Neighbourhood 8 DECEMBER 2019
PROPERTY & LIFESTYLE
Buying abroad Whether moving to another country or simply diversifying your portfolio, acquiring property overseas can be daunting, page 2
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LACEWORKS, NOTTINGHAM
LISBON, PORTUGAL
Here’s looking at Plan B
More and more South Africans are leaving the country in search of greener pastures. We assess their options.
WORDS: DEBBIE HATHWAY
MAURITIUS
IMAGES: SUPPLIED & SHUTTERSTOCK
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housands of people are applying to residence and citizenship-by-investment programmes annually, and demand for second citizenship is accelerating.
Foreign shores Pam Golding International is experiencing heightened demand for international property, fuelled by investor desire to diversify investment portfolios with a rand hedge. “The need to diversify, coupled with demand for offshore citizenship, has seen increased uptake by buyers investing in residential property in Portugal, via the Golden Visa programme, as well as a surge in interest in the US EB-5 programme for access to a Green Card, and the Grenada citizenshipby-investment programme,” says Pam Golding Property Group CEO Andrew Golding. “Notwithstanding, property in Mauritius and the UK remain firm favourites with South African investors.”
GRENADA
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In Portugal, buyers invest mainly for EU residency, with the
€350,000 (± R5,7m) Golden Visa developments in Lisbon, Porto and Cascais being the most popular. Golding says in Mauritius they’re motivated by a combination of residency and leisure or second home acquisitions, whereas in the UK it’s about investment in hard currency, a hedge against political instability and diversification. Portugal and the UK offer South Africans affordable investment opportunities with good returns, says Lisa Bathurst, international property specialist and founder of Hurst & Wills. Relatively low cost of living and a non-habitual tax regime with tax incentives are Portugal’s drawcards. “It also has more affordable Golden Visa options available from €280,000 (±R4,5m) for property bought in low-density, rehabilitation areas,” she says. “The vibrant walled city of Evora, two hours from Lisbon, falls into this category.” In the €500,000 (±R8m) Golden Visa category, Bathurst recommends looking at properties in prime
areas that offer genuine guaranteed returns. “Do thorough due diligence when purchasing any property overseas, especially one that claims a guaranteed rent,” she advises. “It’s safer to use independent experts to make sure you get a property that suits your wealth strategy and citizenship goals. We have residential and resort-style investments on offer in Lisbon, with guarantees of up to 4%, owner usage, and fully managed and furnished options, starting from €265,000 (±R4,3m).”
Golden Visa Pam Golding International is about to launch its first apartment development in Porto, Portugal, which qualifies for the €350,000 Golden Visa investment. “It should be very attractive to South Africans wishing to enter the programme but who don’t want to spend as much as €500,000,” says Pam Golding International MD Chris Immelman. “Up to now the €350,000 options were only available in private equity
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funds, where you would purchase shares in a hotel development. Santa Catarina Place affords investors full ownership of an apartment in the heart of downtown Porto.” It’s not surprising that Lisbon is on investors’ radar. The 2019 Emerging Trends in Europe report rates it as the top city in Europe for overall investment and development prospects, having leapfrogged 10 places to number one. Meanwhile, in the UK the political uncertainty around Brexit that has weighed down the market may soon be resolved. And for many Londoners who have put their lives on hold for the past three years, the finale can’t come quick enough. “Property transactions have fallen by about one-fifth in the London market since the vote, with buyers and sellers reluctant to commit until the postBrexit landscape becomes clearer,” says Mike Smuts, MD of London property specialists Smuts & Taylor. “And yet the average asking price has climbed by 2.4% in October to £618,432 (±R11,8m) according to the latest Rightmove asking price index. This meek recovery is being driven by ultra-low mortgage rates, a robust employment market and a general lack of supply, with about 30% fewer properties coming to market than at the same time last year.”
Increased activity Smuts explains that increased activity
from international buyers, particularly in London’s Prime and Ultra-Prime neighbourhoods, is another reason for the rise in the overall asking price. “Any political uncertainty has been offset by a sharp fall in sterling and, with vendors being more open to offers, this has created a favourable investment opportunity for foreign buyers who continue to view central London as a safe haven for their wealth. This is mainly due to the inherent long-term political and economic stability of the UK, its robust legal system and transparent tax regime.” Even though the UK does not offer a residency programme, Bathurst agrees that it’s one of the best property investment destinations. “Our clients have also had a lot of success with student accommodation in the UK. This is one of the most resilient asset classes and has outperformed most of the property types, even during the 2008 recession,” she says. “A case in point is Laceworks in Nottingham. It’s sold out and now fully constructed, on time, with 100% occupancy. Our clients are already receiving their guaranteed returns as promised.” Financial services company Sable International has offices in the UK, SA and Australia and facilitates citizenship and immigration applications, among others. “South Africans are very comfortable going where people can speak English,” says group commercial director Andrew Rissik. “And culturally, places like the US, the UK and Australia work well. It comes down to our schooling system, the way we do business, the legal system, everything.”
PROPERTY NEWS
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Take the plunge With #Tax2020 looming, Rissik advises clients to make up their minds about where they want to live and pay tax. “Currently, if you spend more than 183 days out of SA, you don’t need to pay tax here. Those at risk are people whose families live here and whose kids are being educated here,” he says. “They may spend six months or more out of the country, whatever the minimum requirements are in that tax year, but Sars sees them returning home, so they are deemed to be taxresident here. From 1 March next year, the first R1m they earn will be exempt but after that they’ll pay tax.” According to Investec.com, impending changes can only be mitigated by way of cessation of South African tax residency and not through formal financial emigration i.e. emigration for exchange control purposes. Where tax residency is based on the concepts of either being “ordinarily resident” or “physically present” in SA, unless a tax treaty determines otherwise, exchange control residency is based on the concepts of “domicile”, “citizenship” or “permanent residence” status in SA. Where a person financially emigrates from SA for exchange control purposes and obtains the right to reside in another jurisdiction, it doesn’t necessarily mean that tax residency has ceased as well.” Rissik says there’s been a lot of scaremongering and bad advice in the market in this regard. “Get professional advice on your particular circumstances and plan around that when it comes to #Tax2020.”
GRENADA
ISLAND IN THE SUN If your heart’s desire is to gear down to island style, Mauritius ticks the right boxes. Live – and work, if you must – with an idyllic retirement in mind. Mauritius has jumped seven places to rank 13th out of 190 countries in The World Bank’s 2020 Ease of Doing Business Report, reaffirming its leading position in Africa. You can buy prime property from $160,000 (±R2,3m) or secure permanent residency for you and your immediate family with an investment of $500,000 (±R7,3m) or more. The island offers a safe, secure living environment that attracts a rapidly growing expat and business community. Capital growth has averaged 7% per annum for the past four years. There’s no inheritance tax or capital gains tax. Mauritius is less than a four-hour flight from Joburg.
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PROPERTY NEWS
8 DECEMBER 2019
Neighbourhood
Voetstoots: Know what it covers Do you have a leg to stand on if you d iscover defects when you buy a property? Yes and maybe… WORDS: ANNE SCHAUFFER
IMAGES: SHUTTERSTOCK
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iscovering defects in a property you’ve bought, could be covered by the voetstoots clause in your sale agreement. But that clause is often misunderstood by both buyers and sellers, so it’s a smart idea to know precisely what it covers and what it doesn’t.
What is voetstoots?
Attorney, conveyancer and notary public Sarah Araujo of Araujo Attorneys Inc in KwaZulu-Natal, spells it out, “It’s something most of us have heard of, but few understand the true meaning. The voetstoots clause is commonly seen in sale agreements where immoveable property is being sold, and it’s inserted largely to protect the seller.” Araujo says many sellers mistakenly believe this clause will protect them no matter what defects are on the property… and at the other end of the spectrum, some buyers mistakenly believe that in light of the Consumer Protection Act (CPA), the voetstoots clause has no significance. She says if one is buying a property from a developer who sells property “in the ordinary course of business”, then the CPA would apply, and the buyer would be protected against a myriad defects. “But,” she adds, “if the seller is an ordinary residential homeowner – as is often the case – the CPA does not apply, and the seller is afforded some protection by the voetstoots clause.”
Why only some protection?
Araujo clarifies, “The voetstoots clause in the agreement protects the seller, if: • the seller knew about a defect at the time of the sale. • the seller did not disclose the defect or hid the defect from the purchaser. • the seller’s intention was to defraud or mislead the purchaser.
Then the purchaser would be entitled to recourse in light of the latent defect at the property – it could be anything from a leaking roof to an outbuilding not on the plan.” Araujo cautions, “Bear in mind though that fraud is a criminal offence, and therefore all of the elements of the crime need to be proven beyond a reasonable doubt. No small feat. But if successful in proving the existence of a latent defect, the voetstoots clause will not protect the seller and the purchaser will be entitled to either a reduction in the purchase price, or a rescission of the contract.”
Buyer, do your homework
There are a few things which buyers should do to avoid the trauma of contesting defects. The most common one, often discovered down the line, is buildings or alterations which have been done, but didn’t go through the municipal approval’s process and do not appear on the property’s plans. This can be a costly headache, particularly if they “break the rules” in terms of boundaries and so on. And when selling the property, if the next buyer insists on matching the plans to the property, you could be in for a trying and expensive time. In terms of checking the house for defects, don’t be shy. Don’t be afraid to check the pool motor, check for bubbly paint on walls or ceilings which conceals leaks or damp, run the taps – hot and cold – and investigate an overload of Polyfilla which could be concealing bad structural cracks. If in doubt, call in the plumber, the engineer, whichever expert would put your mind at rest – it may be costly now, but it’ll be a great deal more costly and expensive once you’re the owner.
NOW OPEN U P P E R LE V E L NE XT TO WO O L WORTHS.
W W W .LA LU C I A MA LL.C O .Z A
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PROPERTY NEWS
8 DECEMBER 2019
Keep your door open to buyers
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ave you noticed how all the “For Sale” boards in the suburbs seem to disappear the minute schools close for the December break? “It’s because sellers have the impression that buyers don’t go property shopping in the festive season,” says Berry Everitt, CEO, Chas Everitt International property group. “This couldn’t be further from the truth. The summer holidays are busy homebuying times because it’s when those who have been transferred for work or those who want to move closer to a school or those who want to move for any other reason are most likely to have the time off to find a new home.” And it can’t sell if it’s off the market. “If your home has already been advertised and begun to attract the attention of buyers, taking it off the market now would be a serious mistake. You’ll lose any marketing momentum your agent
has built up and have to start from the beginning after the holidays. You may not want to hold actual show days during December, but you should be available for any viewings your agent arranges. Remember, if you do sell now, it’s very unlikely you’ll have to move until well into the new year.” Also, your buyer might not be a “typical family”. Working couples, emptynesters and singles make up a large percentage of homebuyers, says Everitt, and for many of them this is not the time to go away on holiday but a very good time to shop for a new home.
Neighbourhood
Unique co-living and -working development in Cape Town
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he Harri, a 39-unit studio and penthouse apartment development will go up on Harrington Street in the thriving East City Precinct between the CBD and District Six and offers residential living as well as co-working offices. “The East City Precinct and surrounds are undergoing a major revival,” says Jeff Kleu, co-developer with Steven Lampert, both of propertydevelopment company Sepia and Silk. Last year, the Cape Town Central
City Improvement District (CCID) identified the area as having the highest overall occupancy rate (97%) of all four of its city precincts. A R75m hotel opened there earlier this year, following three other commercial and retail developments in 2017. Two further residential mixed-use developments are planned for 2020. “Because of our proximity to a fashionable entertainment and retail scene, as well as how we’ve merged micro-apartment living with
The holiday spirit might actually help you sell. “Many owners work hard to get their homes and gardens spruced up and looking their best for family and other visitors at this time of year, and that not only makes them more appealing but also helps potential buyers picture themselves enjoying holidays and good times with friends and family in this setting.”
Should you stay or should you go?
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ew figures released by Lightstone’s property data analysts show that owners are waiting for close to 10 years before selling. What does this mean, and if you want or need to sell now, what can you do to realise the best return on your investment? Paul Stevens, CEO, Just Property, says investors have become more market savvy and are holding on to their properties to maximise capital growth on their properties. These trends are unsurprising, given that the local property market has been under strain for over a decade. So, is your property increasing in value as time goes by? Is your property creating wealth in the long run? If yes, then it’s a good idea to hold onto that property for as long as you possibly can, Stevens says. However, if your personal circumstances or goals have changed, selling may be the right thing to do.
pristine co-working office spaces to create a co-living environment, The Harri is appealing to many professionals working for established creative, technology and design firms in the area, as well as visitors wanting a different inner-city tourism experience,” says Kleu. The 32 studio apartments vary in size from 24m2 to 49 m2 (furnished or unfurnished), with prices starting from R999,995, including VAT. The Harri’s on-site amenities include WiFi, a concierge, a housekeeping service, a laundry room, 24-hour access-controlled security, innovative storage units, vehicle and bicycle parking, and a restaurant on the ground floor. The co-living and co-working spaces opposite the residential side of the building, include fireplace lounges, TV rooms with large smart TVs and access to Netflix, open-plan kitchenette and dining areas, a rooftop terrace with a gas braai and mini-bar, and slick and contemporary co-working offices. Scheduled for completion in October next year, the development has been pre-approved by bond originator Ooba for 90% home loan finance, and apartments can be secured with a nonrefundable security deposit of R1,000, with seven days to pay the balance.
Then, when is the right time to sell? Stevens recommends keeping an eye on market trends and consulting an area expert as to the growth and current value of your property. One’s personal situation will, of course, also have a bearing. Do you need something bigger? Will holding onto the property cause financial strain? Have you received an offer that’s above the market value of your house? Have you seen a “bargain” property and need to sell your current home to realise the opportunity? These are all good reasons to sell. Finally, sellers have to ensure they’re financially prepared for the possibility that their property does not sell quickly, Steven says. “If you’re in a worst-case scenario and really need a quick sale, ready yourself to negotiate on your asking price. If a property doesn’t sell, it’s usually because it’s overpriced. Today’s purchasers are very well informed.”
Seeff Group scoops big award
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or the second time, Seeff Properties has been awarded first place for “best customer experience” in the Estate Agents Industry in the Ask Afrika Orange Index Awards 2019/2020.
stereotypes, it benchmarks how consumers expect to be treated, based on differing expectations, and provides a navigating light for brands to influence the consumer experience within a changing marketplace.
The index is the largest and most widely-referenced service excellence benchmark in South Africa. The index compares service performance across more than thirty industries and the research is conducted independently.
“In a world where we’ve seen a shift from transaction to service, this is an important achievement,” says Ted Frazer, national marketing manager for the group. “It can be quite a challenge in the real estate sector which is highly competitive with a large number of operators and a fairly homogenous offering. The award highlights that despite technological advances and enabling, the human touch remains vital.”
The index uses the most relevant service benchmarks, providing an overview of each customer touchpoint and a robust sample of participants. Removing all
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HOLIDAY BUYING
8 DECEMBER 2019
Neighbourhood
We Durbs Shopping this silly season
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WE BUILT THIS CITY Fans of the ever-popular and always colourful bricks will be overjoyed to hear that the Legocertified store is now open on the ground level of the Gateway Theatre of Shopping. Shoppers can expect all the signature features these stores are renowned for. Check out the Pick a Brick Wall that allows you to build your own Lego creations by filling a set priced cup with an assortment of Lego bricks and elements; the build-a-minifigure station for personalised Lego minifigures; special build areas to unleash creativity; and an augmented reality screen – simply stand in front of the screen to visualise the contents of the box sets in 3D before purchasing them. To celebrate the essence of Durban, a locally-themed mosaic by the Lego group and 3D model of the Umhlanga Lighthouse using Lego bricks was designed and built for the Gateway store.
SHOPPING MADE SPECIAL La Lucia Mall is leading the way in aesthetically fresh, modern shopping experiences and is your go-to this festive season for everything to celebrate – and survive – the holidays. The upgraded La Lucia Mall is crafted to meet the needs of its unique shoppers and community and give them an exceptional retail experience. Besides the elegant new aesthetic – airy atria, higher shopfronts, classic neutral colour palette, timber ceilings, stateof-the-art bathrooms and low-energy lighting – it also offers new shopping options like the new Cotton On store with all the favourites Cotton On womenswear and menswear, Rubi, Cotton On Body and Cotton On Kids under one roof.
HAPP
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The Zululand Brewing Company has arrived in Umhlanga Village!
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New to Chartwell Drive, Umhlanga, (where Pintxada Restaurant used to be) The Zululand Brewing Company’s tasty menu includes breakfast, steak, wraps, salads, bunny chows, gourmet burgers, tapas, desserts and a kiddies menu. Exclusively at ZBC try Tapanga Gold Rum Mixer and Gin Gin I Love You Mixer from the Zululand Distillery, Zululand Pale Ale and of course our agship beer the Zulu Blonde on tap...
Open Hours: 8am to 10pm (breakfast, lunch and dinner)
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16 Chartwell Drive, Durban, KZN | (031) 350 4407 | bookings@zululandbrewco.co.za
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PROPERTY NEWS
8 DECEMBER 2019
Neighbourhood
Market dictates Zimbali selling prices W Price resistance is showing signs of cracking in the R10m to R20m price bracket in Zimbali
WORDS & IMAGES: SUPPLIED
ith the high end of the residential real estate market typically resisting price reductions, the volumes tend to plummet when faced with a decrease in the demand. This is what Zimbali Coastal Resort – the best example of the high-end residential property market in KZN – has experienced over the past two years, says Andreas Wassenaar, Seeff’s licensee and principal here. “Zimbali has 1,300 homes with over 100 of these in the R30m plus bracket and over 250 being in the R20m to R30m range. Conservatively there would be 500 homes priced in the R10m to R20m range,” he says.
“The price bracket above R20m has seen sharp price reductions over the past 12 months. What was typically priced at R35m has been reduced to R30m and what was priced at R25m is now closer to R20m. “However, the larger price bracket between R10m to R20m has been slower to adjust – until now. In a recent string of price reductions, Seeff Zimbali has reduced pricing on some of its key mandates within this bracket on the instruction of the sellers,” Wassenaar explains.
He says some perfect examples of these reductions include a home that has been
reduced from R16,95m to R13,95m; a home that was reduced from R12,95m to R10,95m and another one that was reduced from R15,95m to R13,95m. “New listings are tending to start their life on the market at more aggressive pricing – understanding where the market is currently at – and therefore aiming to get the pricing right from the outset on the agent’s advice. “The higher-end residential market is characterised by property owners that are rarely under financial pressure to sell and therefore would typically decide to keep pricing unchanged and simply not sell. This can last for an extended time until eventually they realise that to finalise a transaction in any given market, the intersection of demand and supply is where the actual sale happens.” Wassenaar adds that the market eventually disciplines all sellers and regardless of what a seller wants from a property, how much they’ve spent on a property, what they bought it for, or the length of time they’ve held the property for, the prevailing market demand will dictate the price. Prices are at first “sticky” downwards, but eventually adjust to meet demand. This is good news for estate agents who rely on transaction volume to earn commissions.
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