2017 a mixed-bag year for the Southern Suburbs property market
The property market in the Southern Suburbs has performed valiantly in the face of the political and economic uncertainty of 2017, showing solid growth in prices despite the significant drop in sales volumes according to Arnold Maritz, Southern Suburbs co-principal for Lew Geffen Sotheby’s International Realty, who says sales are down by about 20% from the same period last year (January to August), however, the average selling price is up by 4.63% across the board.
He says this is a notable outcome when one considers that Propstats data reveals a remarkable 50.4% (R1 295 365 9590) drop in sales across the Peninsual in April after the March 30 cabinet reshuffle which included the axing of Pravin Gordhan.
Gauteng’s development hotspots for 2018 revealed
In addition to ongoing development across Gauteng, large-scale growth is especially predicted for the northern and north-western suburbs of Johannesburg where platforms such as Airbnb are creating interesting trends in the Sandton property market in particular.
Dave Lewis, Seeff Sandton’s Developments Manager, says in the Sandton CBD and surrounds there is a great drive from both developers and the municipality to increase the number of residential homes.
“The council is very supportive of increased density in the area, especially along main roads, as the demand for housing close to the ever-expanding commercial hub of the Sandton CBD is growing rapidly. While in the past there were maximum density restrictions, these days council is imposing minimum density restrictions,” he says.
“Areas like Bryanston and Morningside are being developed at quite an alarming rate, as the sizes of the stands in the area are good for development and the existing services infrastructure is in place already. Here we are especially seeing a lot of townhouse and apartment developments going up.
What determines property prices in South Africa?
What are the main issues that affect property prices in South Africa?
“The answer is more complex than it would seem at face value,” says Paul Stevens, CEO of Just Property. “There are various factors at play, the most important being market conditions which affect so many elements, including the cost of loans.”
“The repurchase rate, or repo rate, is the interest rate that the South African Reserve Bank applies to the money it lends to banks. The Reserve Bank uses the repo rate to target inflation - as inflation rises, so does the interest rate. This affects the prime lending rate that the banks set, which is applied to bonds,” explains Stevens.
Sellers, ‘voetstoots’ clause not a ‘get out of jail free’ card
The “voetstoots” clause, meaning “with a shove of the foot” - that the buyer takes the property in its present condition as it is, has often been used by sellers as a disclaimer to protect themselves against any claims from the buyer if a fault is found after signing the offer to purchase.
This term, however, is not to be abused as known defects by law need to be disclosed to all parties involved, says Rene Barry, a partner at law firm Henkes Nolte-Joubert.
Whether patent or latent, if the seller knows about them, he or she cannot use the voetstoots clause to protect themselves against repairing them or disclosing them to the buyer, and it is always recommended that buyers ask for a full condition report, as is prescribed by the Estate Agency Affairs Board (EAAB), listing the condition of certain key items on the property in question.
Tips for investing in a profitable coastal home
Much debate surrounds the topic of whether or not a holiday home is a viable investment, especially when you consider the costs involved in maintaining and managing a second property. With any property purchase, the potential for a successful return on investment is largely attributed to the research done beforehand and how the investment is viewed by the buyer.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says a holiday home purchase can be one of the best investments that a buyer can make, provided they have a long-term view on the purchase of such property.
“If the correct decisions are made from the onset, and the necessary property investment principles are adhered to, buying a second property can be a platform on which to build wealth. The investor should see the property as a vehicle to put money aside for their retirement, rather than leaving that money in a bank account,” says Goslett.