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RE S I DE N T I AL
13 2016 WWW.BDLIVE.CO.ZA WWW.BUSINESSLIVE.CO.ZA 24OCTOBER APRIL 2020
MUST-READ
Post-lockdown prospects PAGE 17
Junk status: where to from here? PAGE 20
A new generation of retirees PAGE 22
Steyn City in Midrand
Homeward bound
The Gauteng provincial government expects mass migration to swell population figures by 18.4% Virtual showhouse in Hyde Park over the next decade. Meanwhile, property developers are adjusting their offerings to meet demand and stay ahead of lockdown limitations PAGE 18 PAGE 22
OPINION ADVERTORIAL
After Covid-19: your key to the market Almost in the blink of an eye our world has changed forever, including how we buy and sell homes. Dr Andrew Golding of the Pam Golding Property group highlights how to unlock the post-pandemic residential property market WORDS AND PHOTO: SUPPLIED
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“In this regard we are in he global to visit homes for sale the advantageous position Covid-19 in person, Pam Golding Apartments of already having access to pandemic has1 and 2-Bedroom Properties will soon offer technological capability and had a major Starting both buyers and sellers from R1.195 million (VAT incl.) knowledge gained through impact on the all the technological our association and learning entire planet, from a advantages of an online experience via Eazi Real humanitarian perspective agency coupled with the Estate, which we acquired but also in terms of the benefits and scale of a 18 months ago. It already way we go about doing traditional agency. offers a user-friendly, business, whether as Of particular importance seamless and secure consumers or corporate to homeowners is the fact workspace,online high-speed fibre and meeting room platform, or commercial entities,”• Shared automated that this functionality will primarily servicing says Pam Golding Property • Clubhouse with gym, pool the andsubbar areaallow sellers to interact with group chief executive Pam Golding Properties • SecurityR2m withmarket. biometric access control and “As a consequence, we Dr Andrew Golding. agents from the first point cameras transforming and fine“From the decision to thermalare of contact, verification of tuningliving our paper-based sell a home to the final • Eco-friendly the property, client logon with grey water filtration processes into a customtransfer to the new owner, and authentication of ID • Battery back-up system for load-shedding designed, integrated a property transaction and signing of an exclusive the national road and Cape Townthrough to an onlinetosystem. This will is multidimensional. It • Easy access mandate be combined involves many steps offer and acceptance or International Airport with all the personal and professional that require specialised negotiation process and, expertise provided by expertise in a number ultimately, the processing NOWusOPEN of a virtual agreement our agents, enabling of disciplines including SHOWHOUSE / Fri: level 15h00-18.30 /of sale Sun: 14h00 - 17h00 to offer the same of area knowledge, accurateWed: 15h00-18.30 in a secure professionalism and skill valuations, pricing strategy, digital environment. View by Appointment • pamgolding.co.za/mzuri in an evolving property marketing, finance, legal landscape with increased and conveyancing. technology-driven activity.” “What the lockdown GET IN TOUCH 2 and 3-Bedroom has quickly demonstrated and 3-Bedroom Dr Golding says in2light of Starting from R1.895 (VAT Starting from R2.395 (VAT incl.) the fact that the lockdown ismillion that, as a incl.) key priority, PAMmillion GOLDING regulations will be lifted we needed to re-engineer PROPERTIES gradually, which means the real estate transaction pamgolding.co.za buyers are not yet able process rapidly to be Exclusively marketed by: capable of transacting Pam Golding P roperties online from A to Z without in any way precluding the Somerset West invaluable expertise and somersetwest@pamgolding. co.za negotiation skills of our agents, who are all currently Visit pamgolding.c o.za/mzuri for more details operating remotely on a decentralised basis.
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The gatehouse at Le Parc Residential Estate in Paarl
INVESTMENT UPDATE
There’s life after lockdown L Yes, there will be life after lockdown. South African investors are still making plans to buy, sell or rent WORDS: KIM MAXWELL :: PHOTOS: SUPPLIED
ife will go on after lockdown. Admittedly with more financial prudence and creativity – but savvy investors will be buying solid properties to let and some will be selling or delaying sales by switching to rental income. In what is certainly a buyer’s market, where are SA’s buyer and rental investor hotspots? According to the most recent PayProp Rental Index Annual Review, Gauteng is the second-most expensive province to rent in, after the Western Cape. Tenants in Gauteng paid 3.66% more in Q4 2019 than in Q4 2018, a growth rate that is slightly higher than the average national increase of 3.27%. Although 2020 is a different
“There’s a trend of more affluent South Africans choosing to rent rather than buy high-end properties,” says Jawitz Properties Johannesburg Northern Suburbs rental consultant Catherine de Villiers. “I’d advise investors to buy in areas that target the middle to higher price brackets, because there is generally less risk of tenants not paying their rent.” De Villiers suggests looking at suburbs that are in demand but not oversubscribed, where prices have held their own and there aren’t too many new units available. In her view areas like Athol, Illovo, Melrose, Craighall, Craighall Park, Dunkeld West and Rosebank currently have good rental potential.
story, one that so far has been fraught with economic unpredictability, Seeff Property Group chairman Samuel Seeff believes the rental market could benefit. “Rental demand will climb notably as many will be forced to rent for financial reasons or while they wait to see how the economy unfolds,” he says.
LESS RISK The PayProp review also tracks tenant credit and payment data. “While the percentage of high-risk tenants and average credit score in Gauteng were worse than the national average, both measures improved from Q4 2018,” says Johnette Smuts, PayProp data and analytics head.
HOW TO RIDE OUT THE TIDE The inside track from developers and agents: Horizon Capital’s David Sedgwick: We are entering a period of economic uncertainty like we haven’t seen before. We’ll continue to ensure that our new developments are adaptable to the environment we operate in. Our buildings now come standard with back-up generators and, in some cases, off-the-grid water supply. Operationally, a lot more engagement is being done virtually via WhatsApp video calls, FaceTime and Zoom. Seeff George licensee Pieter Jordaan: The Garden Route is benefiting from the semigration trend, which is likely to take off again within a
few months, following the lockdown lifting. Prices are well below those of alternatives such as Cape Town. Sellers are already taking lower offers of up to 10% below the asking price. Agents are taking full advantage of digital tools to correspond with buyers and sellers. The rental market has also been quite active. Greeff Christie’s rentals manager Mark Burt: Investors should look for opportunities that generate a rental return in the region of R8,000 to R18,000 per month. This seems to be our least affected segment, with a vacancy rate of only 7%. Remember to look after good tenants
– this may be the only factor you can control in an ever-changing market. Greeff Christie’s International Real Estate sales director Tim Greeff: Investors who purchased for shortterm rentals should now consider long-term letting because tourism will be considerably slower during the course of 2020. Le Parc Residential Estate’s Adele Combrinck: For marketing and sales during lockdown, our team has harnessed all digital platforms and is distributing content that includes images and virtual and video tours of the estate and finished properties.
Horizon Capital’s The Cedar in Gardens, Cape Town
In Cape Town, her colleague Hayley VannHerbert, Jawitz Properties Southern Suburbs sales manager, offers a different view. “Popular areas such as Claremont and Kenilworth are doing well. High-end properties are the sector of the market that is struggling, because owners expect the same rentals they received over the past two years. “However, rental properties that are correctly priced go very quickly,” Vann-Herbert says, citing the example of a Constantia property that was let within 24 hours recently.
RENTAL BRACKETS The PayProp data shows that a smaller percentage of people nationally were renting in the lower price bands in Q4 2019 vs Q4 2018, whereas the percentage of tenants in higher price brackets increased. Yet in middle brackets little has changed over the past year – in the last quarter, 32.4% of tenancies fell within this middle bracket versus 32.9% the year before. How would 2020 pan out for investors looking for tenants in the lower, middle and higher price brackets? Cape Town developer Horizon Capital has boutique residential developments on the Atlantic Seaboard and in the City Bowl. MD David Sedgwick says the market is restrained. “Rentals in the higher price bracket have dropped considerably over the past 12 to 18 months and I wouldn’t be surprised to see this trend continue. I think 2020 will be another year of tenant retention across all segments.”
Weighted average national rental growth rate vs inflation (year on year): 2018-2019 Weighted average national rental growth rate
Inflation (year on year)
5% 4%
4%
3.7% 3.6% 3.6%
3%
3.2%
2.5%
2% 1% 0%
A Greeff Christie’s International Real Estate property in the popular Cape Town suburb of Claremont
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EDITORIAL TEAM Editor: Debbie Loots Designer: Samantha Durand
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PRODUCED BY BLACKSTAR PROPERTY PUBLISHING
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Horizon Capital doesn’t develop on spec. Construction starts only once there are sufficient presales to begin a project. But should developers consider listing unsold units as rentals to meet cash flow challenges? “It’s difficult to do this because Sars has changed its regulations, requiring developers to pay 15% VAT immediately on new developments that are let, even if it is a temporary measure to assist with cash flow until a purchaser comes along,” says Sedgwick. “Sars sees this as a change in use or intention. We hope it will reconsider this policy in light of the economic conditions.”
SALES DEMAND Duane Butler, Seeff’s licensee for Randburg, says agents are corresponding digitally with sellers in preparation for a pick-up in demand following lockdown. The R1m to R2.5m price range should be active in the greater Randburg region. “This sector offers excellent stock and value for buyers,” Butler says. “Rentals will be busy, with some landlords giving a level of relief to tenants.” Pam Golding Properties Fourways area manager Ken Woollcott says there has been enormous expansion in Fourways in the past few years, including developments aimed at firsttime buyers. “Garden units in popular complexes are in demand,” he says. How are rentals in the Winelands faring? Adele Combrinck, development consultant at Le Parc Residential Estate in Paarl, says that as developers they’ve been prudent not to introduce too much stock. “At Le Parc our investor buyers have been able to secure tenants reasonably quickly,” she says. “Most likely our success is thanks to the fact that we appeal to a middle-to-upper tenant – professional couples or young families. Our rental homes start from about R14,000 per month.” Covid-19 will surely slow down property sales, though. “We don’t believe there needs to be much more incentive beyond price adjustments,” says Samuel Seeff. “The period after Covid-19 will
be characterised by pent-up demand from buyers eagerly waiting to take advantage of the market, especially in the sub-R1.5m sector, up to R3m in some areas.” He is confident the market will settle despite initial delays in transactions owing to deeds office closures. Combrinck agrees. “Le Parc Residential Estate appeals to buyers looking to purchase homes in the Winelands in the R2m to R3.5m price band. This is arguably the most active segment and it will most likely remain unchanged for the foreseeable future,” she says, adding that buyers typically would have this type of access only in a more expensive estate. “Price will be important in the rental market. Landlords will need to keep rentals at current rates for renewals in the next six months,” says Seeff Winelands rentals manager Marinda Uys. “We expect higher rental demand but also an increase in stock from developers and from properties that aren’t selling. Tenants under financial pressure will look to move to cheaper accommodation.” Lindsay Goodman of Greeff Christie’s International Real Estate in Hout Bay has had a lot of interest from overseas buyers wanting to purchase property across all price levels. “As the rand weakens, we see more interest from younger buyers working overseas who want to get their foot on the property ladder,” she says. “Domestically, many buyers look for distressed sellers where they can get a ‘good buy’, given the current circumstances.” “Don’t sell. Rather find out what the market wants and give it to them”, is the advice from Empire Wealth CEO Anton Breytenbach to investors. He suggests turning a property into a multi-let to be used for residential rentals, shared office space, mini industrial units or pop-up retail. “We are going into the biggest buyer’s market of our time,” he says. “Aspiring investors should get access to capital now. When the market swims downstream, you swim upstream.”
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HOT TOPIC
Homeward bound
The Gauteng provincial government expects mass migration to swell population figures by 18.4% over the next decade. Meanwhile, property developers are adjusting their offerings to meet demand and stay ahead of lockdown limitations WORDS: DEBBIE HATHWAY :: PHOTOS: SUPPLIED AND SHUTTERSTOCK
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frica is the second most populous continent after Asia. Its current population of nearly 1-billion is expected to rise to 2.2-billion over the next 40 years, according to Stats SA’s National Development Plan (NDP) 2030. Midyear estimates released in 2018 peg the country’s population at an estimated 57.7-million, with a net immigration estimate of 1.02-million people expected between 2016 and 2021. Most international migrants (47.5%) settle in Gauteng, SA’s economic hub, attracted by commercial opportunities, jobs and the promise of a better life. The NDP 2030 references data provided by the Global Commission on International Migration that about 3% of the world population are international
migrants who have changed country of residence over the past five years. In SA this figure is estimated to be about 2.7%. In Gauteng, the international migrant gateway to the country, it is about 13%. Over the next 18 years the population in this province is expected to increase from 10.8-million to 14.1-million.
RAPID URBANISATION Property developers are gearing up for a rise in housing demand as urbanisation increases, particularly in the price bracket just below R1m. The number of applications for home loans at the start of 2020 was the highest it has been in three years, driven largely by purchases in that bracket. The interest rate has since been decreased by 100 basis points, representing a saving of R650 per month on a R1m bond repayment.
“With increasing competition from banks to lend, some first-time buyers qualify for bonds of more than 100%. This, along with the low interest rate and the current ‘buyer’s market’, means that any prospective buyer is in the best position to make a property acquisition now. Obviously, where one decides to invest is key and potential buyers should be eyeing growth areas and estates that offer more bang for their buck through strong security and estate facilities, with the potential for value growth over time,” says Leon van der Vyver, development manager of Olivewood Village, a sought-after family estate in Kempton Park.
POPULAR AREAS Meanwhile, Lightstone Property released results indicating how properties perform in the sectional title,
freehold and estate property sales market. Sectional title sales of properties aged 30 to 39 years have outperformed other age bands, with average annual growth of 4.7%. This is followed by units aged 20 to 29 years, with average annual growth of 4.2% over the past decade. In the past five years, the 30- to 39-year-old sectional title properties sold realised an average of 29% compared with 22% for their 20- to 29-year-old counterparts. Midrand and Modderfontein were the most popular areas in terms of volume of fiveyear-old properties sold in the same period. The report also highlights that single women are buying more sectional title properties older than 10 years compared with single men or couples (married or unmarried).
“Potential buyers should be eyeing growth areas and estates
that offer more bang for their buck through strong security and estate facilities, with the potential for value growth over time” Leon van der Vyver, development manager, Olivewood Village
Munyaka, a Balwin Properties development in Waterfall
Stefan Botha Director, Rainmaker Marketing
Steyn City in Midrand
Lambert Bezuidenhout Sales manager, Steyn City
Steve Brookes Founder and CEO, Balwin Properties
Reinier van Loggerenberg MD, Craft Homes
A WHOLE NEW WORLD Property buying and viewing options are increasing online, especially since the advent of the Covid-19 pandemic. HomeFront asked selected developers how they’re adapting to these and other market shifts.
Lagoon units at Munyaka
With the early effects of the Covid-19 pandemic being realised in SA, JSElisted Balwin Properties had launched its new development Munyaka in Waterfall, Midrand, and sold 555 apartments totalling R850m in four days. Sales included two ultra-luxurious beachfront penthouses at a new benchmark of R30m each and two of four superluxurious beachfront units at R10m each. Interested buyers snapped up unit variations across the
range, with the entry-level option offering appealing access to an unsurpassed lifestyle that centres around a magnificent crystal-clear lagoon the size of seven rugby fields. Developers are well used to selling off plan, so the restrictions imposed by the need to control the spread of Covid-19 will not necessarily impact sales. We have worked very closely with our architects to bring something exceptional to South African sectional title buyers. We
believe Munyaka will become the crown jewel in our development portfolio. It will set a new standard for lifestyle estate living not only in Waterfall but indeed in the country. – Steve Brookes, founder and CEO, Balwin Properties Population growth, urbanisation, advances in technology, the switch to a service-oriented economy and a new awareness of the value of time mean that housing needs are changing. Steyn City has
taken note of these changes to provide a multifaceted home offering coupled with exceptional lifestyle. We’re seeing rising interest in options that help bring the home closer to the workplace. This trend is influenced by the twin dynamics of government’s policy to create highdensity developments near work hubs, and the reality that the workplace will eventually follow the worker. Steyn City’s developers have anticipated this by
creating residences that appeal to a lifestyle rather than a demographic: there are infrastructure, facilities, accommodation types and amenities to suit every age and family stage. All the freehold homes, apartments and clusters have access to the 810ha parkland, offering residents one of the largest back gardens in the country. A host of convenient facilities enhance the all-important work-life balance. Plus there is the Steyn City Schools campus on site,
HOMEFRONT whereas the commercial centre Capital Park reduces time spent commuting. Steyn City is committed to upholding the regulations of lockdown and prioritises clients’ safety. Videos illustrating highlights of the development have been uploaded to our website, where potential buyers can view the offering online. The sales department can be contacted to schedule a viewing after lockdown. Interested parties may reserve units from developers’ stock, guaranteeing a fixed price, and conclude the agreement of sale if they’ve already viewed the property and wish to proceed with
their purchase. – Lambert Bezuidenhout, sales manager, Steyn City Craft Homes is launching three developments catering for different life stages over the next three weeks. Springwood in Craigavon comprises 64 freestanding duplexes priced from R1,699,000. These threebedroom, two-and-ahalf-bathroom homes with private gardens are a step up for a young couple starting a family. Springwood has a green belt, a clubhouse, a pool and a kids’ play area. The Woods in Kyalami offers a mix of apartments and freestanding homes.
Phase 1 comprises 63 apartments (with two bedrooms and two bathrooms) and 52 duplexes (with three bedrooms and two-and-a-half bathrooms), whereas Phase 2 will be made up of 102 apartments and 43 duplexes. The development has a green belt as well as a park, a communal clubhouse and a play area for children. Highbridge in Bryanston consists of only 12 large freestanding homes priced from R3.45m with incredible finishes and optional pools. They have three bedrooms each, all en suite, and a guest bathroom downstairs. Traditionally we get a lot
more engagement online. There is an appointment booking form and virtual tours available on our website. People can reserve units online from the launch day or buy online now for the developments currently selling. A successful online sale all depends where the buyer is in the buying cycle – if they know what’s out there and they know what value they should be getting, it is an easy sale. It’s not that different to selling off plan. We differentiate ourselves by offering the best value in niche markets. Affordability is a big thing, but you have to provide value. The market is currently very
The clubhouse at Olivewood Village in Kempton Park
Steyn City is renowned for its green spaces
Springwood, a new Craft Homes development in Craigavon
C A NVAS FOR YO U R MASTERPIECE Steyn C it y Phase II stands now released
responsive in the R2m price bracket, yet demand is high in the R1m market too. We’re also seeing resales in our own stable, which is a dream. – Reinier van Loggerenberg, MD, Craft Homes Development offerings between R600,000 and R1m by developers International Housing Solutions are seeing significant growth in sales. These properties appeal to first-time buyers attracted by secure environments in the right locations. Sustainability is another factor. Developers are aware of buyers’ need to save costs and mitigate the challenges of load shedding and water shortages. In terms of Covid-19, consumers are attending Zoom Meetings with sales consultants and using interactive modules to see floor plans and experience 360˚ views of the environment. These methods, as well as Facebook Live interactions, are all tools we had been using already. Lockdown has simply increased people’s trust in them. Currently we are seeing an increase in engagement of between 40% and 120% on various websites we host. People are driven there through social media and are drawn by the potential for live chats, visualisation tools, online interactive modules and various property shops. Although we are going through a difficult period, interest has spiked because people are more open to property purchases online. – Stefan Botha, director, Rainmaker Marketing
Following the success of Phase 1, Steyn City is releasing spectacular new stands in Phase II. This beautifully planted suburb with north facing views overlooks the first nine fairways and flowing river, and is within easy walking distance from the school campus, Aquatic Centre, children’s play nodes such as the Dino Park and teen’s Skate Park, and soon to be developed shopping centre off Cedar Road. Take advantage of this lifetime opportunity to build your dream home in a world of convenience and luxury. Stands 800m 2 and up – from R3 million.
Call 010 597 1040 Mark: 082 559 2989 Leanne: 072 078 9562 sales@steyncity.co.za steyncity.co.za
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Junk status: where to from here?
SA’s recent credit rating downgrade and the effects of the Covid-19 lockdown have an already ailing economy reeling as government scrambles for solutions. What does this mean for the property industry? WORDS: DEBBIE LOOTS :: PHOTOS: SUPPLIED AND SHUTTERSTOCK
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or a financially challenged country in the grip of a national lockdown, the Moody’s downgrade of SA to junk status could not have happened at a worse time, according to government. The other two major credit rating agencies, Fitch and Standard & Poor’s (S&P), downgraded the country to subinvestment in 2017, and although analysts anticipated the same from Moody’s, the announcement came as a low blow to an economy already against the ropes.
CREDIT HEALTH Moreover, navigating a national Covid-19 lockdown alongside the rest of the world experiencing its own medical and economic meltdown, SA’s latest credit rating downgrade may seem a lesser concern right now but it is significant – more than ever before. Ratings represent the credit health of a country’s government and investors, especially foreign ones,
really take these measures to heart. Moreover, it is the first time since 1994 that SA has not had an investmentgrade rating and this sends a message of no confidence to prospective investors.
RESET BUTTON Could this latest downgrade be the catalyst to press the reset button on the South African economy? Or is it a final wake-up call? The jury is out and there is as much diverse opinion about government’s approach to combatting the spread of Covid-19 as there is about how best to fan back to life the fast-dying embers of our economy. Either way, the economy needs urgent CPR and, as one of the major contributors to the overall GDP of the country, the property sector represents a vital lifeline. HomeFront asked market experts about SA’s local and international property investment potential and how they advise their clients to navigate the real estate market during this unprecedented time.
“The property market will remain a bellwether for the challenges in the country and will reflect the broader macroeconomic trends, but ultimately people always need somewhere to live” Samuel Seeff, chairman, Seeff Property Group
INDUSTRY OPINIONS First National Bank
Pam Golding Property group
Even though downgrade expectations largely have been priced in, we believe sentiment will still take a knock. This could eventually affect investment and purchasing decisions in the property market. Firms will likely spend less on investment, which in turn limits employment prospects for households and, ultimately, their income growth prospects. This bodes ill for market activity. Nevertheless, the recently lowered interest rate should cushion the market. The impact on international investors is rather ambiguous. On the one hand, loss in confidence could curtail their appetite. On the other hand, weaker currency makes it much cheaper for investors to purchase property in SA. Combined with already weakening price in affluent segments, this could spur purchasing activity from international investors. We expect the virus shock to have a sharp but short-lived impact on growth in SA. Positively, the policy response (including from the private sector and civil society) to Covid-19 has been considerable and far-reaching. Along with income support, a range of fiscal and monetary policies has ramped up the incentives for firms not to lay off workers and for financial institutions to continue lending, which could help minimise the effect of the outbreak. – Siphamandla Mkhwanazi, economist, FNB Property
Although the market initially reacted negatively to the downgrade, there is a growing acknowledgement that, largely, the long-anticipated decision had already been priced in. A severe recession will mean both buyers and sellers are worse off. This will represent a significant headwind for the housing market. Given the volatility of global stock markets, confidence in bricks and mortar could increase. Because property has proved a sound investment, many will regard it as a safe haven amid the economic uncertainty. We are in for a period of weakness, the extent depending on the severity of the global recession and lifestyle changes in the wake of the lockdown. During periods of turmoil, foreign investors withdraw their assets from emerging markets, favouring developed economies. However, SA appears to be dealing with the crisis decisively and as soon as signs of a recovery emerge, renowned subregions like the Atlantic Seaboard may attract foreign investment again. As banks’ balance sheets come under pressure, they may no longer be as keen to extend credit at favourable rates. This would be regrettable, because bank lending appetite is a positive factor that continued to underpin the housing market even as the local economy remained subdued. – Dr Andrew Golding, CE, Pam Golding Property group
Dogon Properties
Seeff Property Group
We have been struggling to achieve acceptable prices for sellers for two years now, and the downgrade is not really going to make things much worse. SA has shown impressive leadership and incredible solidarity, which bodes well for the future. Investors and home buyers will realise that there has never been a better opportunity to achieve a good property portfolio. However, many are uncertain about their income or employment prospects, making it difficult to plan ahead. Homeowners can alleviate strain by negotiating interest rates and investigating more cost-effective insurance policies. Short-term financial relief is available too. To astute investors: after lockdown the world will return to a new normal and properties will be available at bargain prices with low interest rates. Take advantage of this. As SA will be coming from a low base, we will have a rapid recovery. Industry, mining and commerce will start up again in a world with a new mindset. This includes banks that will have to review their policies to assist the property industry and all other sectors for economic recovery. First-time buyers, go ahead: banks still seem to be bullish in their lending as the Reserve Bank is supportive of stimulus measures. – Denise Dogon, CEO, Dogon Properties
Rather than impacting it negatively, the Covid-19 lockdown emergence phase will be characterised by pent-up demand in the primary residential market. Buyers are eagerly waiting to take advantage of market conditions – lower transfer duty, further cuts to the interest rate, eager sellers who are willing to reduce their asking prices and banks who are likely to be keen to lend. We do not expect to see any notable uptick in sales above R20m or in foreign sales. That said, an astute foreign buyer can certainly find excellent value in our market and standard of living. For local wealthy buyers, the upper end of the market offers exceptional value. Sellers have already cut their prices by up to 20% and buyers will find that there is room to negotiate further – but their commitment to investing in property will depend largely on their confidence in the future of the country. We expect a busy market. Interestingly, our international partner, Hamptons International, reported that post-Brexit they experienced two of their best months in trade. The property market will remain a bellwether for the challenges in the country and will reflect the broader macroeconomic trends, but ultimately people always need somewhere to live. – Samuel Seeff, chairman, Seeff Property Group
HOMEFRONT Rawson Finance
Lanis Salmon Properties
In a downgraded economy, the government will probably divert money from certain internal investments and projects to service its debt. Foreign investors will be wary and the capital outflow may increase, which will weaken our currency. This will lead to higher inflation, impacting on the equity growth in properties as well as general commodity prices. An economy with a junk rating affects the operating environment for our lenders and as a result our five banks have also been downgraded. Most were prepared, though, and have reserves to withstand a downgrade. This is good news for the property sector, as banks will continue to lend albeit on a slightly tighter scale. The Covid-19 crisis will cause the world economy to shrink by at least 1%, but measures are being implemented to cushion its effect. Consumers must not lose hope – economic structural reforms will assist in mitigating the impact in the short to medium term. Many companies are under financial strain, which will affect employment and prompt banks to revise their lending policies. They will have to price for risks, and this will influence the interest rates and the loan-to-value percentages they are prepared to accept. – Leonard Kondowe, national hub manager, Rawson Finance
If you have to put your home on the market now, talk to agents in your area about pricing and be honest about your financial needs so you can receive the best advice. Landlords who have good tenants in place should waive increases in rent if possible. Despite the initial negative reaction to the downgrade, there will be little direct impact on homeownership. The property industry was already experiencing a buyer’s market and this will continue, with supply outweighing demand as more properties may be placed on the market to alleviate financial strain. This will allow buyers to secure good deals and take advantage of the increased transfer duty exemptions and interest rates that have been lowered even further. Property has always proved a more stable investment and is resilient because it reflects improvements in market factors quickly. In addition, accommodation is always needed whatever situation we find ourselves in. – Lanis Salmon, CEO, Lanis Salmon Properties
RealNet
Tyson Properties
VREDEHOEK, CAPE TOWN
The South African economy was already under pressure before the expected downgrade and Covid-19 and there is going to be a lot of uncertainty about job security, which will impact the banks’ decisions to lend money. This will reduce the number of sales being concluded and affect property prices as it did in 2008 with the global financial crisis. We are, however, not anticipating the impact to be as severe as it was then, because in 2008 we came off a very buoyant market as opposed to the subdued market we have been working in lately. International buyers only make up a small percentage of all the sales in SA and we were already seeing a decline before the downgrade, owing to concerns about land reform and investment security. The downgrade will further affect this. We may see some international buyers taking advantage of the weaker rand but international travel restrictions will hamper this. Sellers should re-enter the market sensibly after lockdown. There will be more stock because of job losses so it is crucial to price properties correctly. There will be fewer buyers and a bigger selection to choose from. Working on a sole mandate will allow real estate companies to invest more in the sale through video tours and digital marketing. Tyson Properties agents are ready and trained to deal with sales and rentals under strict coronavirus guidelines. – Chris Tyson, MD, Tyson Properties
In the current circumstances, all the usual “rules” concerning a downgrade are suspended and its effect will probably be much less severe than it could have been. The playing field is being levelled by other countries and financial VREDEHOEK, CAPE TOWN institutions also being downgraded. International oil prices have crashed and the markets had anticipated the downgrade and already priced it in. VREDEHOEK, CAPE crisis TOWN The Covid-19 has necessitated large drops in interest rates to make things easier for consumers. Fortunately the Reserve Bank still has scope to do this. Consequently, we would advise against any “panic selling”. The real estate and other markets will stabilise and that will be the time for owners and investors to make decisions. Apart from capitalising on the weak rand, international investors’ interest may in fact be further boosted by SA’s swift and organised response to Covid-19. Such a massive effort to combat the effects of the lockdown is remarkable for a developing country. South African banks have anticipated the downgrade and transfer built up additional From R2.495 million (incl. VAT) no duty reserves. This enables them to assist borrowers with reduced and deferred repayments. Meanwhile, falling interest rates will lower the cost of new loans and encourage lending to those with good credit records. – Gerhard • should Back-up power supply From R2.495 million (incl. Kotze, VAT) no transfer duty MD, RealNet
YOUR PEACE IN THE CITY
YOUR PEACE IN THE CITY YOUR PEACE IN THE CITY
• Sea, mountain and city views
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From R2.495 millioncontemporary (incl. VAT) nodesign transfer duty • Inspiring • Back-up power supply by award winning architects • Sea, mountain and city views • Back-up power supply • Inspiring contemporary design • Secure parking and excellent security • Sea, mountain and city views award winning architects • PEACE 10 exclusive apartments HE PEACE CE E CITY CITY IN THE YOUR INbyTHE CITY YOUR PEACE YOUR CITY PEACE IN PEACE THE YOUR IN CITY THE IN THE CITY CITY YOUR YOUR IN THE PEACE PEACE YOUR CITY YOUR IN IN PEACE THE THE PEACE CITY CITY IN YOUR THE IN THE CITY PEACE YOUR CITY IN PEACE THE CITY IN THE CITY • Inspiring contemporary design • Secure parking and excellent security • 1 penthouse private jacuzzi Gerhard Kotze,with MD, RealNet by award winning architects • 10 exclusive apartments • 1 penthouse suite with private jacuzzi • Secure parking and excellent security • 1 penthouse with private jacuzzi • 10 exclusive apartments • 1 penthouse suite with private jacuzzi www.TheVera.CapeTown • 1 penthouse with private jacuzzi T) lion )95 no no million transfer (incl. transfer VAT) From (incl. duty duty no R2.495 VAT) From transfer no From million R2.495 transfer duty R2.495 (incl. million duty million VAT) From (incl. no (incl. R2.495 VAT) transfer VAT) nomillion transfer duty noFrom transfer From (incl. duty R2.495 R2.495 VAT) duty no million From million transfer R2.495 From (incl. (incl. duty R2.495 VAT) million VAT)no no million transfer (incl. transfer From VAT) (incl. duty duty no R2.495 VAT) transfer no From million transfer duty R2.495 (incl. duty million VAT) no(incl. transfer VAT)duty no transfer duty • 1 penthouse suite with private jacuzzi
“We would advise against any ‘panic selling’. The real estate and other markets will stabilise and that will be the time for owners and investors to make decisions”
www.TheVera.CapeTown
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ORANJEZICHT, CAPE TOWN ORANJEZICHT, CAPE TOWN ORANJEZICHT, CAPE TOWN
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HOMEFRONT PROPERTY NEWS
Industry responds to second interest rate cut
L
ess than a month after the interest rate was reduced, the Reserve Bank announced another rate cut of a percentage point, bringing the prime interest rate to 7.75%. This will help many homeowners hold onto their homes and encourage first-time buyers to take the plunge. Seeff Property Group chairman Samuel Seeff applauds the announcement,
saying this necessary step takes the interest rate to a historic new low. “The two cuts are vital for recovery after the lockdown,” he says. “They provide a saving of about 20% for property buyers and a significant boost for demand.” Pam Golding Property group CE Dr Andrew Golding welcomes the cut, saying it offers significant relief to homeowners and indebted households. “While this will
not offset the negative effects of a total loss of income for those not able to work from home or not designated as essential workers, this move will go some way towards easing the pressures on the residential housing market. For those with mortgages or seeking finance to acquire a home it will help pave the way for recovery once the lockdown restrictions are eased and economic activity begins to recover.”
How banks are helping homeowners
F
our of SA’s major banks – Absa, FNB, Nedbank and Standard Bank – have announced measures to help struggling consumers affected by the Covid-19 lockdown repay their loans. Clients should contact their banks as soon as possible rather than waiting until the last moment before requesting a payment “holiday” or partial payment options, because in most cases relief is offered only to clients whose accounts are up to date. • Absa provides optin payment relief to all customers whose accounts were up to date before the Covid-19 crisis. This includes reduced monthly payments for an agreed period or deferred payments for three months. It is still
best to continue paying if possible, however, as interest is due for the relief period and the existing loan period will be extended. Apply here: bondrs@absa. co.za; https://www.absa. co.za/media-centre/pressstatements/2020/covid-19payment-relief-plan/. • FNB offers relief across all types of loans and credit arrangements from April 1 to June 30, provided that accounts are in good standing. Interest rates on any Covid-19 interventions will be reduced, and no fees will apply. Apply through the usual digital and assisted banking channels and a dedicated Covid-19 icon on the FNB banking app. • Nedbank explains its relief options and how to apply in a comprehensive Q&A
document at https://www. nedbank.co.za/content/ dam/nedbank/Campaigns/ covid19/Covid-19_ PaymentArrangements_Q&A _2020.pdf. Call Nedbank’s dedicated debt relief centre on 0860 110 702 or e-mail HLCollections@ Nedbank.co.za or MoratoriumRequest@ Nedbank.co.za. • Standard Bank extends instant payment relief to small businesses and students, and various debt relief options for other clients, including those with home loans. E-mail debtcarecentre@ standardbank.co.za, call 0860 123 000 or request a call-back at https:// www.standardbank.co.za/ southafrica/personal/ contact-us#modal.
Survey reveals lockdown effect on property
S
avills Global Market Sentiment Survey, a review evaluating the effect of the Covid-19 pandemic on the global property market, highlights that 67% of countries around the world are experiencing a “moderate negative impact” while 29% are suffering a “severely negative impact”. In association with Savills, Pam Golding Property group CE Dr Andrew Golding brings the lockdown reality home by tracking its impact on the South African residential property market.
In the first of a series of global sentiment surveys, Golding says although it is possible to transact and agents keep buyers in the loop remotely, the closure of deeds offices causes a delay in the processing of concluded but unregistered transactions. This has dire economic ramifications. Furthermore, although transactions that are under way can be processed online partially, the market is more or less in limbo until the lockdown is lifted. “This means no transfers are taking place, municipalities are not
issuing rates clearance certificates and the ability of service providers issuing compliance certificates may be constrained.” Golding foresees farreaching consequences. “The property sector, together with finance and business services, was the second biggest contributor to overall GDP growth in 2019, according to Statistics SA. The freezing of the industry means government is precluded from receiving muchneeded revenue from transfer duty payable from transactions already being
processed – a significant contributor to Sars. “The implications of the inability to transact will be broad, especially for distressed sellers in the current economic recession, as they remain indebted and under pressure from creditors, who are in turn similarly impacted.” In addition, there are roughly 50,000 property professionals and office personnel who will not be earning an income on sales as the industry is commission-based. And because the current pipeline is now held up in the deeds
offices, any new cash flow is halted. Golding recognises the crisis is a humanitarian issue first, but points out that even the partial reopening of deeds offices would bring significant relief. Post-lockdown he hopes for pent-up demand from transactions already in progress. He foresees financial distress giving rise to a repricing of certain markets, different supply and demand scenarios in different areas and the likelihood of a new way of viewing properties and transacting online.
Rabie caters for a new generation of retirees
R
abie Property Group’s retirement estate at Clara Anna Fontein in Durbanville has four show houses of various configurations available for viewing, with the first residents set to take occupation in June. Clara Anna Fontein is part of the developer’s Oasis Life Retirement Estates, a collection of luxury developments specifically designed with a newgeneration retiree in mind. “Without compromising on style and contemporary architecture, we carefully design our Oasis Life homes to ensure that every layout is practical and smart,” says Rabie Property Group director Miguel Rodrigues. “We also take great care to future-proof every home.” Considering easy mobility
and comfort, the interiors are all understatedly elegant, offering single levels, raised bathroom amenities, slip-resistant floors and easy-to-grip door and cupboard handles. A 24/7 Call4Care system in every home and secure wheelchairfriendly pathways within the security of the village complement the offering. “Our completed Clara Anna Fontein homes showcase how we have age-tailored design,” Rodrigues says. “The open-plan design allows for flow from the modern kitchen to the sunny lounge and covered patio. The bedrooms are spacious and the bathrooms all underline an innovative way of presenting retirement homes.”
DEVELOPMENT NEWS
Balwin and Absa launch High-end Hyde Park SA’s first green home loan development goes virtual
B
alwin Properties and Absa recently launched the Absa Eco Home Loan, the first sustainable home loan in the country. Balwin Properties CEO and founder Steve Brookes
(below) sees the new partnership with Absa as another sustainable milestone in the company’s continued drive to deliver innovative green buildings of quality.
“The idea of a green home loan was inspired by the International Finance Corporation’s [IFC] Green Bond,” he says. “I was impressed by its achievement driving climate-smart investment and saw an opportunity to extend this philosophy to our customers.” According to Brookes, Absa was the obvious choice when it came to finding a like-minded and innovative partner with the right technical expertise and delivery capabilities to develop such a product. “The Eco Home Loan is testament to Absa’s commitment to creating customer-centred products and future residential property needs,” says Absa Home Loans managing executive Geoff Lee. “Sustainable living is a priority for Absa’s customers and so it should be for us.” Grahame Cruickshanks, managing executive for
market engagement at Green Building Council SA, says the Absa Eco Home Loan is an exciting first step towards increasing accessibility to green homes and an important catalyst since the launch of the Edge rating tool in 2015. An innovation of the IFC, Edge software proves that building green is financially viable, which helps to grow the green building trend. “Using Edge, we now have a cost-effective planning tool to help us build green based on occupant behaviour, building type and the local climate,” says Brookes. “Edge registration provides environmentally conscious buyers and tenants with the assurance that they are minimising their footprint while saving on utility costs over the long term. The Absa Eco Home Loan enhances the benefits of Edge certification by lowering the cost of finance for our customers.”
L
egaro Properties’ luxury development in Hyde Park, 38 Morsim, is nearly sold out, with the remaining four of its 12 duplexes now available for virtual viewing. Set among mature retained trees in one of Johannesburg’s most exclusive suburbs, these homes feature high-end design elements and offer a secure family lifestyle. During the designing and planning phases, Daffonchio Architects was mindful of the existing old trees on the site and incorporated several of them into the plans. The resulting designs are unique, as the trees provide natural shade and privacy, enhancing the sense of peacefulness that pervades the estate. All the homes have private gardens and several have splash pools. The interiors are spacious, with high ceilings, quality finishes and bespoke design
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can happen with other similar sealants, and has a permanent elasticity under all climatic conditions. Hybriflex-540 can be painted after 24 hours using most water-based paints. Den Braven’s range of polyethylene (foam) backing cords – with diameters from 6mm to 30mm – can be used with Hybriflex-540 as a bond breaker in concrete joints. A bond breaker creates the correct joint dimensions for the sealant to be applied,
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