Property Barometer - Property Weekly
FNB - South Africa
The point? I am of the belief that South Africa’s ongoing desire to shift a sizeable chunk of commercial, retail and residential activity into “secure enclaves”, while being a perfectly rational response to the existing environment, doesn’t contribute to greater income equality in the country. More likely it does the opposite, as only the “better-resourced” businesses seem able to capture much of the spending power within these confines.
Government’s challenge is to create a general environment, through a variety of infrastructure and service delivery which ultimately reduces the desire for citizens and their businesses to move into such enclosed and secure environment. It needs to be an environment where people with high levels of purchasing power feel free and safe to move around and spend more widely. Crime prevention is arguably the most important, though not the only, challenge.
Therefore, indicators reflecting the shifts in residential and commercial design, and geographical distribution, are key indicators of economic policy success and longer term sustainability. And while the currently high demand for what I term “secure and well managed property enclaves” is high, it would be a decline in demand for such a way of life that would arguably be one of the best indicators of economic policy success, not an increase.
Apply for Durban rate rebate or lose out
IolProperty - South Africa
Residents of Durban's affluent suburbs who own properties worth more than R1 million will have to apply for a rate rebate on their properties or risk paying more. Ward councillors for Umhlanga, Durban North and Hillcrest said residents would not be happy with the municipal policy as it was likely to be an "administrative burden".
Already carrying a hefty tax burden, these homeowners would lose out if they were not able to successfully submit their applications. The councillors said the system would have to work properly and be available at Sizakala customer service centres and online if the city wanted residents to apply.
According to the eThekwini Municipality's medium-term revenue and expenditure framework document for 2015/16 to 2017/18, all residential properties valued up to R185 000 are exempt from rates. For all other properties, valued above R185 000, no rates are charged for the first R120 000. For a property valued at R1 million, rates are paid on R880 000, with a rebate of R120 000. The rebate has previously been calculated automatically by the city, but this has recently changed and the new policy is likely to come into effect in the next financial year.
Unearthing trends within the super luxury property market
Lightstone - South Africa
If you’ve been following property media reports lately, you will have noticed that the spotlight has been put on the super luxury property market – which has experienced interesting growth over the past few years. In this newsletter, we delve into buyer trends for properties exceeding R10 million in value, and go a little further to explore these super luxury property preferences within the various age bands.
When looking at super luxury property sales over a ten year period (2005-2015) the Western Cape has seen the highest number of sales, with Gauteng in second place, followed by KwaZulu Natal and then Mpumalanga.
Nationally, properties exceeding R10 million in value are predominantly purchased by those within the 45-54 year old age band, possibly owing to the fact that they are a lot more established and financially able to afford properties of that value. Those within the 35-44 year old age band are the second largest group purchasing super luxury properties. An interesting thing we noticed from our data is that the number of buyers under 35 years of age who are purchasing properties over R10 million has slowly increased over the years.
Ill timed repo rate increase
Pam Golding- South Africa
With inflation within the target range and a sluggish economy struggling to regain impetus while the country experiences the worst drought in decades, the Monetary Policy Committee’s decision to further increase the repo rate by another 25bps was ill-timed, as a stable rate would have helped boost business and consumer confidence at a time when it is needed most, says Dr Andrew Golding, CE of the Pam Golding Property group.
“A stable repo rate would have sent a positive signal to South Africa’s housing market, which despite ongoing economic headwinds, continues to experience sustained demand which in many key nodes and metros exceeds the supply, resulting in ongoing stock shortages.