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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
 
Please visit our website at www.prop-law.co.za for more details.
 
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
 
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

02 October 2014

Property sales upswing 'best since recession'

Property sales upswing 'best since recession'

South Africa's property market is showing signs of steady growth, with the Western Cape scene looking particularly promising.

The Investment Property Databank South Africa Biannual Indicator, released recently, showed that the South African property sector delivered an improved 7.4 percent total return for the first six months on this year. This is 90 basis points more than the December 2013 biannual total return of 6.5 percent.

Commenting on the recent performance of the Western Cape's retail property sector, the chairman of Seeff Properties, Samuel Seeff, said there was a significantly better mood in the property market this year.

'Momentum started building early last year and activity continues strong monthon-month. In fact, activity in the Cape metro this year is at the best levels since the 2007/8 downturn, not only in the mid-market sector but also at the top end of the market.'

He said sales across the Atlantic Seaboard and City Bowl were up by 35 percent and across the southern suburbs by about 40 percent, Hout Bay by about 100 percent, the False Bay area by more than 20 percent, Somerset West by 40 percent while the Boland, Winelands and Country areas were up by more than 30 percent, year on year.

'All of this clearly indicates the significant upturn in demand and sales activity. Properties are selling twice as fast as two years ago, and for close to and even more than the asking price. On the whole, where market conditions were overwhelmingly in favour of buyers a few years ago, the pendulum has now swung in favour of sellers and we are most decidedly in a sellers' market.'

Seeff said the pending interest rate hikes were unlikely to make a real dent in the demand as they might make buyers think twice and budget a little more carefully.

'We certainly believe that this is the best year for property since pre-2007/8. It is interesting to also note that in 2013, the Cape metro property market performed significantly better than that of Joburg, both in terms of residential sales volumes and value according to Lightstone data.'

Pam Golding Properties said the residential property market in key areas of the Western Cape was again approaching the levels last seen before the spectacular downturn in 2007/8, when it lost 39 percent of its value and dropped 46 percent in unit sales.

The firm said the Western Cape Metropole showed an overall recovery close to the levels before the crash when the market dropped by R6.17 billion and 3 369 units.

Recent figures reflecting the recovery period from after 2008 to the end of last year showed a 53 percent increase of R5.1bn in value and a 36 percent increase of 1 432 more units sold, most in the last 18-month period.

Andrew Golding, the chief executive of the Pam Golding Property group, said the results indicated the extent to which the market had recovered.

'This recovery has been, in our view, the result of a combination of factors including accumulated pent-up demand, a rising stock market with some profit-taking and consequent property investment, increased foreign interest off a very low base and, finally, increased consumer confidence.'

Laurie Wener, the Western Cape managing director of Pam Golding Properties, said the biggest increase in market size had been in the value of the market and, to a lesser extent, in the unit numbers.

She said the reason was that the turnaround in the market had led to a lot of slack and the stock levels had been taken up by buyers.

'What has happened is that the tables have turned and the demand for property now exceeds supply - and that has driven prices up. Had we had more stock, our turnover in units and rand value would have been much higher.'

Golding said the market was characterised by a significant shortage of stock, buyer competition for properties and gradually increasing house-price appreciation - all factors pointing to a traditional up-cycle.

'This recovery really only started to gather real momentum 18 months ago and so, all things being equal, and notwithstanding the seemingly rising interest rate cycle we find ourselves in, we believe the current market conditions are here to stay for the foreseeable future.'

Stan Garrun, the executive director and head of South Africa at Morgan Stanley Capital International, said the modest overall improvement over the first six months of this year was heartening.

'Barring offices, the improvement was widespread over most property fundamentals. Retails dominated, but the industrial market showed the strongest improvement in key aspects,' he said.

Cape Argus

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