'Internet presence key to property sales'

'Internet presence key to property sales'

Research shows that South African internet users passed the five million mark for the first time in 2010, finally breaking through the 10% mark in internet penetration for the country.

As more and more people gain access to internet facilities, online property listings will play an increasingly bigger role in the property sale process, says Grant Gavin, owner of RE/MAX Panache.

Gavin notes that in 2010 and so far during 2011, the busiest viewing times were Mondays between 7am and 10am, with the week tailing off quite rapidly, meaning that Thursdays and Fridays are slow viewing days. "Very little property surfing is done after hours," he notes.

Majority of visitors were South Africans who accounted for around 80% of all pages viewed, with the UK providing the second largest audience with an average of 5% of all pages viewed.

The USA and Germany are always in the top 5 and account for about 4% of monthly page views combined.

Lead generation and the use of integrated technology platforms are two of the 10 trends that will drive the next five years, according to US real estate expert, Steve Murray. Gavin believes that the internet is a key component of the technology platforms that will drive the market and assist in providing agents with buyer and seller leads

"The internet provides an excellent tool for sellers to showcase their property and buyers to search for their ideal home from the comfort of their own home or office. Harnessing the technology and using it effectively will mean the difference between success and failure for many estate agents," he concludes.

* 'Internet Access in South Africa 2010' study by World Wide Worx

RE/MAX Press Release

Commercial property hit by lack of business confidence

Commercial property hit by lack of business confidence

For now, no improvement in the demand for office space is detectable, according to the latest issue of Rode's Report, which is sponsored by FNB.

Erwin Rode, property economist and publisher of the report, says uncertain economic conditions are obviously affecting business confidence and must be making firms think twice about expanding their premises or hiring new staff.

"The result will no doubt be a continued lacklustre demand for office space to rent and so, for now, moderate growth in rentals remains the most likely outcome."

He says growth in office rentals waned in the second quarter of 2011, after starting the year with vigour. On a national basis, office rentals mustered growth of 5 percent year-on-year. This comes after having recorded robust growth of 9 percent in the previous reporting quarter.

As for industrial property, in the second quarter of 2011 strong rental growth of 8 percent was observed in the Cape Peninsula, but this was the exception.

More pedestrian growth rates were notched up in Durban (3 percent), the Central Witwatersrand (2 percent) and Port Elizabeth (1 percent).

Rode says: "Wariness in the manufacturing and retail sectors - the support pillars of industrial property - now raises an amber flag on demand prospects and, consequently, market rentals.

"Lacklustre growth is also evident in buy-to-let residential property. In the second quarter of 2011, house rentals nationally mustered yearly growth of only 1 percent, and townhouse rentals remained at roughly the same levels of a year ago.

" Flat rentals performed best, with growth of only 3 percent. Some pleasant news for investors in the buy-to-let market is that, after peaking at the end of 2009, flat vacancies have since been dropping.

"Having said this, landlords might still feel hard done by, owing to the adverse impact of sharp rises in property taxes. Hikes in electricity tariffs, although normally not a direct cash outflow for residential landlords, are putting pressure on their tenants' household cash flows, and are indirectly affecting tenants' ability to afford rental increases.

"Nevertheless, for now landlords can comfort themselves with the knowledge that interest rates on their mortgage bonds are at record lows, and there is little upward pressure on rates for the time being."

Rode predicts that prospects for capital appreciation in the housing market will remain feeble, in line with the stillovervalued house market and weakness in residential mortgages.

"After peaking in the first half of 2010," says Rode, "the yearly growth in the value of new mortgage loans has turned down sharply, and the value of new loans granted in June 2011 was actually lower than a year ago. Naturally, contractions in mortgage loans granted act as a restraining factor on price movements."

John Loos, FNB property sector strategist says: "For a while we have seen the signs of global and domestic economic slowdown. South Africa's real gross domestic product (GDP) growth slowed significantly in the second quarter from a previous 4.5 percent quarter-onquarter annualised rate to 1.3 percent.

" Looking forward in the near term, weak readings in the Reserve Bank leading business cycle indicator suggest further weakness in economic growth. In addition, no further interest rate stimulus has been forthcoming in 2011.

"The recent global and local economic weakness has the ability to exert pressure on commercial property values in two ways. First, a slow economy could lead to increased vacancy rates. Second, investor flights to 'safe haven' investments has resulted in capital outflows, which have led to recent rand weakness and rising domestic long-bond yields.

"The possible combination of higher vacancy rates and higher bond yields can exert upward pressure on, especially, the income yields of listed property, and to a lesser degree on the capitalisation rates of directly-held property. These developments thus have the potential to undermine commercial property values."

Weekend Argus (Saturday Edition)

'Bleak outlook' for property sales in hard times

'Bleak outlook' for property sales in hard times

Residential properties in South Africa are selling for less and staying on the market longer - and the outlook is expected to remain bleak for at least another two years.

Samuel Seeff, chairman of Seeff properties, said that "on the whole, house prices have dropped 15 to 20 percent and properties are taking four to six months and longer to sell if they are not priced in line with what buyers' expectations".

This is backed by data in FNB's estate agent survey, released last week, which puts the average length of time a house spends on the market at 17 weeks and 1 day - up from 15 weeks and 1 day in the previous quarter.

In addition, FNB says, 91 percent of home sellers are having to drop their asking price, with the average at 13 percent. This was again up from the previous quarter, in which 87 percent of sellers were forced to drop their asking prices by, on average, 11 percent.

Seeff reported the following trends in the province:


•Very few properties in the Southern Suburbs, on the Atlantic Seaboard and in the Waterfront and City Bowl priced above R20 million are selling.


•Rondebosch East and Plumstead are showing the largest sales in the Southern Suburbs because of the value they offer.


•Prices in Camps Bay are down by about 20 percent from their pre-2008 levels. Most properties sold are below the R10m mark, with many below R7m.


•Sellers at the V&A Waterfront are accepting "cheeky" offers up to 20 percent below the asking price on apartments in the R3 to R5 million range.


•In the City Bowl, sellers are accepting offers well below asking price.


•Sectional title apartments and homes are selling well, mostly due to downsizing.


•The Garden Route is mostly a second-home market and these are not selling well, given the economic slump.

Pam Golding properties say there is strong demand for Durbanville properties in the R750 000 to R2m range, and that such properties typically sell in six to eight weeks. Meanwhile, properties on the Cape Flats, particularly in Mitchells Plain, Athlone and Elsies River are popular among first-time home buyers with a two-bedroom starter home in Mitchells Plain generally starting from around R250 000.

Anton de Leeuw, of property investment firm YDL, said: " There is an imbalance between supply and demand. The inherent demand is constrained by many factors including slow economic growth, broader economic issues and wages. Also, the National Credit Act stifled access to funding and the last interest rate cut was in November 2010 so there is no stimulus."

And the experts don't see a change soon.

Property expert Erwin Rode says he is " bearish" about prospects and he believes the market is unlikely to change in the next four years "irrespective of what is happening in the outside world".

He adds that properties are still "hugely overvalued", by up to 15 percent.

"What is happening in Western Europe and North America has the ability to worsen my prediction," Rode said.

De Leeuw said he would be " surprised if the situation picked up markedly in the next two years" while both ABSA and FNB indicate declines in nominal house price growth are likely to continue at least until the end of the year.

Absa's House Price Index report, released this month, points to low real economic growth, continued pressure on employment, consumer price inflation above 5 percent, no interest rate cuts, low levels of consumer confidence and a high number of people with damaged credit records.

According to FNB, most sales were by older home owners downsizing their homes after their children have moved out. This accounts for 23 percent of home salesn

Weekend Argus (Saturday Edition)