OCTOBER 2012 #83
www.sapropertymonthly.co.uk
MONTHLY
South African property and lifestyle for international investors
THE FASTEST SELLING BEACH FRONT DEVELOPMENT IN MAURITIUS R4.5 MILLION
Do you want to BUY, SELL, RENT or LET property in South Africa? Visit www.seeff.com and view more than 33 000 properties in all areas and all price ranges and see what services we offer.
NEWS/TRENDS >>
BAROMETER
Banks hike home loan deposits Gap between new and secondhand homes widen by STAFF REPORTER The gap between new buildings and those that have already been lived in for some time has widened drastically in South Africa since 2009. This is according to Bill Rawson, Chairman of the Rawson Property Group, who says this is all the more remarkable because builders and developers have ‘bent over backwards’ in the last few years to reduce their price rises and in many cases have done so very efficiently. He says FNB’s Barometer for some of the less affluent areas in Cape Town shows that in 2009, the gap between new buildings and those that had already been lived in was only 3%, and nationally the figure was only 2%. However, he explains when the economic crunch hit in 2010, the gap rose rapidly to 23% for the less affluent Cape areas and 22% nationally - today, the gap stands at 26% for Cape Town and 25% nationally. These figures, says Rawson, lend credibility to the statements often made by estate agents that secondhand home prices in South Africa are at levels which are significantly lower than those of the peak periods in the
2
past, but these are unlikely to remain at these low levels for much longer. “Already we are seeing a 1.1% real growth in middle bracket housing, i.e. a rise of 6% in nominal terms - when inflation is allowed for, and a recent Lightstone analysis has indicated that these rises are likely to continue. “Another FNB report has shown that nationally, average house prices are now well above R800 000 and are very close to early 2008 levels.” In the more affluent areas such as Bryanston, Constantia and Kloof, he says, Rawson Properties franchisees are beginning to report that demand for property is on the increase and prices are starting to move up at last. Particularly encouraging are the figures from the FNB Barometer, says Rawson, which also show that in the less affluent Western Cape areas, the number of buyers in the 26 to 35 year old age group is rising and almost 35% of these are now first time home buyers. Traditionally, home owners in the Western Cape’s poorer areas have been 40 to 55 years old, says Rawson, and this increase in young buyers,
therefore, augers very well for the future. Asked if the gap between old and new homes did not make new developments more difficult to launch and sell, Rawson says,“speaking as Chairman of Rawson Developers and Homebuilders, which has four Rondebosch developments, all either sold out or selling well and has work in the pipeline for the next three years, I can say that new developments are still sought after if they are in the areas in which people have always wanted to live and if their units are small and compact and therefore more affordable. “This of course means that today’s developments are very definitely slanted towards sectional title, but a number of surveys have shown that young people and retirees increasingly enjoy and appreciate this type of communal living, especially if it is accompanied by facilities such as outdoor entertainment areas, swimming pools and gyms.” The trend towards including these in such developments is, therefore, likely to increase, he says. - Property24.com
www.sapropertymonthly.co.uk
by STAFF REPORTER The average home price rose at an annualised rate of 6.15% in September to R886, 000 but the average percentage of purchase price required as a deposit in order to obtain a home loan also continued to accelerate. It rose to 19.3%, compared to 17.4% in August and 16.5% in July, according to the latest statistics released by BetterBond, SA’s biggest mortgage originator. “So in spite of lower interest rates and rising levels of affordability, the average home buyer must once again have almost one fifth of the home purchase price available in cash before applying for a home loan, in addition to the funds required to cover transfer duty, bond registration and legal costs,” says Rudi Botha, CEO of BetterBond. “This is similar to the situation during the recession of 2008/09 and, given the mounting pressures on the lending institutions to lower their risk, we do not anticipate that this trend of increasing deposit requirements will change for some time, meaning that those who are currently on the fence about buying property should do so without further delay.” First-time buyers, he says, are still likely to find it somewhat easier to take this step, with the average firsttime buyer home price now at R648 000 and the average percentage of purchase price required as a deposit at just 12% - even though this has also increased, from 11.6% in August and just 9% in July. However, the BetterBond statistics – which represent
a quarter of all residential mortgage bonds being registered in the Deeds Office and include applications to, and bond grants from, all the major lending banks in SA – also reveal a sharp drop in the percentage of loans being granted for 100% of the purchase price. This dropped to 29% in September (from 35% in August, 39% in July, and 41% in June) and could signal a slowdown in first-time buying over the next few months. Indeed, the percentage of bonds granted in the R500, 000 to R1 million bracket that is traditionally the preserve of first-time buyers has already dropped to 35% from 38% a year ago. For now though, says Botha, housing demand continues to rise – “perhaps because more consumers in the upper price brackets are realising that if they don’t buy soon, while prices are still at relatively low levels, the increasing deposit requirements and other costs of home acquisition could drive them out of the market”. The BetterBond statistics show an increase of 11% month-on-month in the total number of home loan applications made during September – with a surge in demand for bonds of more than R1.5 million, even though the average deposit required in such cases is well above 20%. “Some 29% of the bonds granted in September were for homes priced at more than R1.5 million, compared to 25% a year ago, which resonates with a number of reports recently about an increase in sales activity at the upper end of the market.” - Property24.com
OCTOBER 2012
• • • • • • •
DURBANVILLE
R5 500 000
MAURITIUS
THE PERFECT ADDRESS FOR THE DISCERNING FEW Bedrooms 4 Bathrooms 3 Garages 3 WEB 275293 This home is set in a secure boutique estate. Large entertainment rooms flow to manicured garden with pool. Lovely views. [O] +27 21 975 5290 LIEZL VAN DEN BERG +27 82 851 0658 durbanville@seeff.com
THESEN ISLANDS
R7 500 000
NORTH-FACING FAMILy HOME
BEACHFRONT LUxURy RESIDENCES - CONSTRUCTION COMPLETING OCTOBER 2
Bedrooms 5 Bathrooms 4 Garages 2 WEB 270115 Bedrooms 3 to 4 Bathrooms 3 to 4 Parking Underground. 15% Tax rate in Mauritius and member of SADC Voted 4th safest investment hotspot worldwide. Exquisite ocean front lifestyle village with 5* boutique hot Well-positioned North-facing family home, situated on a corner stand. Lovely views from 3 5% Bank guaranteed investment return for 3 years. 75% Pre-approved bond including a deco pa bedrooms and living areas, heated swimming pool and self-contained flatlet. [O] +27 44 382 5919 View the project on www.azuri.mu or call MARIE-FRANCO WENDy EVANS +27 83 461 9312 | SUE ABERNETHy +27 82 573 3353 knysna@seeff.com
KNYSNA
R1 800 000
PLETTENBERG BAY
R6 160 000
VIEWS, VIEWS
SPECTACULAR LAGOON, OCEAN AND MOUNTAIN VIEWS
Bedrooms 3 Bathrooms 2 WEB 243377 Log home of distinction with quality finishes in lush area of Welbedacht and overlooking the beautiful Knysna Lagoon. [O] +27 44 382 5919 LIVIANA AUDIBERT +27 82 500 2259 knysna@seeff.com
Bedrooms 8 Bathrooms 7 Garage 1 WEB 204152 Spacious family home or perfect B+B. Lovely en-suite units, as well as a two-bedroom family unit. Every unit has a private patio. Beautiful views from pool deck. [O] +27 44 533 0311 CONNIE PEET +27 83 353 5971 plett@seeff.com
FROM R4 500 000
KENTON-ON-SEA
R11 900 000
STyLISH & SOPHISTICATED Bedrooms 5 Bathrooms 5 Garages 3 WEB 266451 Sumptuous home + 2 bedroomed cottage on the Bushmans river. Open-plan living with large patio and rim-flow infinity pool. [O] +27 46 648 1037 CECILy MASSART +27 82 600 5429 kenton-on-sea@seeff.com
MAROELADAL
R15 000 000
2013. FASTEST SELLING DEVELOPMENT IN MAURITIUS. AUTOMATIC RESIDENCy.
EPITOME OF OPULANCE AND STyLE
C. Automatic Mauritian Residency. Investment guidance for personal, corporate or trust holding ownership. tel, elite international school, marine facilities with boat mooring, spa, shops, restaurants and golf access. ack. Direct flight from 3 RSA cities. Over 40% sold to South Africans. Completion October 2013. OISE DALAIS +230 4983076 seeff.mfrancoise@intnet.mu
Bedrooms 4 Bathroom 4 Garages 2 WEB 273496 This exquisite 1100m2 property set on 8380m2 of land, will change your life with all it has to offer. This modern home provides living space. [O] +27 11 784 1222 EDDIE GILLMORE +27 72 873 3444 sandton@seeff.com
PLETTENBERG BAY
R2 200 000
SANDHURST ENCLOSURE
R14 600 000 +VAT
SPACIOUS HOME IN WALKING DISTANCE TO THE BEACH
A STATEMENT IN LUxURy LIVING!
Bedrooms 5 Bathrooms 3 Garages 2 WEB 274194 Newly renovated spacious home boarders a greenbelt and is walking distance to Robberg Beach in Plettenberg Bay. [O] +27 44 533 0311 ELIZE GREEN +27 72 119 3710 plett@seeff.com
Bedrooms 5 Bathrooms 5 Garages 4 Cottages 2 WEB 266554 Secure environment. Continental indoor/outdoor living at its best. Impeccably furnished. Quiet, private. 1500m2 landscaped garden, rim-flow pool. [O] +27 11 784 1222 DOUG MCMEEKING +27 82 549 1248 | GARETH ROBERTSON +27 79 318 6733 sandton@seeff.com
NEWS/TRENDS >>
Graaff Reinet homes for country buyers by STAFF REPORTER While many country towns are in decline as residents relocate to bigger centres for economic reasons, the Karoo town of Graaff Reinet is bucking this trend. This is according to Seeff Country managing director, Ian Badenhorst, who says business is growing as is the town’s resident population as retirees and those looking for a quiet country environment increasingly relocate here. Sales volumes in the town have grown steadily yearon-year since the economic slump, to about 82 property sales last year. This year, 60 units have already sold amidst rising demand from out of town buyers and for agricultural properties. In 2007, the average house price was just R349 000 while today it is around R655 000, but homes are selling for up to R1.45 million, he says. Located about 2.5 hours drive from Port Elizabeth, this regional capital of the Karoo lies on the banks of the Sunday’s River and is surrounded by the beautiful Camdeboo National Park. It serves a large agricultural community known for its production of fine mohair, stud cattle and sheep. It has good infrastructure with superb schools, medical and religious conveniences, sporting and recreational facilities and a strong sense of community. Many high calibre leaders and business men such as GT Ferreira, Dr Anton Rupert, Beyers Naude, Robert Sobukwe, JLB Smith and more hail from this town. As the fourth oldest town in the country, it boasts a wonderful selection of heritage
6
Slowing house price growth trend
Graaff Reinet has a wonderful selection of heritage architecture. Photos by Michael Clarke (top) and Tjeerd Wiersma (above). architecture that ranges from Cape Dutch to Victorian and Georgian, say agents Andrew and Lynette McNaughton. Aside from more than 220 heritage sites, the town still has a selection of heritage homes such as a renovated three bedroom Karoo cottage with original yellow wood finishes, a flatlet and swimming pool for just under R1 million. While tourism, business and retail facilities, such as Spar which is building a second outlet, are growing, there is a strong focus on preserving the architectural heritage. For example, Shoprite has just opened a new enlarged shop, but the building design has retained the old Cleghorn and Harris facade in Caledon Street. In addition to an increase in older buyers looking for retirement homes, the agents say artists, writers and even
IT professionals looking to escape to a quiet town, but with modern facilities are now relocating there. The nearby villages of Nieu Bethesda and especially Aberdeen are also popular choices. Despite the growth, property prices remain affordable. Houses are currently selling between R600 000 and R1.5 million, although there have been a few sales of up to R2.5 million, say the agents. Of the 25 properties sold by Seeff in the town in just over a year, close to 40 percent were to out of town buyers, including homes that recently sold for R1.2 million and R1.45 million. There is also interest in agricultural properties with farms selling for between R3 802 per ha (R18.4 million for 4839ha) and R3994 per ha (R16.55 million for 4 143ha recently sold). - Property24.com
www.sapropertymonthly.co.uk
by STAFF REPORTER The latest statistics from ooba, South Africa’s biggest bond originator, show a marginal year-on-year house price growth of 0.7% to R836, 055 in August 2012 and a month-onmonth decline of 1.3% from R846, 863 in July 2012. “The slowing in house price growth over the past five months seems to be a trend influenced by current economic fundamentals,” says Saul Geffen, CEO of ooba. “However, ooba’s market experience is somewhat conflicting as both application intake and approved loans are significantly up on the prior year.” Despite the slowing growth in average house prices, ooba is still reporting a 28% yearon-year increase in the value of home loan applications and a 44% year-on-year increase in the value of its home loan approvals in August 2012 indicating that the property market is still very active. One cannot dismiss the effect of the changing mix of home loan applicants on average home prices, Geffen says. “For example, the percentage of first-time home buyers is at record levels of around 53%, and this changed applicant mix is continuing to favour the purchase of smaller more affordable properties, which may be influencing the overall house price trend downwards. This is demonstrated in the higher
median house price growth recorded, which has averaged close to 6% over the past three months.” The average purchase price for first-time buyers increased 6.6% year-on-year from R619, 139 in August 2011 to R659, 885 in August this year, and 0.4% month-on-month, up from R657, 069 in July. Credit conditions remain favourable for buyers. The average home loan deposit is down 47.2% from last year to R95, 396, which is 11.4% of the purchase price. This is the lowest average deposit recorded since June 2008, says Geffen. However, he cautions buyers that deposit requirements are likely to increase. “The banks’ appetite for 100% home loans is diminishing.” A further indicator of favourable credit conditions is ooba’s effective approval rate, which has grown to 65.4% of applications, up from 64.4% last year. Although the initial decline ratio increased 0.5% to 46.6%, the percentage of applications that are declined by one bank but approved by another improved by 3.1% to 25.8% in August this year. ooba’s trailing approval rate, which takes into account loans approved after month-end is 69.3%, meaning that roughly seven out of every ten home loan applications originated through ooba are currently being approved. - Property24.com
OCTOBER 2012
<< LIFESTYLE
<< ASK THE EXPERT
Getting on the property ladder
Flooring that meets your needs by ANTONELLA DESI Floors need to set the mood and tone of a room while at the same time offering durability and easy maintenance. With hundreds of flooring options to choose from it can be overwhelming for first time homeowners to select the right flooring for their new home. Whether you’re after convenience or style, it is important to pick the right flooring options to suit your lifestyle to ensure you receive the most from your floors. For the perfect combination of beauty and durability, consider the following when shopping for flooring for your new home. • Functionality: The function of a room influences the flooring required. For example, wooden flooring works beautifully in the living room, bedrooms and dining rooms – it is warm and comfortable underfoot, long-lasting and offers a gorgeous aesthetic. However, it is certainly not an option for the bathroom, as wooden flooring will warp due to the high moisture content in this space. For wet areas, such as kitchens and bathrooms, vinyl, tiles and screed flooring are better options. • Foot traffic: “Consider whether the room will have a high or low traffic flow and how much wear and tear the new flooring will be exposed to,” says Floors Direct marketing manager, Helen Marshall. For a high traffic area, make sure you choose a durable option that is easy to maintain. “Rooms that experience high footfall, such as the entrance area, passage and kitchen require flooring that is resistant to water, stains, scratches and scuff-
OCTOBER 2012
marks – for these areas, nonslip tiles and screed flooring are ideal options,” she says. • Installation: Decide whether you are going to install the floor yourself or whether a supplier will install it, as this will have an impact on the end cost. Request a few samples to take home and view in the area where the flooring will be installed, advises Marshall: “This allows you to view the sample in the correct lighting and to determine whether it matches the rest of the décor.” • Style: Select colours that complement the mood that you would like to create and match your décor style. “For a calming ambience, select lighter more neutral colours. If you would like to create a warm and cosy look, try a dark wood option”, says Marshall. Laminate flooring for example, is available in a wide range of colour options and is an affordable option to replicate the look of real wooden floors. Bamboo is one of the most environmentally friendly flooring options you can choose for your home and it is exceptionally durable, offering beautiful visual appeal to any room it graces. For that premium authentic look, consider solid wood flooring that will provide your home with warm ambiance and years of good service. • Maintenance: Everyone wants to keep their floors looking like new, therefore analysing the cost of care and maintenance is an essential part of the buying process. “In a house where residents lead and active lifestyle or where family and friends are often entertained, avoid flooring
that requires a lot of care and maintenance, such as light carpeting for example,” says Marshall. She says that for these areas, laminate floors are a good option, as they are extremely easy to maintain and dirt can simply be mopped away with a microfibre mop or damp cloth. When opting for solid wood floors, make sure that they require no sanding or sealing once installed, but that they are ready to be installed and walked upon immediately. • Future needs: If you would like to change your decor scheme in the near future or if you know your needs are going to change, opt for flooring that is easier to replace or a more permanent option with a timeless appeal. Laminate flooring for example, is a floating floor system and is therefore not nailed to the subfloor – it is inexpensive and relatively easy to replace. Solid wood flooring is more expensive and hence, considered a long-term investment and a permanent fixture – it also has the benefit of offering a timeless elegance that goes with most décor styles. Tiles are a very functional choice, although they can be cold underfoot, but they can be costly and time-consuming to have them changed, so be sure to choose a classical style in a neutral colour to ensure a long-lasting aesthetic appeal. Carpeting is comfortable and warm underfoot, and a great choice for bedrooms. However, it requires a lot of maintenance and it is not the best choice if you are planning to start a family or considering adopting a pet. - Property24.com
www.sapropertymonthly.co.uk
I
want to get onto the South African property ladder. I have about £40,000 saved up and was hoping to purchase in the Green Point area as an investment opportunity. Is this a good area to invest in and would you recommend the amount I have saved up?
Please visit our website www. seeff.com to view some of the properties we have for sale in this prime area.
I
t is never too late or too early to get onto the property ladder and now is a good a time as any. Green Point is a very popular area as it is trendy and close to the V&A Waterfront. It is walking distance from the beach and the Green Point Stadium. This area has all the conveniences and is favoured as a rental location. Prices start at around £48 000 but the average price is closer to £85 000. Prices are subject to size, location, features and benefits. As with all property investments location is very important. If you wanted to raise a mortgage and increase your investment, banks will offer up to 50% to people living outside of South Africa.
Billy Rautenbach Chief Operating Officer Seeff Atlantic Seaboard, City Bowl, V&A Marina and CBD www.seeff.com
7