Business Day Home Front 04 March 2016

BusinessDay

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FRIDAY, MARCH 4 2016

HOMEFRONT PAGE 2

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WINE: AIDING NATURE WITH INNOVATION

BOND WOES? TRY RENTING TO BUY

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RETIREMENT INVESTMENT OPTIONS

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ARE LAND GRABS ON THE TABLE?

Meet the millennial property buyer Within this demographic there is a culture of ‘don’t call me — I’ll find you’.

Otherwise known as Generation Y, millennials approach things differently.

When and how they invest in property is different too WORDS: NICOLA JENVEY :: PHOTOS: ISTOCK

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CONTINUED ON PAGE 6

LIFESTYLE

Friday March 4 2016

WINE

JORDAN IN STELLENBOSCH

A boom within the gloom?

As harvest 2016 reaches full swing this month, the wine industry has been dealt a double blow: global warming has reduced grape yields and recent fires ravaged prime vineyard real estate. But thanks to some innovative wine makers there is an upside WORDS: ANGELA LLOYD :: PHOTOS: SUPPLIED

“To be successful you need to work, eat and drink wine 24 hours a day. And to experience how a great wine becomes even greater over time is sufficient to put issues such as fires, or for that matter a depressed economy, behind you” Johann Krige, owner of Kanonkop Estate

T

here’s a well-rehearsed saying in the wine industry: to make a small fortune, one should start with a big one. Setting up a winery — planting vineyards, constructing and equipping a cellar — is only the first step. Leaving aside the marketing and sales end of the business, this is nature you’re dealing with. And capricious nature can make a big dent in that fortune.

The Cape enjoys a nearideal climate for vine growing: generally winters are cold and wet, summers sunny with just the odd shower; vintages differ but rarely are the differences extreme.

That is until an El Niño event, generally associated with lower rainfall, as has been the case since last winter.

Drier conditions, exacerbated by higher summer temperatures, have had a generally adverse effect on this year’s wine crop.

VinPro Consultation Service offers services to SA’s roughly 3,500 wine producers.

Manager Francois Viljoen explains: “Heat and drought bring about lighter bunches and smaller berries — even in areas where producers have access to sufficient irrigation water.” So less juice, less wine, less income.

FIRE COST PER HECTARE Added to this, destructive fires which have raged

through much of the Winelands, notably Stellenbosch and Elgin, have caused damage to property and vines, but thankfully, not human life.

The financial cost is not inconsiderable. VinPro economist Andries van Zyl projects these calculations.

“Losing a hectare of vineyard to fire amounts to almost R240,000,” he says. “This includes loss of income, additional labour to uproot damaged vines and reestablishment of vines.”

Van Zyl warns this figure could “vary significantly between vineyards, particularly where they produce acclaimed, premium wines”.

None of this sounds good.

Worse, with fire there’s smoke. And when that blows across the vines and their ripening fruit, it can penetrate the berries, causing undesirable taint, the degree of damage evident only once fermentation is complete, which can take a few months.

Can there be positives?

Of course. “The vineyards and grapes are very healthy.

The smaller berries may also lead to good quality due to concentrated flavour and colour,” says Viljoen.

THINKING CHANGE REQUIRED But thinking ahead and long term is not to be neglected.

Climate change demands

thinking change. A process is already under way, one that’s limited by the necessities of clean vine material and time.

Planting varieties more suited to SA’s warmer climate is slowly taking place — varieties characterised by their heat tolerance, drought-resistance and stable acidity in the face of such conditions.

EXPERIMENTAL VARIETIES Where is SA looking to for these varieties? So far, Italy, Greece, Spain and Portugal.

Nero d’Avola, a major Sicilian red variety; Assyrtiko and Agiorgitiko, quality white and red Greek varieties; Albarino and Mencia, top white and red Spanish varieties. And Verdelho, a Portuguese white grown widely on the island of Madeira, as well as on the mainland. All have been planted in SA, if on a small scale only.

Examples of Nero d’Avola, Albarino and Verdelho are already in the market, while Sadie Family Wines’ Eben Sadie has vinified experimental quantities of the few Assyrtiko, Agiorgitiko and Mencia vines planted in the Swartland.

First cuttings from those Assyrtiko vines will leave the Swartland for Stellenbosch in 2017, where Gary and Kathy Jordan (she’s of Greek heritage) will plant them on a warm, north-facing slope of their Stellenbosch Kloof farm.

LIFESTYLE Friday March 4 2016

But while the Jordans are tapping into underground water sources, they are also devising methods to cut down on its use. Their approach is sustainable to both the environment and to their bank balance.

SA wine in numbers 357 — years of local wine history

60% — winter 2015 percentage reached of usual annual rainfall

SWARTLAND BUSH VINES

15%

— wine-grape producers currently profitable

R240,000

— average per ha cost of a vineyard lost to fire

R6bn

— GDP contribution by South African wine tourism

CLIMATE PLANNING The Jordans are meticulous in their research; their decision to introduce Assyrtiko isn’t based on whim. Detailed records of climate conditions reveal there have been small but telling increases in mean as well as maximum and

minimum temperatures in their area.

Assyrtiko won’t be alone on Jordan; Rhône and Southern French Grenache and Cinsaut varieties will join the viticultural mix. Water is still needed for farming even drought-resistant varieties.

LIFESTYLE RETURNS Wine farming is about more than sustaining bank balances and the environment though; there’s a clear emotional connect with the lifestyle. Fourth-generation owner of Kanonkop Estate, Johann Krige, has this view: “Producing wine is all about passion,” he says. “To be successful you need to work, eat and drink wine 24 hours a day. And to experience how a great wine becomes even

greater over time is sufficient to put issues such as fires, or for that matter a depressed economy, behind you.”

Kanonkop was one of the Stellenbosch farms that suffered fire damage.

Of their 100ha under vine, about 5 to 6ha of Merlot and Pinotage were scorched or burnt — a loss of about 50 tons of fruit. Kanonkop typically harvests close to 1,500 tons. Fortunately their flagship Black Label Pinotage vineyard, now 63 years old, was undamaged.

Wine lovers would find it difficult to consider the Krige family ever selling Kanonkop; a farm regarded by local and international commentators as a Cape “First Growth” estate, whose wines regularly

fetch top prices on auction.

Others are less committed.

Says Chris Baker, Pam Golding Properties’ agricultural agent in Stellenbosch: “The availability of farms has, in our view, remained fairly stable, despite a perception that there are more farms on the market.

There are many farms on the market at any given point because it takes a long time to sell a farm.”

SA is currently celebrating its 357th harvest. With many international commentators describing South African wines as some of the most exciting in the wine world, that heritage is unlikely to disappear, despite climate change, fires or difficult economic conditions.

7% — annual growth of South African wine tourism

R15bn

— South African wine tourism growth potential by 2025 Source: VinPro and WOSA

KATHY AND GARY JORDAN

WINE MAKER EBEN SADIE

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FINANCE

Friday March 4 2016

Show me the money Tired of paying rent with no assets to show for it? A rent-to-buy system may offer a practical solution to help first-time homeowners on their way WORDS: NICCI BOTHA :: PHOTOS: ISTOCK

Y

ou have found your dream house; the offer to purchase is a done deal. Now all you have to do is persuade a bank to lend you the money. Given the current economic climate, banks are more jittery than ever about lending to first-time homebuyers. If you don’t have a deposit or there is a spot on your credit record, your chances of getting approved are even slimme.

The recent hike in interest rates also put extra pressure on “affordability” to qualify for a home loan. In fact about half of first-time home loan applications are turned down for these reasons.

TRY PLAN B The rent2buy concept was developed by property lawyer Meyer de Waal, as an alternative for buyers eager to get a toehold on the property ladder sooner rather than later.

In this case a buyer who has been turned down by the banks — but who may qualify for a home loan in the future — rents the property from the owner for a fixed time frame (between six months and two years) with the intention of purchasing it at the end of that period.

It works best for an investment property being

sold by the owner, or for a property developer, where the seller is willing to wait for a prescribed period before the sale goes through. However De Waal says it can be applied to any type of transaction, including commercial properties. “This is plan B and an awesome opportunity for first-time buyers who have been turned down by the banks,” he says.

HOW IT WORKS With rent2buy, the buyer has breathing space to improve his credit rating, if that is the reason why the loan was turned down. In addition, the rent2buy rental is about 3-4% more than the going rentals for the suburb in which the renter intends to buy (it is usually close to a normal bond repayment). This extra portion of the rental is credited towards a savings account for the potential purchaser to build up a deposit.

The rental period also gives the potential purchaser a test run at dealing with the realities of being a homeowner, as they take over all the associated responsibilities — such as rates, taxes and maintenance.

“Anything can happen over six to 24 months, while the first-time buyer is waiting to

enter the market. Interest rates or house prices can skyrocket. This puts owning a home further out of reach.

So part of the beauty of the programme is that the purchase price is usually frozen at the original amount, unless the term is longer than 12 to 18 months, to be fair to the seller,” says De Waal.

BREAKING DOWN THE COSTS If one was to take a typical property worth R1m, it would be rented out for R7,000 a month. The landlord carries the expenses of rates, taxes, insurance, levies and maintenance — in total about R1,000 — and ends up with R6,000 a month in his pocket.

But as part of the negotiation the rent2buy tenant offers a higher income with a rent2buy rent, close to a home loan repayment based on the purchase price — say R10,000 a month for a R1m property. The tenant also takes over R1,000 of expenses (rates, levies etc). And so the seller has a much improved cash-flow during the rent2buy term: an additional R3,000 and R1,000 of expenses. That is a R4,000 improvement.

Meanwhile the rent2buy tenant “tests” his affordability capacity to pay back a bond and own a property in real circumstances.

“To assist the purchaser in saving towards a deposit — the third leg of raising a home loan, after credit profile and affordability — this ‘extra’ portion of the rental is credited towards a downpayment of the purchase price”

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To assist the purchaser in saving towards a deposit — the third leg of raising a home loan, after credit profile and affordability — this “extra” portion of the rental is credited towards a downpayment of the purchase price. In this instance, after a year, the potential buyer has 12 months of R3,000 — totalling R36,000 — saved as a deposit.

EDUCATING THE BUYER Possibly the most valuable tool offered in the rent2buy process is the education component. De Waal is passionate about helping people buy their first home.

By teaching them to manage their budget during the rental period, his system provides long-term skills in how to meet home payments and reduce their risk to banks.

Potential buyers enrol in the My Budget Fitness programme, which evaluates their current credit rating and provides a comprehensive affordability analysis. Once a new budget has been drawn up, the buyer can manage their money through rent2buy’s mobile2budget app. Using their phone, the buyer captures their expenditure every day, which is synched with their online budget. Logging

on to the secure website at the end of each month allows comparisons of their spending with their budget.

Buyers are also assigned mentors who contact them monthly to discuss their progress and make suggestions about where they can reduce costs. Once the budget fitness goal has been reached, the mentor also helps with a final affordability calculation, obtaining an improved credit record and submitting the home loan application.

PROTECTING THE OWNER For a property owner, a rent insurance product offered by rent2buy offers protection, ensuring that the rent is paid into their bank account on the first of each month. The insurance administration handles the rental collection, pays rates, taxes and levies and provides a reconciliation of all payments. “The policy also covers the rental income for three months if the tenant defaults during the rental period,” says De Waal.

Buying a house for the first time can be a sharp learning curve. When things don’t go according to plan, rent2buy presents an option to prepare a new homeowner for the financial responsibilities of owning a property.

COVER STORY Friday March 4 2016

the first to grow up with several key technologies already in existence and now have access to apps that simplify their lives.

CONTINUED FROM PAGE 1

Meet the millennial property buyer

MORTGAGE BEFORE MARRIAGE? A more accessible job market, marrying at an older age and exorbitant costs of weddings means that many new homebuyers are putting a mortgage before marriage.

About one in four married millennials (24% of US adults aged 18-34) purchased their first home with their current spouse before marriage, compared to 14% of those more than 45 years old, according to a Coldwell Banker Real Estate LLC Marriage and Home-buying survey in April 2013.

Four in five (80%) Americans believe it’s okay for adult children to live with their parents if they are saving to buy their own home, according to a Coldwell Banker Real Estate LLC survey of August 2013 titled Boomerang Kids Study.

Millennials are more likely to postpone marriage, choosing to live together instead. And one residence costs less than two.

According to the American Community Survey, between 1990 and 2008, while millennials were moving into adulthood, cohabiting US couple households increased to 6.2m, nearly doubling 1990 figures.

M

eet Generation Y, young adults born between 1980 and 2000, who are changing the way the world functions and how markets operate.

They are doing it through their spending habits, technosavvy approach and a global view that is significantly more questioning than that of the generations who preceded them.

According to a report titled Millennials by Goldman Sachs Global Investment Research, the US has 92-million millennials, the biggest generation in US history. A growing number of these adults aged 18 to 35 years are choosing to live at home with their parents. The percentage of 18 to 31-year-olds married and living in their own household has dropped more than 50% since the 1960s.

Millennials are prolific technology users, generally considered the most connected generation for their embrace of technology and social media across their lives. This includes their approach to purchasing property — millennials now constitute the bulk of the world’s first-time homeowners.

TECHNOLOGY-SMART The National Association of Realtors Home Buyer and Seller Generational Report

2015 cited Generation Y as the largest group of American homebuyers, far outstripping the Baby Boomers. First National Bank data reflects that 44% of South African buyers are less than 40 years old, putting a significant percentage of buyers into the millennial category.

Acutt Property Group MD Jonathan Acutt unashamedly fits the demographic profile of the millennials with whom he often deals as customers. A typical day involves waking to his cellphone alarm, spending 15 minutes toggling between Facebook and Twitter accounts, listening to a musicstreaming app via Bluetooth connectivity while dressing, checking his digital calendar and cross-referencing his computer over breakfast.

He will listen to audio books or music videos via YouTube while driving to work, having already corresponded with colleagues via WhatsApp on urgent issues, gathered information via various local and international websites and then shared it to his Facebook and Twitter accounts, as well as to his team via WhatsApp. Acutt ends the day reading information via his Business Insider app, streaming Netflix on television and viewing Pinterest posts on making his home fashionable.

Acutt says millennials are

DIFFERENT SELLING PHILOSOPHY Into that environment is the change that makes for a different selling philosophy for estate agents. Statistics from estate agencies’ websites reflect that 90% of buyers begin their property search online via smartphones or tablets.

South African internet penetration is approaching 20%, with the mass market embracing digital tools on their phones and mobile operators cutting data costs and rolling out networks.

Seeff Dolphin Coast sales director Tim Johnson says having searched online for property, millennials use social media platforms to ask questions and gather information about neighbourhoods, property trends and prices long before they encounter agents.

“Within this demographic there exists a culture of ‘don’t call me — I’ll find you’.

Once they have done their research, they will seek out a trusted advisor to assist in the buying process,” adds RE/MAX Southern Africa CEO and regional director Adrian Goslett.

Given that mobile broadband subscriptions now outnumber fixed line applications eight to one, and that SA experienced a 1,000% hike in cellphone users between 2011 and 2012, Goslett says these trends are not surprising. “Catering to these devices with a mobiletailored website is essential for real estate brands to effectively communicate with the millennial generation,” he says.

Responsive agency websites, rather than apps, are a more convenient way for clients to find information related to their property requirements. He adds: “Millennials use technology at the outset, but at some point will look to a trusted advisor to interpret the information acquired.”

“Millennials are generally not focusing on family, wealth creation and settling down.

They may swap home practicality for something trendy, techsmart and stylish with proximity to work”

LESS SETTLING Millennials are generally not focusing on family, wealth creation and settling down. They may swap home practicality for something trendy, tech-smart and stylish with a proximity to where they work.

Goslett says an advantage of buying over renting is that it implements forced saving.

Bond repayments ensure homeowners have an asset, considering South Africans’ generally poor savings culture.

Acutt says while property has shown consistent growth over the past century, millennials like to be mobile and not tied down to a

specific area or suburb. He believes millennials can purchase a property for which they qualified, but rent out that investment and offset the rental income earned against the rented property in which they reside — they can afford to live in the neighbourhood they desire without having to purchase in that area.

DOUBLE BUYING POWER Johnson says access to finance remains a key issue for first-time homeowners, so typically millennial buyers are dual-income households to slightly boost their buying power.

While younger ones have student loans impacting on their ability to access finance, those acquiring property are entering the market at between R1m and R2.5m.

The Absa Homeowner Insights report reflects that young, independent singles consider fibre optic networks and properties offering highspeed internet access to their neighbourhoods to be more important than whether the property has a pool or staff accommodation. Will fibre optic soon be considered an essential utility similar to electricity and water?

BOOMERANG KIDS? In line with international trends where children either leave home later, returning to their parents’ homes — the term is boomerang kids — or rent for longer periods before acquiring property, Goslett says the average age of South African first-time buyers is slowly increasing.

In April 2015 the figure was 32 years old, increasing to age 34 by December 2015.

Absa statistics released in December 2015 reflected the average nominal values for middle-segment properties at R887,000 (small homes of 80m2 to 140m2), R1.274m (medium homes of 141m2 to 220m2) and R1.982m (large homes of 221m2 to 400m2).

Absa Homeloans property analyst Jacques du Toit says year-on-year growth in this sector was markedly lower in 2015. After experiencing nominal price growths of 10% in 2013 and 9,3% in 2014, South African residential values increased about 6% last year.

He forecasts slow economic growth in 2016, hindered by rising inflation, higher interest rates and continued financial pressure on consumers. This will likely translate into subdued housing supply and demand with a nominal house price growth of about 5% and real house deflation over the next 12 months.

“The upshot might then be that millennials will hang on the sidelines to assess whether conditions improve before jumping into the market this year,” Johnson concludes.

Mature Lifestyle Estate.

Priced from R1.45 million*

*Including transfer duty and VAT.

The ultimate lifestyle investment for the mature buyer.

Heritage Estate is designed to have a serene old-world charm in which residents will be able to enjoy a comfortable lifestyle in beautiful landscaped surrounds. The estate features lock-up-and-go residences ideal for the mature person looking to travel or spend time in secure, elegant grounds, and it moves away from the traditional Life Rights retirement model to Sectional-Title ownership.

Features • • • • • • • • •

Safe and secure lifestyle Quality finishes and fully imported kitchens Beautiful landscaped surrounds Luxury clubhouse with coffee shop, library, business centre, card-room and bar Shuttle shopping service Fibre optic internet Pet-friendly Lifts Home-based assisted care available

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To find out more, contact: Sally Wright 082 806 3069 · sally.wright@pamgolding.co.za Office 011 923 4400 · pamgolding.co.za/heritage-estate

INVESTIGATION Friday March 4 2016

Investing smartly in your future Retirement developments have come a long way from traditional old age homes. Many have beautiful settings, with first-rate facilities, a built-in social network and gardens that owners don’t have to maintain. But how do they stack up as investments?

WORDS: NICOLA JENVEY :: PHOTOS: SUPPLIED

W

hen it comes to retirement, couples tend to put off making a decision about whether they will downscale to an established retirement village or apartment, or rather buy a smaller unit and take care of their healthcare needs independently.

But according to Shan Hulbert, sales manager at Knight Frank Residential SA, delaying can be a mistake.

“There is a shortage of retirement options and to provide for private healthcare outside of a retirement village or estate can become very expensive.

“The majority of retirement homes in the Cape, whether apartment blocks, villages or estates, have long waiting lists

(some up to 10 years) and if you wait too long, you might find there is nothing available to buy or rent when you need it,” she says.

Hulbert advises couples who are thinking of downscaling to consider buying a retirement property ahead of time, and renting it out until they are ready to use it.

RETIREES SETTLING EARLIER Commenting on Heritage Estate in Modderfontein, Pam Golding Properties’ CEO Andrew Golding says the trend of middle- to higherincome earners retiring earlier is contributing to the shortage of quality retirement accommodation in Johannesburg. He says

“Some of our retirement villages have shown a capital growth of 40% over three years. This is phenomenal growth” Hein Ehlers, group CEO, Devmark Property Group

LIFE RIGHTS V SECTIONAL TITLE V SHARE BLOCK Life rights ownership allows a purchaser the “right” to the enjoyment of a unit along with the facilities offered for the duration of their natural life, while the developer retains the asset and the maintenance responsibilities. On resale, the estate receives the original purchase price plus a percentage of the net profit, determined at purchase, less selling and refurbishment costs.

Retirement Villages SA marketing director Marelize van Rooyen says these schemes suit people with less capital to invest. The argument against life rights schemes is that they do not offer long-term investment value to the purchaser.

Should they decide to relinquish the life right before they pass away, or are forced to move, there is inevitably material loss of value in the investment.

PLETTENBERG MANOR

Sectional title purchases mean buyers acquire ownership via title deeds registered with the deeds office, thus incurring transfer and conveyancing costs, as well as the ongoing maintenance and costmanagement aspects. Most South Africans are familiar with this option as it allows owners to leave their units to their heirs or sell as they see fit. Owners or investors of any age can rent out their investments to suitable tenants (over 50s) at

market-related rentals. Or they can sell sectional title unit at any time at marketrelated prices. The property can also be bonded to a bank or financial institution, whereas life rights properties may not be.

According to Evergreen Lifestyles sales consultant Jayne Hendry, sectional title villages often have complex administrative infrastructure requirements under the Sectional Title and Housing Schemes for Retired Persons Acts.

Share block schemes, although not widely known locally, mean purchasers do not obtain exclusive title to their units but secure shares in the holding company. Regulated under the Share Block Control Act 1980, purchasers obtain share certificates to the retirement village.

Hendry says the advantage is that generally costs are minimised. Share transfer is similar to a sectional title or freehold transfer, requiring a sale agreement, and incurs transfer duties. However the transaction is not registered in the deeds office. Share ownership entitles buyers to use and occupy their units, participate in the scheme’s management and contribute to the levy fund to meet running expenses.

However shareholders are never liable for the company’s debts.

INVESTIGATION Friday March 4 2016

developments have shifted from life rights to sectional title as retirees recognise the long-term value and want to retain ownership.

“Within the middle- to higher-income brackets, people are tending to retire earlier. This trend, along with increased life expectancies, and an increasingly ageing population within these income groups, is contributing to a shortage of quality retirement accommodation in Johannesburg, for which there is high demand and long waiting lists.”

Golding believes that the nature of retirement properties is changing; more people want a property within a secure estate, which confers on them an outstanding lifestyle as well as maximum independence. “In addition, many of these individuals are also seeking properties that provide them and their families with meaningful investments,” he says.

A WISE INVESTMENT According to Hein Ehlers, founder and group CEO of Devmark Property Group, residential units in retirement villages have proven to be some of the best property investments. Says Ehlers of the high returns: “Some of our retirement villages have shown a capital growth of 40% over three years. This is phenomenal growth.”

For those looking to invest in second or third properties, Ehlers recommends investing in retirement village properties as demand always surpasses supply.

“This market has its own set of rules and doesn’t necessarily follow the trends of the general residential market. There is normally a waiting list of people who want to purchase homes in established villages and it’s therefore an ideal investment.

“It is, however, important for investors to do their homework properly and make sure that the developer has a track record in developing retirement villages, that the development is located in a prime area and that it is developed in terms of the Retired Persons Act,” he adds.

“The age group of people buying into mature lifestyle estates is getting younger — they reach emptynest syndrome and want to downscale but they only want to move once” Vee Hofmeyr, sales manager, Waterfall Valley Mature Lifestyle Estate

QUESTIONS TO ASK Properly investigate the governance, costs and services of a development before you commit yourself and you will reduce the chances of disappointment later, when it may be too late to relocate. It is advisable to have any agreement checked by an attorney to make sure you fully understand its implications.

What is the levy and what does it include?

The levy is the amount payable as a contribution to the costs of the control, management and administration of a housing development scheme.

Ask at what rate the levy escalates, and if there are any limits to the escalation.

What services does the monthly levy cover and how extensive are the services?

In a life rights village, for instance, the occupants cannot be asked to make a financial contribution to any operating costs beyond their monthly levy.

What are the onsite healthcare services and their costs?

Tony Ketcher, Seeff MD in Randburg, says typically retirement villages offer mid-care and frail care facilities, and owners should understand their funding and impact on the monthly levies. Find out about the resident-to-staff ratio of nursing professionals. Do not assume onsite frail care is included, but some villages may be linked to private hospitals, with special arrangements for treating frail care patients or regular illnesses.

What are the security measures?

Estates may say there is 24-hour security, but is it confined to a perimeter fence and gate control, or is it more sophisticated than that? Does the security system need to be upgraded soon and who carries the cost?

PLETTENBERG MANOR DO BACKGROUND CHECKS Mark Corbett, CEO of Century Property Developments, cautions about making sure that the developer will fulfil all their promises. “Retirees cannot afford to make a costly investment at their age so we recommend going with a developer with a good track record,” he says. “For example, at Waterfall Valley Mature Lifestyle Estate in Sunninghill, we built the frail care centre and the clubhouses before we started building the homes. We’ve heard many stories of people investing in other retirement villages where the frail care centre and other promises never materialised.”

WATERFALL VALLEY MATURE LIFESTYLE ESTATE

What about optional support services?

Is meal assistance available? Are the grounds taken care of? Is there a handyman, driver and house-cleaning service?

Other questions Enquire about the social activities and facilities. Are pets allowed? Can homes be rented out until you are ready to move in? Are owners allowed to make structural improvements to their accommodation?

Although residents can only live in a retirement village from the age of 50, Ehlers recommends that those able to should consider investing much sooner. “Many people have the incorrect perception about residents in a retirement village. We’ve seen that the people living here are very active, energetic and social, and they enjoy life to the fullest.

“In fact, this created the demand for facilities such as gymnasiums, restaurants, coffee shops and more. Apart from the security offered in a gated complex, garden and house-cleaning services also give residents the peace of mind to go away for long periods of time — providing a

HERITAGE ESTATE

total hassle-free lifestyle.”

Says Vee Hofmeyr, sales manager at Waterfall Valley Mature Lifestyle Estate: “From my experience, the earlier you invest in retirement living the better.

We are finding the age group of people buying into mature lifestyle estates is getting younger — they reach emptynest syndrome and want to downscale but they only want to move once.

“Also, at a younger age they make more use of all of the facilities that the estate has to offer. There are a lot of people who buy to rent until such time as they are ready to move in. Owners are receiving high rental returns and easily covering their expenses, while benefiting from capital appreciation and ensuring that their future is secure.”

“Retirees cannot afford to make a costly investment at their age so we recommend going with a developer with a good track record” Mark Corbett, CEO of Century Property Developments

CROSS-COUNTRY MIGRATION Acutts MD Jonathan Acutt says there is a growing trend for retirees to migrate. The Western Cape — anywhere west of the Overberg Mountains — has emerged as one popular belt, while the KwaZuluNatal Midlands, specifically Howick, and the KZN North Coast, are two others.

Seeff KwaZulu-Natal regional manager Dave Jones says Howick remains the province’s largest retirement success story.

Amber Ridge, Amber Valley and Amber Glen offer frail care, libraries, function rooms and sporting facilities with units sold via sectional title.

Annual property sales in Howick top R400m, with 80% being retirement homes. Phase one of St John’s Village, a 900-unit facility, was sold out during the recent launch. Acutt says Eagle Ridge, opposite the Howick hospital, is virtually sold out, with only 25 units left.

DEVMARK SHOW DEVELOPMENT

Friday March 4 2016

Devmark Property Group launches The Plettenberg Manor Retirement villages, like The Plettenberg Manor, are in demand and remain good property investments WORDS AND IMAGES: SUPPLIED

DEVMARK SHOW DEVELOPMENT Friday March 4 2016

GET IN TOUCH

The Plettenberg Manor: visit www.plettmanor.com or call 044 533 1589 Helderberg Manor: visit www.helderbergmanor.com or call 021 851 0738 Devmark Property Group: visit www.devmark.co.za or call 021 948 3502

T

he Devmark Property Group has, over the past 26 years, successfully carved its name as an industry leader. In 1998 it was rated among the top 300 companies in the Western Cape. Their vision for creating developments of lasting value and appeal is supported by their insistence on quality and the integration of interrelated sectors.

The group incorporates Devmark Commercial, Devmark Property Administration, Devmark Developments, Devmark Construction, Devmark Property Investments and Sansbury Renovations.

Says Hein Ehlers, founder and group CEO: “In all divisions we pride ourselves on our outstanding service and expertise.

Our success rests on the shared philosophy of our people at all levels: providing an exceptional and comprehensive service to clients in the property industry. By drawing on the group’s collective knowledge and expertise, Devmark continues to grow and prosper and the commitment of all employees, associates, partners and stakeholders is highly valued.”

Devmark Property Group is synonymous with successful retirement villages such as Clé du Cap, Legato, Heritage Manor, Onrus Manor, La Vie Est Belle, Villa Cortona and Helderberg Manor.

THE PLETTENBERG MANOR The group recently launched their latest development, The Plettenberg Manor.

“We’re extremely excited about our eighth retirement village development. We now have more than 1,800 retirees living contentedly in our retirement villages,” says Ehlers.

Plettenberg Bay has

been Ehlers’ second home for the past 37 years. “The Plettenberg Manor’s natural beauty and tranquillity is breathtaking, which makes it ideal for the development of a retirement village.”

At the heart of the estate, the former Keurbooms River Hotel will be refurbished and restored beyond its former glory to function as the estate’s clubhouse, offering residents and guests the best dining and leisure experience.

The development will offer six accommodation types ranging from assisted living units to three-bedroom exclusive homes designed in a Cape vernacular style, juxtaposing the Cape South Coast’s rural charm with sophisticated modern functionality and open plan living.

Prices range from R1.175m to R3.8m.

HELDERBERG MANOR Devmark’s Helderberg Manor in Somerset West is in its final phase. Ehlers says: “Helderberg Manor has grown phenomally with new homes and apartments being occupied, plus the completion of the clubhouse, library, assisted living units and clinic.

The estate has an active, social and vibrant community, and rates as one of our most successful developments.”

The development is situated in Somerset West’s Heritage Park — a 200ha private estate, complete with its own houses, schools, shops, places of worship, parks and waterways.

Residents are surrounded by a 15km radius of the economic hub of the Helderberg area (including the private hospital Vergelegen Medi-Clinic), the Helderberg Nature Reserve, the Somerset Mall, a variety of golf courses for enthusiasts, the Indian

Ocean with its beaches ideal for family outings, and the various wine routes to popular estates including the Lourensford en Vergelegen wine estates.

Helderberg Manor has been selling fast, with only a few units still available. House prices range from R1.950m to R3.5m, the apartments from R1.095m to R1.295m and the

assisted living units are from R950,000.

Ehlers says: “The Devmark Property Group’s philosophy is to offer retirees an exceptional lifestyle and to create holistic communities.

We look forward to developing close relationships with all our future residents at The Plettenberg Manor and Helderberg Manor.”

“The Plettenberg Manor’s natural beauty and tranquillity is breathtaking, which makes it ideal for the development of a retirement village” Hein Ehlers, group CEO of the Devmark Property Group

INTERNATIONAL Friday March 4 2016

Antigua and Barbuda: new local choice

WAYS INVESTORS CAN SECURE CITIZENSHIP: By contributing to the National Development Fund to the sum of $250,000.

This is a nonrefundable donation to the nonprofit organisation.

Could you imagine yourself living or holidaying on a beautiful Caribbean island? More and more South Africans are exploring opportunities offered by Antigua and Barbuda, a newer but increasingly coveted destination for citizenship through investment WORDS: LEA JACOBS :: PHOTOS: MONARCH & CO AND ISTOCK

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icknamed the land of 365 beaches, the twin island-country of Antigua and Barbuda is the latest Caribbean destination to offer a citizenship-by-investment programme. Launched in 2014, the initiative affords investors the opportunity to hold an Antiguan passport without having to live on the island permanently.

The Caribbean has long been regarded as a tax haven for the rich and famous, but recently it has become a popular choice for those looking to invest for reasons other than saving money. A number of islands now offer citizenship-by-investment packages that not only make a great deal of long-term financial sense, but also offer a lifestyle like no other.

“Considering that the Citizenship by Investment Programme is still in its infancy, Antigua and Barbuda is gaining both a global and local reputation as an attractive investment destination,” says James Bowling, CEO at Monarch & Co. “Traditionally, Grenada held the top position for South Africans seeking a second passport within the Caribbean, but as more South Africans learn of the advantages and opportunities offered by Antigua and Barbuda, it is quickly gaining in popularity

and climbing the ranks of the most coveted programmes.”

Beyond fame Regarded as one of the most unspoiled and beautiful islands in the region, Antiguan residents include cricketer Sir Vivian Richards and musician Eric Clapton. It has also played host to some of the world’s most famous names including the late Diana, Princess of Wales.

Bowling notes that the advantages of investing include the abolition of personal income taxes from April this year, as well as lower corporate taxes, visa-free travel, and minimised exposure to risk through guaranteed yields and/or buybacks at the end of the required five-year investment period. “Investors can expect a minimum yield of 4% to 6% per annum at the end of their minimum investment term — meaning they hold an offshore asset while enjoying their citizenship benefits.”

To secure citizenship, Bowling’s company most often recommends investing in a sustainable aquaculture project or the real estate option, due to the positive and realistic guaranteed yields and/or buyback guarantees they both offer. “These elements significantly reduce an investor’s risk exposure and offer an opportunity to receive yields in US dollars,” he says.

Sandra Woest, senior

manager at Henley & Partners SA, explains that the programme is proving popular with South Africans who aren’t necessarily planning to emigrate or take up real residence in another country.

Visa-free benefits Says Woest: “The Antiguan passport allows for visa-free travel to more than 130 countries including the EU and Canada. Since visa-free travel is limited with a South African passport, it is obvious why an individual, especially

one with offshore business or who travels frequently, would want to have a passport that allows them to travel without the hassle of obtaining a visa first — especially to the EU.” She says that it takes about six months to secure a passport after all the required criteria have been met. However applicants do not need to reside on the island while the application is being processed. In fact, the only requirement for residence is that the applicant visits the island for five days during the first five years of

citizenship. Investors must swear an oath of allegiance to the country, but this can be done at a consulate in SA. “Children may be included in residency applications until the age of 26, provided they are unmarried, or fulltime students,” says Woest.

“Likewise, parents of the applicant may be included if they are over the age of 65. As with any country, the applicant should have no criminal record and be in good health. Proof of identity, passports, address, proof of and source of funds also need to be provided.”

“Traditionally, Grenada held the top position for South Africans seeking a second passport within the Caribbean, but as more South Africans learn of the advantages and opportunities offered by Antigua and Barbuda, it is quickly gaining in popularity and climbing the ranks of the most coveted programmes” James Bowling, CEO, Monarch & Co

Investment in a sustainable aquaculture project to the tune of $400,000.

In this instance the investor purchases preferred shares in an Antigua-based sustainable aquaculture project that offers minimum expected yields of 6% from year three onwards. There is also a buyback guarantee at the end of the five-year investment term, should investors wish to divest.

A real estate investment. If the investor chooses this route, a governmentapproved real estate should be purchased with a minimum price of $400,000. Minimum expected yields are 4% to 6%, with guaranteed yields for the first two years. Real estate investments remain the property of the applicant but cannot be sold within a five-year period.

A business investment. This option requires an investment of at least $1.5m directly into an eligible business as a sole investor, or a joint investment with at least one other person in an eligible business totalling minimum $5m.

PROPERTY NEWS Friday March 4 2016

Expropriation Bill stealthily passed “If the state says that it will take property as custodian, rather than as owner, then this is unlikely to count as an expropriation, and the owner will then get no compensation” Dr Anthea Jeffery, head of policy research, Institute of Race Relations

WORDS: GEORGINA GUEDES :: PHOTO: ISTOCK

W

ith all eyes on the budget during the last week of February, government hurried through an Expropriation Bill that could have significant implications for land ownership in SA. On February 23, Parliament passed the Expropriation Bill that will allow the state to pay for land at a value determined by a government adjudicator and then expropriate it.

This effectively scraps the “willing buyer, willing seller”

approach to land reform.

Despite the proposed intention of the bill to redress racial disparities in land ownership, there are a number of problematic clauses that make it possible for land to be expropriated unfairly. Dr Anthea Jeffery, head of policy research at the Institute of Race Relations, says the bill leaves property owners open to massive losses should government decide to expropriate their homes, land or other property.

One clause — the focus of much discussion, but which remains in the bill that has been passed — defines expropriation as “the compulsory acquisition of property by an expropriating authority”. Jeffery explains that this definition means that no expropriation has taken place if the state does not acquire ownership of the property.

“If the state says that it will take property as custodian, rather than as owner, then

this is unlikely to count as an expropriation, and the owner will then get no compensation,” she says.

The bill also allows for the “history” of the property to be taken into account when determining compensation for expropriation, allowing for a reduction in compensation based on past ownership.

This formula, which comes from the property clause in the Constitution, means that compensation may be significantly less than market value.

At the same, the bill also allows the state to carry out an expropriation by serving a notice on the owner, which Jeffery says is unconstitutional. “The state has to go through a preliminary process and invite the owners to make representations, but it is not required to give reasons for rejecting these representations,” she explains. “Once it has investigated the value, it can simply expropriate without court approval and by service of a notice. Ownership of the property can pass to the state as early as the next day.”

A property owner who wants to challenge the validity of the expropriation or the

compensation offered by the state must go to court to do so. In addition, the bill does not recognise losses through indirect expropriation — for instance, when a company is required to transfer 51% ownership of its business at a loss to a BEE investor, who might not have the full funds to cover the transaction.

They will not be able to claim damages under the new bill.

Now that the bill has been passed by Parliament, it still has to be passed by the National Council of Provinces, after which it will be sent to President Jacob Zuma to be signed into law. “None of these concerns was addressed, and I doubt that the National Council of Provinces will not pass it, so it will be up to President Zuma to make a decision, and given the current focus on land reform in SA, I am fairly certain he will sign,” says Jeffery.

The most significant outcome of the passing of this bill will be the acceleration of the land reform process.

However, the bill leaves the possibility wide open that any property could be expropriated with unfair compensation and without accessible channels for objection.

A life effortlessly customised to your every need.

VAL DE VIE | PAARL-FRANSCHHOEK

Val de Vie offers world-class modern living.

Choose from a host of property options to suit your lifestyle.

VIEW BY APPOINTMENT

Ronel Pienaar 082 556 2433

Amanda Colombo 083 258 1212

Anneke Buys 083 357 0082

RIVER RESERVE prices from R11.4 m LE DOMAINE prices from R1.425m * THE VINES prices from R2.999m RIVER CLUB prices from R6.7m * THE OAKS prices from R5.665m LA VUE prices from R1.75m * completed homes

Office: 021 871 1480 • pamgolding.co.za/val-de-vie 218 Main Road, Paarl, 7646, Western Cape / paarl@pamgolding.co.za

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