing the first quarter of 2007 with the first quarter of 2008.
However, more stock means more options for buyers, and the spill-over is a decrease in buyers visiting show houses.
Commenting on this development by analysing show house trends in Cape Town's southern suburbs, Jeanne van Jaarsveldt, RE/MAX of SA finance and marketing director, said there was a 50% drop in buyers visiting show houses over the last few months.
"A year ago the average number of buyers visiting a show house was between 15 to 30, with homes in middle price brackets being the most active. We are now seeing between 4 to 12 visitors coming to show houses over weekends," he said.
"The most active price brackets are in the Plumstead area where buyers have an interest in properties between R900k and R1,3m. In the South Peninsula the average price is R750k to R1m, while in the South East Peninsula, the majority of buyers are looking for properties under R750k," says RE/MAX Elite broker and owner, Alan Burgoyne.
"Bergvliet and lower Constantia have the most active show houses, which are in the vicinity of R2m plus."
But now, negative reports about increased crime at show houses, which circulated in the media last week, can further negatively affect attendance figures.
Western Cape media reports of increased crime activity targeted at estate agents, specifically during weekends at show houses in the Southern Suburbs, have appeared recently.
"With the number of houses for sale increasing dramatically over the recent months, the majority of serious sellers recognise the important role show houses play in ensuring that their homes are viewed by the maximum number of serious buyers," says Van Jaarsveldt.
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50% drop in WC show house visitors
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Monday, May 19, 2008
Show days 'dangerous' for agents
Show days 'dangerous' for agents
2008/05/17
Lately show houses have been an easy target for criminals, and with the glut of properties for sale now there's plenty to choose from. An agency group has published guidelines for its agents on how to protect themselves and the seller's property.
Lately show houses have been an easy target for criminals, and with the glut of properties for sale now there's plenty to choose from.
Johannesburg estate agents have for some time refrained from publicising the addresses of show houses until the last minute, often preferring to only give out the address to potential buyers after checking them out. An indication of how serious the situation has become was seen on Wednesday, when Rawson Properties announced the launch of a new dossier for its agents that includes information on how to protect themselves. In doing so, they also protect the seller's property, and help ensure the safety of potential buyers when visiting show houses.
While it is now a concern in the real estate marketing sector that open day show houses can be a security risk, it would be a great pity if they were dropped, says Tony Clarke, MD of Rawson Properties, because show days are still effective in selling property fast. The small firms with limited advertising budgets would be particularly hard hit, he says.
Clarke has drawn up three full pages of advice to Rawson agents on how to protect themselves and "keep ahead of the bad guys" in all situations, but especially at show houses.
Some of the key pointers mentioned in the document are:
• On entering a show house for the first time, Clarke advises, the agent should check all rooms and work out the most convenient escape routes, unlocking all deadbolt locks which might slow down an exit. Back doors, although often a handy for an escape, can lead into high walled yards, Clarke warns.
• When visitors arrive, agents are advised to note their car licence place numbers and when showing them the house the agent should walk behind, not lead.
• "Watch what prospects are doing at all times. Do not become preoccupied with viewing the home – and always expect the unexpected," says Clarke.
Clarke also advises agents to notify their office or a friend that they will call every hour – if they do not the colleague should contact the police at once.
"Neighbours should be asked to keep an eye on the property throughout the day. Above all, do not be in the house on your own – have a colleague or friend with you. If you become suspicious of a prospect, leave at once," writes Clarke.
In general, he says, agents should meet prospective buyers the first time in the company offices and then should insist on identification, giving the reason that "it is company policy". He advises them to find out as much as they can about the prospects, such as where they work, what they do, and how much they earn. "Ask many questions and be a good listener."
Clarke warns agents always to use their own car for viewings and to be familiar with the area in which the property is located.
Clarke's document for Rawson agents also includes advice on office safety and harassment, whether by telephone, stalking or direct approach.
"It is regrettable that we have to be aware of these matters," said Clarke, "but it is also true that crime can be prevented by adopting simple precautions. Our industry has an unusual number of women, whom criminals and psychopaths see as soft targets because in this job they have to work away from the security of their offices."
For more information contact Tony Clarke on 021 658 7100 or send an email to research@rawsonproperties.com.
Show days 'dangerous' for agents
Transfer Duty Act briefly explained
Transfer Duty Act briefly explained
2008/05/19
Transfer duty is a form of government tax that was introduced as long ago as the 17th century and is still relevant to most property transactions today.
Transfer duty, not to be confused with transfer fees or costs, is imposed in terms of the Transfer Duty Act ("the Act") and, generally speaking, it is payable when immovable property is acquired.
Transfer duty is payable by the purchaser to the South African Revenue Service (SARS) and is calculated as a percentage of the purchase price. The rates of transfer duty are specified in the Act. If no purchase price is payable or if SARS is of the opinion that the purchase price is less than the fair value of the property, then SARS will calculate the transfer duty based on the fair value.
By way of example, using the current transfer duty rates, which have applied since 1 March 2006, transfer duty payable on a purchase price of R2m is calculated as follows:
- if the purchaser is a company, close corporation or trust, transfer duty is 8% of the purchase price = R160k
- if the purchaser is an individual, transfer duty is:
- 0% on the first R500k of the purchase price (R Nil);
- 5% on the amount from R500k to R1m (R25k); and
- 8% on the amount over R1m (R80k)
- Total transfer duty = R105k
Transfer duty is payable within six months from the date of acquisition. In most cases this will be six months from the date the sale agreement is signed. If the transfer duty is not paid within this time period, penalty interest will be charged by SARS.
In terms of the Act, the Deeds Office is not permitted to register a transfer unless there is proof that transfer duty has been paid or that no transfer duty is payable. This means that a purchaser is required to pay transfer duty prior to the transfer being lodged in the Deeds Office so that the conveyancer can obtain a transfer duty receipt or exemption certificate from SARS for submission to the Deeds Office.
A purchaser does not pay transfer duty in transactions where VAT is payable. This is where the seller is a VAT vendor and the sale of the property is in the course of the seller's business e.g. a property developer. In such instances, the purchaser will pay the purchase price and VAT to the seller who is then responsible for paying the VAT to SARS.
For more information contact 031 570 5300 or send an email.
Transfer Duty Act briefly explained
Friday, May 9, 2008
Middle segment price growth down
Middle segment price growth down
2008/05/09
According to the latest Absa house price index, released on Thursday, South African house prices in the middle segment of the market slowed to a nominal 6,8% year-on-year (y/y) in April from 7,8% y/y in March, taking growth to an eight-and-a-half year low.
This is also the fourth consecutive month of single-digit growth in nominal house prices since a growth rate of 11,2% was recorded in December last year.
The latest price is also the lowest since November 1999, when it was 6,5%, and brought the average price of a middle-segment house to about R974 in April this year.
In real terms, house prices in the middle segment of the market dropped by 2,5% y/y in March 2008, compared with a decline of 0,9% y/y recorded in February, based on headline CPI inflation.
"This was the biggest negative real year-on-year growth rate recorded in house prices since May 1997, when it was at a level of –3,4% y/y, based on nominal price growth of 5,7% y/y, and a headline CPI inflation rate of 9,5% at the time," noted the researchers.
On a month-on-month (m/m) basis, nominal house price growth was only 0,2% in April, unchanged from March. In real terms, house prices dropped by 1,3% in March from February. The real price of a middle-segment house has dropped by a total of R19,700, or 3%, from an all-time high of around R651,500 (at constant 2000 prices) in August last year to about R631,800 in March this year.
"Sharply rising CPIX inflation, currently at 10,1% y/y and mainly driven by international oil prices, rand exchange rate and food price trends, the 450 basis points worth of interest rate hikes since mid-2006 on the back of inflationary pressures, a significant slowdown in growth in real household disposable income in 2007 and the full implementation of the National Credit Act (NCA) in mid-2007, are factors having a negative effect on the affordability of housing," said the researchers.
They said these trends have caused the focus of homebuyers to have shifted from luxury, large and expensive properties to smaller and more affordable properties in recent times.
"As a result of these developments, the downward trend in year-on-year house price growth has accelerated since September last year. With inflation still under strong upward pressure, inflation expectations will remain high over the short term, which will have a significant influence on demands for higher wages this year," they say.
Against this background, the Reserve Bank's Monetary Policy Committee is expected to hike interest rates by another 50 basis points at the June meeting.
In view of these developments and expectations, house price growth is forecast to slow down even further in the rest of 2008 from current levels, says Absa.
Nominal price growth of well below 10% is projected for the full year, with real price growth expected to be in negative territory, which will be the first annual drop in real prices since 1999, when it was -0,3%. – I-Net Bridge
Middle segment price growth down
'No house price recession'
The residential property market faces a mild cyclical downturn, says Standard Bank. The market for cheaper properties has already picked up.
Overpricing is the real culprit
Overpricing is the real culprit
2008/05/05
Sellers, not legislation, nor rising interest rates or estate agents, was cited as an unnecessary major contributor to the residential property market's slowdown.
While it was an undisputable fact that the South African economy had become entangled in the global credit crunch, its effect on the market along with rising interest rates was "being largely overstated", says Jeanne van Jaarsveldt, marketing and finance director of RE/MAX of Southern Africa.
"Undeniably, the biggest sheet anchor on the movement of residential property right now is overpricing and this can be substantiated by the number of sales being concluded after negotiation on price."
According to the FNB property barometer, for the first quarter released earlier this week, the percentage of properties sold at less than asking price was 83% and 82% in the last quarter of 2007.
Van Jaarsveldt insists that it is important that sellers realise the slowdown in the South African property market was a direct result of financial fundamentals of a global nature and not part of a national conspiracy engineered by the Reserve Bank, the commercial banks or estate agents.
To blame the Reserve Bank was unfortunate as it was only exercising its appointed role of controlling inflation through the traditional tool of interest rate adjustments. It was also unfair to fault other market influences, such as the state, banks and estate agents. The reality was that South Africa, just as other international economies, had been snared into the global credit crunch, which was creating uncertainty and grinding down market confidence.
"In New Zealand we have seen residential sales plummet by more than half in the past month over March of last year while Britain's annual rate of house price growth in the first quarter of 2008 was 2,2%, down from 6,9% at the end of 2007. House prices slowed even more sharply in Northern Ireland where the annual rate of appreciation fell from 24,2% to –3,4%.
"Sales have also fallen in the US with prices flattening out while in Australia that country's national estate agent body heaved a sigh of relief almost audible enough to be heard in South Africa after its Reserve Bank held rates steady this month after hikes in both February and March which left home owners reeling from the accumulative effects of the increases."
Van Jaarsveldt urges both sellers and buyers to maintain perspective of the market and particularly it's strengths as opposed to exaggerating its weaknesses, which had become overly fashionable. Of importance, and this only applied to the South African market, was the continued emergence of the black buyer.
"Some commentators believe this source could run for 20 years before a burnout, but the importance of this feature is to understand that its former momentum has only been briefly stalled and will resume once affordability begins to improve among state employees."
Also pertinent, even in the current slowdown, house price growth was still increasing, admittedly of a slower nature. Sales in the lower end of the market were also still active, but to van Jaarsveldt, the biggest indicator underpinning a recovery was the lack of new building taking place.
The pace of new residential developments had slowed markedly with many developers at their wits end trying to successfully mix the cost of new building land and materials with affordability. Further shrinkage in new unit supply was inevitable and this, perhaps more than any single feature, would fuel second hand stock prices unrealistically when the market turned.
For more information contact Jeanne van Jaarsveldt on 021 761 1110.
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Interesting comment but he fails to point out that overpricing can only be in place if estate agents support it. It is either due to inexperienced, unsupervised canditate agents or the greed of experienced agents and the frenetic clamour that is deliberately created by some agents to cause confusion to potential sellers. - Tony Penfold
Overpricing is the real culprit
Tuesday, April 22, 2008
SA property hit by emigration
More SA homeowners are dumping their properties on the market for emigration purposes, with 12% of sellers planning to leave SA, says FNB.
Finance24
Monday, 21 April 2008 14:53:00
Monday, April 21, 2008
Property mkt still 'depressed'
Eighty-three percent of sellers have been forced to accept a lower price, while the average time that a house is on the market has risen to 12 weeks, statistics show.
Property mkt still 'depressed'
Finance24
Monday, 21 April 2008 13:54:00
Consistent sales in Sandton suburb
Consistent sales in Sandton suburb
2008/04/21
Sunninghill falls under the ever-growing Sandton, and is a very convenient locale to enjoy the promising future of a new CBD in the Greater Johannesburg area.
In addition, the following amenities are within easy reach of Sunninghill: Sunninghill Hospital, the Vodacom World of Golf, Montecasino, Fourways Crossing and Mall.
Month-on-month, Sunninghill has seen consistent transactions in the market, having transferred properties every month since January 2005 for both the free hold as well as the sectional title market. The market dropped to record lows of five transactions for free hold. Interestingly, this figure fell in January 2008 the latest recorded amount for the Sunninghill area.
Anne Mendelsohn, Seeff property agent for the Sunninghill area, says the market in Sunninghill is busy from a seller's perspective, "as we have double the amount of properties to sell in the area compared to the number we had last year".
Sectional title has performed marginally better having recorded 13 transactions for the month of January 2008, yet still the current state of the market is applicable to a trend seen throughout Johannesburg's higher-priced suburbs, as sellers are stuck on the market for longer periods than desired. This is due to a buyer's market that is hesitant in view higher interest rates and a post-National Credit Act (NCA) buying environment.
"There are buyers around but they are more particular and with more stock on the market it is taking longer to get an offer. Also, the offers are about 20% below asking price," adds Mendelsohn.
The average amount of transactions, taken on a monthly basis, was 14,54 for free hold and 34,83 for sectional title; these averages were recorded from Deeds Office data over a two-year period. More recent figures show that the number of transactions taking place in both markets are under two-year averages.
Yet the area remains popular with "younger yuppie buyers who either work as accountants or doctors/nurses", says Mendelsohn.
The rolling average, two-year price for free hold amounted to R1,400,278, and the average sectional title unit offering over a similar period was R693,647. The average free hold price can be seen to represent an almost doubling up on sectional title offerings.
In terms of sales revenue, the highest return was in August 2007, which witnessed R54,770,884 in total sales. - James Monteiro
Consistent sales in Sandton suburb
Keep the heat this winter
Keep the heat this winter
2008/04/21
What is Aerolite?
Aerolite is manufactured locally according to technology from Owens Corning Toledo, USA. It is made from pure spun glass, bonded with an inert thermo-setting resin to form a strong, resilient, easy-to-handle blanket.
Aerolite forms a highly efficient thermal barrier which excludes solar heat gain in summer and retains heat generated within a building in winter. It reduces heat flow by up to 87% and can lower the temperature in summer by up to 5°C. What's more, Aerolite's insulation efficiency is unaffected by its orientation to, or the direction of, heat flow. 
Keeping cool indoors when it is hot outdoors is a problem. The sun beating down on our homes causes indoor temperatures to rise to uncomfortable levels. Insulated ceilings reduce the heat flow between the outside and the inside of your home, keeping it warmer in winter and cooler in summer.
In our hot summer months, up to 35% of the heat in your home enters through an uninsulated ceiling. If you have ever been up into your attic during the summer, you know yourself how hot it can be up there. Insulating the ceiling of your home should be a top priority.
Draught-proofing your home will also help keep the summer heat out. For example, seal windows and door bottoms with insulation strips. 
1. Measure the distance between the timber roof trusses.
2. Cut the insulation material - while it is still in the bag - to the correct width to fit snugly in the space between the roof trusses.
3. Roll out firmly between the roof trusses on top of the ceiling.
4. Wrap insulation around waterpipes so that they do not freeze in winter, and we recommend you also wrap the geyser for further savings on electricity bills.
Benefits at a glance:
- 30-year guarantee
- Saves money on electricity bills
- Does not provide sustenance for rats and mice
- Non-combustible
- Contains no asbestos or plastic fibres
- SABS tested and approved (SABS 1381 Part 1)
- Reduces condensation
- Mould-resistant
- Light weight
- Corrosion-resistant
- Maintenance-free
- Sound absorption
- Will add value to your home
- Available in mini rolls
For more information click here to visit the website.
New KZN airports impact property
New KZN airports impact property
2008/04/21
Currently under construction, the King Shaka International Airport and Dube TradePort at La Mercy are already beginning to have a major impact on the property market in the area, with a high demand evident for industrial and commercial land and a growing trend towards those seeking permanent residences on this part of the north coast, says Clive Greene, area principal for Pam Golding Properties, based in Ballito.
"These major projects will provide a huge boost for the local economy and create numerous job opportunities. Currently we are seeing the start of a surge in demand for both commercial and residential property, with an unprecedented demand from developers for land currently being rezoned for industrial use - particularly given the opportunities presented for secondary industries as a spin-off from the airport," says Greene. 
In and around Ballito, the Lifestyle shopping centre has expanded to 30 000sqm while a new shopping centre comprising some 100 000sqm is also planned for the area. In addition, the Ballito business park - with mainly offices, small commercial, light industrial and car showrooms - is well under way with an increasing uptake of space. 
"It's interesting to note how the demand for homes is moving even further north. Blythedale coastal resort has experienced phenomenal sales which will result in significant growth in the Stanger area. In the Tugela River area, where the huge King Shaka statue is to be built, a 7500ha city with 30km of beachfront is in the planning stages - with the involvement of the local community which owns the land." 
In Ballito and the surrounds homes range from one bedroom apartments priced from R950 000 to two to four bedroom apartments on the beach priced from R1.8-R13million. Houses with sea views range from R12-R25million, while at estates - such as Zimbali - where completed units are marketed, prices range from R25 000-R40 000 a square metre. PGP are also currently marketing a luxury five bedroom home in Zimbali at R42 million.
Photos:
1. Zimbali R18,9m: Five bedrooms, five bathrooms, gourmet kitchen, entertainment room, gym, covered patios, heated and cold pool and four garages.
2. Ballito R25m : Caribbean mansion with seven bedrooms and seven bathrooms, an acre of prime land with landscaped gardens and sea views. Includes a gazebo, several entertainment areas, separate guest suite and three staff quarters.
3. Sheffield Beach R25m : Six bedrooms, six bathrooms with free-flowing entertainment areas, two swimming pools and three garages. Situated on the beach with no other houses in sight.
For more information contact Clive Greene at 032 9463430 or send an email.
New KZN airports impact property
'Property market will survive'
'Property market will survive'
2008/04/21
The residential market will remain tough for the next eighteen months, but should pick up by the end of next year when interest rates will probably start to come down.
Despite various unusual factors that together have contributed to the extremely difficult market circumstances, Pam Golding Properties (PGP) chief executive Andrew Golding believes the local property market will survive the storm.
"People forget, but in 1998 the house market was in a similar position when interest rates reached 25%."
A seven-year boom market followed shortly afterwards.
He said the property market was largely driven by sentiment, which would be a key factor in the future welfare of the industry.
Sentiment is taking a knock now because of worldwide fears of a recession amid the sub-prime crisis in the US and the sky-high international oil price.
On the national front it was being influenced by rising interest rates, political uncertainty and the Eskom crisis.
The National Credit Act (NCA) had also had a meaningful impact on banks' capacity to lend money, which hurt the property market.
Consequently, sales volumes were between 20% and 30% lower.
Even though buyers were now in a position to negotiate a more realistic price with sellers, he did not foresee "massive sales".
Some buyers will pay R60m
But while the broader market was affected, he said that houses of more than R15m were in an unusual position and were surprising with continued price growth.
"To pay R40k/sq m for a new house Cape Town and Gauteng is not strange anymore," he said.
Buyers in this category are prepared to pay R60m for a property because they are relatively unaffected by rising interest rates. – Elma Kloppers, Beeld
'Property market will survive'
Buyers adopt new search dynamics
Buyers adopt new search dynamics
2008/04/21
Massive growth in South Africa's real estate sector since 2003, both price-wise and geographically, has resulted in thousands of property shoppers adopting new search dynamics.
Some have done so by choice, says Mike Bester, CEO of Realty 1 International Property Group, while others, on the back of reduced affordability, have had little option.
Both categories, however, stand to reap enormous short, medium and long-term benefits if they've bought in the new "hotspot" areas that are coming into their own around the country, he says.
Among the most obvious of the benefits of buying in such areas is paying less for more.
"Traditionally sought-after areas invariably come with hefty price tags," he says.
"This has spurred home buyers into looking elsewhere, for example on the outskirts of town or in areas they would have sidelined in the past. People are changing their mindsets as they search for better affordability or lifestyles that offer less traffic congestion, crime and grime."
Among the new hotspots on South Africa's real estate radar are farmlands that have now been developed into residential suburbs such as those on the East Rand, little known coastal hamlets and holiday destinations in the Western Cape and the KwaZulu-Natal south coast, and parts of Johannesburg's inner city, where properties are being steadily upgraded by house-proud residents.
Pricing aside, the development and growing popularity of these areas has in many instances been concurrent with the construction or improvement of local roads. "This has in effect brought them closer to town, thereby making commuting far more viable," he continues.
Not only are many of these hotspots becoming residential destinations of choice but they are also being sought-out by entrepreneurs. He bears this assertion out by noting the rise in number of small businesses throughout the country.
Hotspots can be identified by a number of factors, says Bester. They are characterised by a good balance between competitive pricing, steady upward value growth and sales turnover.
"Ideally, one is looking for places that could have lagged behind the national growth average but which is now experiencing better-than-average appreciation."
This information is readily available from professional area specialist, and can be substantiated from driving around the area, counting sold signs and measuring the rate and type of property upgrades.
Also important for a "happening" hotspot is for it to have good access to main roads and freeways as well as amenities, medical and shopping centres and preferably public transport routes, he notes further.
"Buying into a new hotspot could be the answer for purchasers with limited budgets, especially if the property allows for expansion at a later stage," concludes Bester.
"It could also be the solution for existing homeowners struggling with affordability problems. By selling their current properties and moving to a more affordable home or area, they would hopefully be able to use the equity to ease their debt while simultaneously financing a new home and then watching their capital investment grow again."
For more information click here to visit the website.
Buyers adopt new search dynamics
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