Business Day Home Front 24 April 2015

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FRIDAY, APRIL 24 2015

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COTTON ON TO THE TINY-HOME MOVEMENT

LIVING THE GOOD LIFE IN HEIDELBERG

INVESTMENTREADY TOWNSHIPS

REASONS TO INVEST IN MANILA

Quest for the watertight lease agreement WORDS: ANNE SCHAUFFER :: PHOTOS: SUPPLIED

P There may not be such a thing as a watertight lease agreement, but there are things you can do to get you pretty close to the ideal

art fact, part urban legend, gruesome dinner party tales of tenants riding roughshod over landlords has led not only to tighter lease agreements, but also to shifts in the rental market. There is a nationwide shortage of rental accommodation and in many areas this has fuelled the investor and buy-to-let markets. But here’s the

catch — many who were previously keen investors have started choosing investments that present fewer potential “issues”.

The days of the generic lease are over. As Seeff chairman Samuel Seeff says: “Landlords are increasingly turning to specialist rental agencies to manage their rental properties. This ranges from vetting the tenants to

ensuring the implementation of good contracts.” Most rental agencies agree on standard clauses to include in lease agreements but they’re increasingly adding others to close the gaps.

“Stringent tenant vetting is a process that allows goodquality tenants to occupy a property, and when done correctly it mitigates a landlord’s risk of a problem

tenant exponentially,” says David Jacobs, regional head of Rawson Properties in Gauteng and KwaZulu-Natal. “Rental agents must be aware of and understand consumer credit behaviour in order to ensure that only quality tenants are presented to landlords.”

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LIFESTYLE

LIFESTYLE

Friday April 24 2015

WORDS: RIEKIE CLOETE :: PHOTOS: AFAC

Downscaling is not downgrading A dream home need not be a palace on an erf the size of a rugby field. Nano-homes, while not new to SA, are a big hit in the US too

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“In many first-world countries, the tiny-home phenomenon is the domain of the middle and upper classes. In SA and Africa, a large number of people live in poverty and there’s a great need for affordable housing — something between informal and formal housing” Dirk Coetser, director, AFAC

hen the economic crash in the US hit homeowners, it hit them hard, but one of the positive spin-offs was that many middle-class homeowners (especially in California) adapted by opting for smaller, sometimes portable, homes. This enabled them to still boast soughtafter luxury touches — but in a more affordable setting.

The situation is a tad more complex on local soil, and tiny homes are certainly not just the domain of the middle class. “There’s a big

divide in this market. It’s either the very poor or the very rich who are interested in tiny homes. For the poor, it’s better than shacks, whereas the rich view it as a ‘gadget’,” says Dirk Coetser, director of Architecture for a Change (www.a4ac.net).

In the US, the name of the game is chic minimalism with trendy luxury fittings — think cutting-edge LED lighting, bamboo reed floors and sleek counters made of concrete.

In the case of companies such as Tiny Heirloom, Oregon, in-house speakers,

voice-activated door locks, automated thermostats and Bluetooth surround-sound systems up the style stakes.

In SA it’s more about functionality, with modern design elevating the tiny home from “ugly low-cost housing” status. For example, in the case of the Mamelodi Pod, tiny homes for poor areas are prefabricated (ideal for mass housing solutions), provide external shading (ideal in our climate) and are suspended above the ground (to prevent flooding and for waterproofing).

POD PERFECT The Mamelodi Pod (about 11m2 in size) epitomises the tiny-home concept and is modern, aesthetically pleasing and functional to boot. The structures are equipped with a photovoltaic panel that charges a 12V battery unit,

a solar system that powers four internal LED lights, two external LED strip lights (at night) and is able to charge a cellular phone. Units also feature a skylight (providing natural light during the day), and each home collects and stores rainwater via roof gutters connected to a 1,000l tank. When the winter chill sets in, the fivelayer wall, floor and roof insulation deliver in spades.

As Coetser points out, the big problem is obtaining land, making tiny prefab homes a great solution for informal settlements: “It offers better thermal performance as opposed to zinc structures; quick erection as opposed to brick structures; and solar electricity, which is fairly cheap on a small scale.

It also helps to prevent shack fires and aids mobility so that when owners relocate they can take the structure with them.”

In the same vein, but aimed at a slightly more affluent sector of the market, the INDAWO/lifePOD (podidladla.com) comprises a modular prefab nano-home.

The brainchild of architect Clara Da Cruz Almeida, these pods start from as small as 6m2 — the standard unit encompasses 17m2 — and can be customised according to the owner’s style and budget.

“We aim to reach young professionals who have just finished their studies and are not yet able to afford buying property,” says Da Cruz Almeida.

The unit can function either on the grid by being connected to existing services, or off the grid in more remote areas.

The lightweight structure can be used pretty much wherever there’s 24m2 of open land. The prototype can be seen at Nirox Sculpture Park in the Cradle of Humankind, where it serves an artist’s residence. Thanks to input from the occupants, the final tweaks are being made to the units before they are brought to market.

LOOKING AHEAD There aren’t many companies catering specifically for tiny homes in SA. “We’ve received a lot of positive feedback on the idea but not many people are willing to invest in it. It can become a very feasible market in SA, but only if it can reach a mass-production level,” says Coetser.

AFAC works with affordable materials such as timber, steel and zinc to create appealing tiny houses in the hope of eradicating the misconception that very small homes must be unattractive.

“This is slowly becoming part of a niche market, but we need the right forwardthinking clients to give architects the opportunity.

Tiny-home companies often don’t have dedicated designers, which leads to ugly designs, which in turn creates a stigma in the market.”

LIFESTYLE Friday April 24 2015

In Stellenbosch on business

TRAVEL

If you’re looking for a work home-awayfrom-the-office in Stellenbosch, the Oudehoek ticks all the right boxes WORDS: BRIDGET MCNULTY :: PHOTOS: MARK PEDDLE

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t might sound like a contradiction in terms: in Stellenbosch, on business.

Surely Stellenbosch is all about the vineyards and the lazy wine farm lunches and not business lunches, board meetings and quick coffees?

But Stellenbosch is home to a surprising number of head offices, and while wine farm accommodation is wonderful for lazy weekends, when it comes to early mornings and convenience the requirements are a little different.

Enter the Oudehoek flats, which have everything you need — except for wi-fi, which isn’t freely available.

Home comforts are there in abundance, though. The self-contained one-bedroom en-suite units are stylish and comfortable. The kitchenette comes fully stocked, including

That’s what makes Stellenbosch such a refreshing place to do business: although it’s busy, it still feels like cosy village

the all-important washing machine and iron so that you can be fresh for meetings. The spacious lounge looks out onto a tree canopy and the bustling historic town centre below.

You can leave your unit at 8.57am for a 9am meeting at one of the many cafés on the street below — it doesn’t get more convenient than that.

Parking is included in an underground garage (a must in the busy town centre) but if you plan your stay carefully, you won’t even need to take the car out: you can simply walk to your meetings and step out for dinner.

That’s what makes Stellenbosch such a refreshing place to do business: although it’s busy, it still feels like a cosy village. Perhaps it’s the beautiful old buildings, the wide leafy streets or the sense of history. If you’re still not sure whether Oudehoek should be your working home from home, let me leave you with this little titbit: when you wake up in the morning and open your veranda doors to the green leaves outside, the scent of freshly baked bread from the bakery below fills the apartment.

If that’s not as close to home as you’re going to get on business, I don’t know what is. lifeandleisure.co.za

PROPERTY

Charming Heidelberg plays in the big leagues WORDS ANNE SCHAUFFER :: PHOTOGRAPHS PAM GOLDING PROPERTIES HEIDELBERG

The pretty town of Heidelberg is ideally positioned for those who enjoy small-town country living but want easy access to the big cities

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eidelberg is ideally placed on the N3 between Johannesburg and Durban, about 30km from Alberton, 50km from the Joburg city centre and 60km from OR Tambo International airport.

Predominantly an Afrikaans town, Heidelberg has a solid reputation that was built on

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its rich agricultural district and its infrastructure, both of which are sufficient to woo large manufacturing and other corporates, British American Tobacco Company being one of them.

And yet, says Stoffel Janse van Rensburg, area principal for Pam Golding Properties, it remains “a country town”.

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“The main reason people live here is the tranquillity, the beautiful rolling hills, the historic houses and the good schools,” he says. “Many of the residents work in town but just as many commute to Johannesburg or other Gauteng business hubs.”

There’s been an influx of residents who commute daily to their place of work outside Heidelberg.

The property market has been particularly active in the past 18 months, and the new 35,000m² Heidelberg Mall on the N3 has created a positive spin-off for the construction industry. “New developments have started to pop up again,” says Janse van Rensburg.

“Berg en Dal and Kloof are the most popular estates as they provide easy access to all routes to Johannesburg and the East Rand. Riversands, a new retirement estate

with controlled access and excellent security, is also in high demand. Sales prices for homes average about R1.2m for a three-bedroom house, but there are homes available from R800,000 to R25m,” he says.

The rental market is buoyant too. “We’re not exactly sure why the rental demand is quite so high, but we suspect that, in part, it boils down to higher rental costs per square metre in the surrounding towns,” says Janse Van Rensburg.

“The biggest demand is in the R6,000-R10,000 a month price bracket — that’s the average rental for town, although there are properties available at R20,000 a month.

There’s high demand coming from contractors working on the new power station near Grootvlei, as well as from those who live on the fringe of town and want the better lifestyle offered by town.”

ADVERTISING SALES Michèle Jones Sarah Steadman Yvonne Botha Susan Erwee Bradley Sparks Jackie Maritz

michele.jones@pamedia.co.za sarah.steadman@pamedia.co.za yvonne.botha@pamedia.co.za susan.erwee@pamedia.co.za bradley.sparks@pamedia.co.za jackie.maritz@pamedia.co.za

084 246 8105 (Sales & Marketing Manager) 082 334 4367 JHB (Property) 082 563 6685 JHB (Lifestyle) 083 556 9848 (Western Cape) 073 666 3842 (KwaZulu-Natal) 078 133 5211 (Garden Route)

An International Associate of Savills

SANDHURST GAUTENG R45 MILLION This landmark property offers impressive views, luxurious proportions, exceptional craftsmanship and superior finishes. An entertainer’s dream home set on 3 965m² of lush, indigenous gardens.

Bedrooms 5 | Bathrooms 6 | Covered Parking 4 Louis Green 082 820 3040 Lisa Daly 082 450 6594 WEB ACCESS HP1213741

DAINFERN VALLEY GAUTENG R10.8 MILLION This luxurious property is located next to the river in tranquil surrounds. A first-class kitchen, jacuzzi, open fireplace and outdoor boma are just a few of the stand out features that will impress the most fastidious of buyers.

Bedrooms 4 | Bathrooms 4 | Parking 6 Sue Ralph 082 892 8772, Brenda Gilbert 083 251 4452 WEB ACCESS FW1193295

WATERFALL COUNTRY ESTATE GAUTENG R6.9 MILLION Fall in love with this beautifully designed home in one of South Africa’s most sought after and secure lifestyle estates. The property boasts top quality finishes and abundant natural light, plus eco-friendly innovations such as solar power, double glazing and gas.

Bedrooms 4 | Bathrooms 4 | Garages 2 Graham Pronk 083 578 3582

WEB ACCESS MR1215680

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MOUILLE POINT WESTERN CAPE R38 MILLION Touching on perfection, this property offers a high level of luxury, as well as style and substance. Suitable for a discerning buyer who will revel in elegant surrounds and enjoy both sea and mountain facing views.

Bedrooms 3 | Bathrooms 4½ | Garages 3 Paul Levy 083 300 3001 Lynn Pinn 083 6314890 Mariël Burger 082 372 2573 WEB ACCESS PR1164394

CLAREMONT UPPER WESTERN CAPE R15.5 MILLION Elegant, laid back spaces combined with superb indoor/outdoor flow to create this gracious American Georgian home, situated in prime ‘Hen & Chicken’ with spectacular mountain views. Attention to detail is enjoyed throughout.

Bedrooms 4 | Bathrooms 4 | Parking 4 Myrna Duveen 082 443 8417

WEB ACCESS KW1211386

SIMON’S TOWN WESTERN CAPE R4.2 MILLION This charming turn of the century farmhouse has been lovingly restored by its owners. Positioned to embrace the breath-taking ocean views, enjoy warm summer evenings, protected from the wind, on the spacious, undercover verandah.

Bedrooms 3 | Bathrooms 3 | Garages 2 Rosalie Jack 083 658 4187 Alan Dunlop 083 415 4505 WEB ACCESS SIM1195853

INVESTMENT Friday 24 April 2015

Analyse it WORDS: PATRICK CAIRNS

A legend for the wrong reasons

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llegations that a South African fund manager could be involved in a $16bn (about R194bn) Ponzi scheme caused a mixture of excitement and dread across the country last month. Thankfully, the initial concerns that local unit trusts might have been part of the alleged scam have been refuted, but the investigations into funds run in other jurisdictions, such as Mauritius and Guernsey, continue.

Although the claims are yet to be proven, they are nevertheless a reminder to people to show discretion about what they do with their money. Unfortunately, there is no shortage of criminals trying to separate people from their savings.

To understand how to tell a genuine investment from a fraud, it’s worth knowing the history. What we know as “Ponzi schemes” have been around for centuries, but in the modern era they are named after a man whose fraud was so outrageous that it really set the bar.

In 1920 Charles Ponzi, an Italian immigrant to the US, began offering 50% returns in just 90 days. He claimed to be able to do this due to a quirk in international postage. Anyone sending a letter from overseas could buy an international reply coupon, which could then be used by the recipient to buy a stamp in their own country.

Since the cost of stamps in countries differed, it was possible to buy cheaper coupons in one country and redeem them for more expensive stamps in another. To do this on the scale Ponzi claimed to be doing was impossible, but it was nevertheless a good enough story to convince thousands of people to give him their money. He simply used what he was getting in from new investors to pay the older ones.

His basic tactics are the same ones still used today and are the classic signs of a Ponzi scheme. First, he offered his investors guaranteed high returns and, second, he paid huge up-front commissions to the agents who brought in new business.

As much as we might hope otherwise, there is no investment anywhere in the world that can give high returns with no risk. Anything that offers such a proposition is at best unsustainable and at worst fraudulent. Those who

Safer leases for landlords CONTINUED FROM PAGE 1

run Ponzi schemes also know that one of the secrets is to get in as much money as quickly possible. That is why they incentivise agents with upfront commissions of 10% or more to bring money into the scheme.

If you come across an “investment” with these characteristics, the best thing you can do is head for the door, because you don’t want to end up like one of Ponzi’s victims, many of whom never saw their money again.

Charles Ponzi scammed his “investors” out of an estimated $15m in just eight months.

In today’s money that is the equivalent of about $175m, or R2.1bn

CILNA STEYN, A DIRECTOR AT PROPERTY LAW FIRM SSLR INCORPORATED, SAYS THEY INCLUDE THE FOLLOWING IN THEIR STANDARD LEASE AGREEMENT:

LEASE PRECAUTIONS Jacobs points out the effects of the National Credit Amendment Act, where default judgments and poor credit information is removed from consumer profiles, thereby increasing the pool of viable tenants. “The poor credit information is a result of past overindebtedness and doesn’t necessarily impact a consumer’s rental payment behaviour, depending on the reason and size of the original default,” says Jacobs.

Myles Wakefield, CEO of Wakefields Real Estate, says a full and comprehensive credit check report should be attached to the contract.

Says Wakefield: “We’ve just started using the TPN credit bureau which, in addition to the standard TransUnion and Experian credit checks, also checks the applicant’s payment history and gives a rating according to credit application, affordability and the probability of the applicant not only defaulting on rent but refusing to vacate the property and incurring months of nonpayment.”

Lease agreements are, in essence, a reflection of the rights, duties and obligations imposed on a landlord and tenant by the Rental Housing Act of 1999.

Says Jacobs: “Certain clauses do promote the interests of the landlord, such as the financial investment, while others protect the tenant’s interests. The Consumer Protection Act (CPA) plays a substantial role in all fixed-term agreements but does not really prejudice the rights of landlords.

“A tenant may not, for example, cancel a lease agreement without reasonable penalties. Such penalties are determined in a standard clause in most lease agreements, known as a ‘liquidated damages’ clause.

Similarly, the landlord may not cancel the fixed-term agreement. A variation to

this provision would be if there was a material breach by either party: under the CPA, 20 business days must be afforded to the defaulting party to remedy such breach. In light of the national average of tenants in poor standing, lease agreements must be onerous should the tenant consider cancelling or breaching.”

Wakefield believes a list of defects should be attached to the lease agreement: “A comprehensive inventory and ‘schedule of condition’ benefits both parties. Even if a property is deemed as unfurnished, there are still items that can be damaged and costly to replace, such as carpets. The tenant’s deposit return can be a highly contentious issue in the case of a dispute. Unless there is a clear indication that the property was damaged after the tenant moved in during the lease time, the landlord will usually lose the case.”

“It’s a general misconception that tenants have more rights than landlords,” says Jacobs.

“Prevailing legislation aims to place landlord and tenant on an equal footing. Each party has a set of rights, duties and obligations, and the Rental Housing Act governs the relationship between landlord and tenant.”

Wakefield cautions that landlords should avoid doing anything that falls outside the terms of the lease agreement: “No court can back a tenant if the landlord/property manager has acted within the bounds of the legal, signed lease agreement. A root cause for many disputes arises from the misunderstanding of the tenant’s or landlord’s rights or obligations. The agreement needs to comply with the Rental Housing Act 1999, and it must not be intended to mislead the tenant, and must be fair and clear.

A poorly written lease could easily be unenforceable.”

“It’s a general misconception that tenants have more rights than landlords” David Jacobs, regional head, Rawson Properties, Gauteng/KZN

n A well-laid-out and easy-to-follow schedule — a schedule of terms at the beginning of the lease agreement. This makes it easier to complete the details of the parties and property, and assists in its agents not omitting items of importance n Consumer Protection Act (CPA) notice — a notice that sets out when the CPA applies, and when it does not n Domicilium clause — a clause that details how, where and when documents and notices can be delivered to the tenant and to the owner n Alternate Place of Residence clause — this clause sets out an alternative place of residence, should the agreement be cancelled and the tenant needs to move to another residence; this aids in securing a faster eviction order n Breach clause — this clause details what will occur should the tenant or owner breach the lease agreement. Remember to take into consideration the CPA. Section 14 of the CPA could apply to an agreement for a set period, and only after the expiry of the original period will section 14 then not apply to the agreement. This way both situations are covered and the landlord will not have to be bound by legislation that is not necessarily applicable n General clauses — SSLR Incorporated includes a jurisdiction, costs and surety clause Jurisdiction: this details that the magistrate’s court may have jurisdiction over the lease agreement, not barring the amount claimed, without limiting the inherent jurisdiction of the high court Costs: the owner must be able to claim legal costs on the highest permissible scale Surety: stipulates when a surety agreement needs to be signed and for which legal entities surety agreements are necessary

INVESTMENT Friday 24 April 2015

PROPERTY

Township markets offer buy-to-let opportunities From north to south, SA’s townships are seeing inflows of private and public investment, thanks to the growing demand for formal accommodation WORDS: MEG WILSON :: PHOTO: ISTOCK

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ention the word “township” in SA and just about everyone will immediately think of Soweto, probably because of the enormous coverage the area was given during the 2010 Soccer World Cup and the fact that it was home to so many struggle heroes, including Nelson Mandela.

However, until 1994 almost every town in SA had its own “township” or all-black residential area.

The national and provincial governments are pouring money into these relics of apartheid to try to stimulate their local economies and attract more investment, especially in the property sector.

The Gauteng provincial government, for example, has committed to spending more than R1bn over the next five years to build and improve infrastructure in about 65 townships, to help local entrepreneurs and small businesses grow and, hopefully, create more jobs.

Premier David Makhura says that several billion rand

is being spent on expanding the public transport networks to enable those who must commute to work from the townships to do so safely and more quickly.

The past few years have seen a significant amount of retail development in townships around the country as the considerable spending power of the residents has become more apparent.

According to the most recent research by the World Bank, townships and informal settlements account for about half of SA’s urban residents and about 38% of all working-age citizens.

In Khayelitsha, for example, the average yearly disposable income is estimated at R20,000, which gives the township a disposable income of about R9bn a year, or 7% of the total disposable income of the Cape Town metro.

Similarly, the consumer spending power in Soweto has been estimated at R5bn, and that of Diepsloot to the northwest of Johannesburg at R2bn. Many townships have seen an increased demand

for residential property since 1994 as well as a steady rise in home values.

Indeed, the latest statistics released by First National Bank show that in 2014 the “township” markets outperformed the “suburban” markets in SA’s six major metros by quite a margin: the FNB House Price Index for the township areas rose by 9.5%, while the Major Metro Regional House Price Index rose by just 6.8%.

The main reasons for this discrepancy, it would appear, is that township properties are generally more affordable for firsttime buyers than even entry-level properties in the suburbs and that there is now a growing shortage of properties for sale in many of the most popular township areas.

That spells good opportunities for the development of more affordable homes in the townships, particularly for first-time buyers who can access subsidies via the Finance-linked Individual Subsidy (FLISP) programme for households earning between R3,501 a month and R15,000 a month.

However, the major demand in the townships remains for decent, affordable rental accommodation, usually in the form of rooms or small houses, and this can only be made possible if initiatives to create jobs in the townships succeed and economically empower more of the poorest residents there to move out of the backyard shacks they occupy. The trend is evident in the townships closest to

The Gauteng provincial government has committed to spending more than R1bn over the next five years to build and improve infrastructure in about 65 townships

those towns where major capital projects such as new power stations or new mines have created fresh employment opportunities.

These include Marapong near Lephalale, Limpopo, and Vosman and the other townships close to eMalahleni, Mpumalanga.

In Seshego near Polokwane, Kamagugu outside Mbombela, and Mamelodi close to Pretoria, there is a demand for rental accommodation from those who already own a home in a more rural area but prefer to live close to work most of the time.

Seshego has the advantage of being close to the Capricorn College for FET. There, investors can expect to pay about R380,000 for a threebedroom home that they can let for about R5,000 a month, or roughly R2,000 a room.

New three-bedroom houses are available from about R370,000 in Mamelodi, and can easily be let for about R4,500 a month, or about R2,000 a room.

INTERNATIONAL Friday April 24 2015

Enter the tiger Speculation of a Philippine property bubble, yet to be confirmed by economists, is being driven by the country’s robust economic growth, which is also supporting its real estate industry WORDS: ANNA-MARIE SMITH :: PHOTOS: ISTOCK

“The positive focus on our country bodes well for the real estate industry, elevating its reputation as an investment favourite of investors and publicly listed foreign firms” Jose Antonio, Aprea chairman and Century Properties Group CEO

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he CBRE Metro Manila Market Review states that the Philippine property market continues to show no signs of a residential property bubble, despite growth in demand and supply.

The strong macroeconomic fundamentals that justify prevailing real estate values are thanks to the Philippines’ central bank’s conservative approach of taking pre-emptive measures to provide stability.

Investor confidence in the thriving Philippines emerging market, according to the World Bank, is being boosted by strong demographics within Southeast Asia and by regulatory governance that enhances collaborative business efforts.

Foreign interest in the rise of the Philippine economy has seen Goldman Sachs dubbing it one of the Next Asian Tigers. It estimates that the Philippines’ economy will be 14th largest in the world by 2050. This is in addition to HSBC’s prediction that the Philippines’ economy will be the 16th largest economy in the world, the fifth largest in Asia and the largest in Southeast Asia by 2050.

This market optimism, says Michael McCullough, group MD of KMC MAG, has been brought about by a number of factors that have helped create a favourable investment

INTERNATIONAL Friday April 24 2015

climate for foreign and local businesses, including low interest rates, quantitative easing and positive feedback from investors.

The IMF predicts that GDP growth, which at 5.8% is below the expected levels, will rise to 6.4% by 2016. Property developers and buyers can finance investments at relatively low interest rates of about 4%, now just above the all-time low of 3.5% seen in 2012 and the 9.68% average seen since 1985. Greater, yet contained, consumer spending can be seen in the recently eased inflationary environment of 2.7%, owing to lower living costs, including housing, water, electricity and transport.

The integration of the Philippine Chapter of the Asia Pacific Real Estate Association (Aprea) into the Association of Southeast Asian Nations (Asean) this year is providing a further fillip to the country’s property sector.

“The positive focus on our country bodes well for the real estate industry, elevating its reputation as an investment favourite of investors and publicly listed foreign firms,” said Aprea chairman Jose Antonio, who is also the CEO of Century Properties Group.

The rising skyline of Manila, the country’s economic powerhouse, representing 62% of national GDP, reflects the city’s status as the next desired Asian location for ultramodern business and retail centres after Singapore and Hong Kong. The flurry of construction activity follows the development of infrastructure that caters for the growing demand for office space from the international electronics and services industries.

The increased consumer spending that is feeding the flourishing retail sector, says McCullough, has brought about plans for the development of an additional 600,000m2 of new retail space by 2018.

Foreign investors, including South Africans who are looking beyond the established neighbouring markets, are set to benefit from the accelerated yet stable market. The South African Reserve Bank’s raising of foreign allowances from R4m to R10m will enable greater ease of entry into an increasingly competitive and more affordable Asian market.

As a lifestyle destination, this tropical archipelago of 7,107 islands provides investors of all ages and origins with quality living and potential long-term growth as well as greater affordability outside city locations.

The local Philippine population, who are on

“This market optimism is thanks to a number of factors that helped to create a favourable investment climate for foreign and local businesses, including low interest, quantitative easing and positive feedback from investors” Michael McCullough, MD, KMC MAG average 23 years old and earn on average a monthly disposable income of 16,000 Philippine peso (about R4,300), has access to mortgage rates of about 6%.

The prices of flats, based on the cost of 71,000 Philippine peso, or about R19,000, a square metre in central cities and 40,000 Philippine peso (about R11,000) a square metre further out could facilitate a conservative R1m investment for a 50m2 flat. Rental costs for a onebedroom city flat are on average 10,000 Philippine peso (about R2,700). There are cheaper options of about 5,000 Philippine peso (roughly R1,350) beyond the city centre.

The quality of life in the different regions of the Philippines makes for varied experiences. Well-heeled foreign residents and locals who enjoy the balmy island conditions may be faced with seasonal typhoons, language barriers and a service industry that legally employs 15-year-olds.

From a retirement expectancy perspective, the Philippines was ranked by International Living in 15th position out of 22 in the world’s top retirement havens in 2013.

The World Life Expectancy 2015 rankings shows the Philippines’ average of 73 years to be in 138th position out of 200, as against 83 years in Japan and Singapore and 82 years in Hong Kong.

South African real estate investors are set to benefit from initiatives driven by the Philippine government in support of the resurgence of the manufacturing and industrial sectors, growth in the hospitality and retail sectors and a significant reduction in office vacancies.

The Philippines was ranked

by International Living in 15th position out of 22 in the world’s top retirement havens in 2013

Metro Manila draws investment Things are looking pretty rosy in the Philippines — property in and around the capital is booming WORDS: LEA JACOBS :: PHOTO: ISTOCK

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etro Manila, an area comprising 16 cities near the capital in the Philippines, continues to grow rapidly, but there is a downside, namely congestion.

According to a report released in 2013, there have been calls to decongest Manila and provide the infrastructure that is needed to maintain the country’s healthy economy.

Despite this, the latest data released by Lamudi, a global property portal that focuses exclusively on emerging markets, shows that developers have paid little heed to the warnings, that there is still an abundant supply of property available and that buyers are still queuing up to invest.

There is a lack of data available regarding prices in this metropolis, yet the consensus is that property prices have soared in recent years. Certain areas, such as upmarket Makati, have seen the prices of flats and commercial property rise by about 50% a square metre since 2008.

A fully furnished 36m2 studio apartment in Makati’s CBD is on the market for 5.3-million Philippine peso (roughly R1.4m). The unit offers key-card elevator access and in-house amenities such as a spa, gym, pool and Laundromat. The property

is also available to rent at 43,000 Philippine peso (about R11,600) a month.

Prices of rentals in the quieter areas of this region also reflect the demand: a fairly basic double-storey three-bedroom 120m2 home in Makati city costs 55,000 Philippine peso (about R15,000) a month.

The Lamudi report states that property in Las Piñas is ideal for first-time buyers, but although properties are less expensive than those situated closer to the commercial hub of Makati, it appears that they sell at a premium.

A newly developed threebedroom, three-bathroom 250m2 home, for example, is on the market for 6.5-million Philippine peso (about R1,7m).

A 150m2 seven-bedroom home, fully furnished, in the same area is available to rent for 50,000 Philippine peso (about R13,000) a month.

The news that Standard & Poor’s raised the Philippines’ credit rating to investment grade in November last year has fuelled speculation

that the country is on track to attract more foreign capital inflows.

The boost in investor confidence couldn’t have come at a better time, given that various reports indicate that the property markets in other Asian countries are weakening.

The Lamudi survey found that 92% of agents and brokers were optimistic about the market’s future.

The survey also highlighted the top three barriers to economic growth, namely the economic outlook, political change and limitations on foreign investment.

Affordability appears to be a major issue for 60% of those polled, who indicated that they could not afford to buy a home. This, coupled with the demand for housing in Metro Manila, which has been estimated to grow by a staggering 6.5-million units by 2030, is undoubtedly going to put pressure on those who build homes as well as on people who desperately want to own a home of their own.

Certain areas, such as upmarket Makati, have seen the prices of flats and commercial property rise by about 50% a square metre since 2008

NEWS April 24 2015

Prime Central London stock up by 5,200 units

H

ousing stock in prime central London has increased by 8.6% since 2009, totalling 5,200 new residences. The area has outgrown Inner London boroughs by 4% as developers take advantage of low land costs following the 2008 market crash.

This is according to Pastor Real Estate, which says prime Central London has been high on the investment agenda since 2008, with both domestic and overseas buyers predicting the recent Indian summer enjoyed by the UK housing market. In the six years since 2009, 144 development schemes have been completed in prime

Central London, with almost two-thirds consisting of 10 units, most comprising studio and one-bedroom flats.

2015 sees 277 development schemes in the pipeline, which will deliver 7,179 units to the market and represents twice as many schemes and three times as many units than have been completed since 2009.

Responding to growing demands from overseas buyers coming into the market, and domestic buyers increasingly choosing inner-city family homes, developers are shifting from small single-occupancy units to larger homes suitable for families. There is at least one three-bedroom unit within

Five Joburg suburbs average R10m for freehold homes

Durban beachfront units from R500,000

A

t least five Johannesburg suburbs offer an average freehold home price of more than R10m. According to Sotheby’s International Realty, 114 homes in these areas have been sold in the past year.

They include Rosebank and Sandhurst, where the average freehold home price is now more than R16m, as well as Parktown, Dunkeld and Westcliff.

D

urban’s entry-level bachelor flats in the second-row block of flats on North Beach’s Golden Mile are selling for R500,000.

“On South Beach, units at this affordable price can be found in front-line blocks without sea views, or secondrow blocks with sea views,” says Carol Reynolds, Pam

Golding Properties area principal. “On the Golden Mile, front-facing flats will fetch prices of R1.5m, whereas on South Beach you can still find sea-facing units in wellmaintained blocks for under R1m. We’ve just sold two penthouses in South Beach with sea views for R650,000 and R750,000 respectively.”

R100,000 rentals common in exclusive Cape suburbs

I

n Bantry Bay, Clifton, Camps Bay, Fresnaye and the V&A Waterfront on the Western Cape’s Atlantic Seaboard, as well as in Southern Suburbs areas such as Bishopscourt, Constantia and Kenilworth, long-term residential rentals (12 months or more) of R60,000, R70,000 or R80,000 and upwards a month are becoming increasingly common, says Dexter Leite, rentals manager for Pam Golding Properties in the metro region.

“We have seen an increase in demand for long-term luxury residential rentals at the upper levels,” he says.

“A recent case in point was a property in Bantry Bay leased at R104,000 a month, rising to R114,000 in the second year of the 24-month lease. A flat in Fresnaye let for R100,000 a month, and two homes in Fresnaye and Bishopscourt each leased for R70,000 a month.”

Leite says his agency has properties listed at monthly

rentals of R120,000 in Bishopscourt, R100,000 in Kenilworth Upper, R80,000 in Constantia and R75,000 in Steenberg Golf Estate.

Student accommodation is also in high demand owing to the suburbs’ proximity to UCT and other colleges.

Monthly rentals range from about R5,000 a month for a one-bedroom flat to R20,000 for a four- or five-bedroom house where each roommate is expected to pay R5,000 a room on average.

71% of the developments.

There is also a marked increase in unit sizes, with an increase of 40% in units in application compared with those under construction.

“It’s notable that the websites promoting high-profile schemes — such as Clarges, 20 Grosvenor Square and the Chilterns — are now primarily promoting size, space and a full arsenal of luxury amenities,” says Susan Cohen, head of sales and lettings at Pastor Real Estate.

“London is moving away from single units and in years to come we will see more and more fabulously luxurious large lateral homes appearing on the market.”

“In addition, there are at least 15 other suburbs where the average price is now between R5m and R10m, led by Illovo and Sandown,” says Lew Geffen, chairman of Sotheby’s International Realty in SA. “More than 1,000 freehold homes have been sold in these areas in the past 12 months, while in Bedfordview, just to the east of the city, about 170 homes have been sold at an average price of R5.7m.”

Two reasons for optimism in 2015

T

here is increased interest in homes priced between R4m and R10m as well as higher individual bonds being applied for.

Mike van Alphen, national manager of the Rawson Property Group’s bond origination division, Rawson

Finance, says bonds are likely to be 14% to 16% higher than in 2014. Particularly encouraging are the latest figures for the number of first-time homebuyers being awarded bonds: 36% of bonds have been granted, many of them at 100%.

F O LLO W U S I N PRI N T O R O N LI N E

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This 42ha (108 acre) property enjoys a unique position within the famous Vredefort Dome, a Unesco World Heritage site.

It includes a beautiful three-bedroom homestead, two-bedroom guest cottage, one-bedroom staff cottage, 14-stall stable block, large barn, swimming pool and dam with covered deck. The buildings are protected by an electric fence and security system.

Established trees, rugged granite formations, three-phase electricity and an abundant water supply complete the property.

Offering enormous potential in a sought-after area, the property is also mere minutes from picturesque Parys, popular for its adventure sports, antiques, art and geological exploration.

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This immaculate north-facing 3 levelled 2 bedroom home has quality finishes and offers a unique contemporary design with well thought out use of space. Visualise yourself in the spa bath located in the "loft - like master bedroom or sipping cocktails on your private balcony with panoramic views. All this is further complemented by a 3 car garage, swimming pool and lovely outdoor areas. Darice Loeb 082 849 2635 | Lolly Unterslak 082 452 0905 | Web Ref: 89672

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