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Showing posts from October, 2011

'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 combine

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 t

'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 followin

'Property trends to watch out for'

'Property trends to watch out for' While the global property market has taken its fair share of knocks over the past few years, it's safe to say the South African market is still emerging and opportunity is out there for property investors that look for it, says Adrian Goslett, CEO of RE/MAX of Southern Africa. "Many buyers and sellers tend to see the market as a separate entity from themselves when in fact the market is made up of buyers and sellers. Simplified, the market can be defined as those people trying to buy at low prices and sell at high prices. Sentiment in the market and how consumers feel about the current market will largely dictate buying patterns and trends in that very environment. The secret to making the most out of the real estate market is to understand people and watch the trends and sentiment to see when buying or selling is the most advantageous," says Goslett. According to Goslett, although technology may have changed and the tools us

'Serious property sellers will have to accept price cuts'

'Serious property sellers will have to accept price cuts' The fact that there are now occasional signs of an eventual recovery in the SA residential market should not lead home sellers to think that higher prices are once again possible, says Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency. "Although at APKF we always try to achieve the highest price for our sellers," said Steward, "they sometimes think we can achieve the impossible - but it is still a buyers' market and those not prepared to price realistically should not put their homes up for sale. Steward drew attention to the latest FNB Property Barometer figures which show that 87% of SA's homes sold in the second quarter of this year were unable to achieve their asking prices - often, she says, because their prices were set by the seller at a level higher than the agents would have recommended. "In real terms," said Steward, "since the price pea

'What is fair market value?'

'What is fair market value?' Those looking to buy or sell property have no doubt heard about the importance of fair market value. But what is fair market value and why is it important? Adrian Goslett, CEO of RE/MAX of Southern Africa says that determining a property's fair market value is a key element of any property transaction and is a vital concept for all property sellers to understand in order for them to price their home correctly. "Fair market value is the price that an educated and willing buyer is prepared to pay for a property. This definition assumes that both the buyer and seller are well-informed and that there is no pressure for the transaction to be concluded. When the parties to a sale are pressurised due to, for example, time pressures to move or financial reasons, then the negotiated price on the home may not reflect its true market value." So how does a seller go about determining what would be fair market value for his property? Before s

Number of black property buyers rises

Number of black property buyers rises Number of black property buyers rises The number of black home buyers entering the residential property market is increasing steadily as the socio-economic tables turn, with the number of black home loan applicants already exceeding those of white applicants. Saul Geffen, chief executive of bond originator ooba, says the number of applications by black buyers represents 45 percent of total home loan applications, and the number of applications submitted by white home buyers represents only 41 percent of the total. Black buyers, however, represent only 39 percent of the number of the total approved home loans, whereas whites represent 47 percent of the t otal number of approved home loans. This ratio has changed considerably since last year, when blacks represented 30 percent and whites 56 percent of approved home loans. For first-time homebuyers, the trend is clearly skewed in favour of black applicants. Currently, first-time homebuyers rep

Gradual recovery for commercial property: Absa

Gradual recovery for commercial property: Absa Absa says things are slowly getting better. (I-Net Bridge) - No more booms in growth are likely to be seen in the property sector, however a gradual recovery is very much on the way according to experts from Absa. Mike Mortimer, head of commercial property, said: "I think we have turned the corner. We're not going to see 2005-2007's exponential growth, quite frankly it's not sustainable, but things are getting better slowly." Bobby Malabie, Chief Executive of Absa Retail and Business Bank, said that although market conditions were difficult to read, there were tentative signs of recovery in selected sectors of the South African commercial property industry. He added that the industry, which encompassed retail, office and industrial property, should benefit from a delayed and more gradual move to higher interest rates than was previously envisaged. However, the property market was still faced with a number of con

Gradual recovery for commercial property: Absa

Gradual recovery for commercial property: Absa Absa says things are slowly getting better. (I-Net Bridge) - No more booms in growth are likely to be seen in the property sector, however a gradual recovery is very much on the way according to experts from Absa. Mike Mortimer, head of commercial property, said: "I think we have turned the corner. We're not going to see 2005-2007's exponential growth, quite frankly it's not sustainable, but things are getting better slowly." Bobby Malabie, Chief Executive of Absa Retail and Business Bank, said that although market conditions were difficult to read, there were tentative signs of recovery in selected sectors of the South African commercial property industry. He added that the industry, which encompassed retail, office and industrial property, should benefit from a delayed and more gradual move to higher interest rates than was previously envisaged. However, the property market was still faced with a number of con

Investors join hands in pursuing Metsi Pepa developers

Investors join hands in pursuing Metsi Pepa developers On Tuesday I played golf in an Investec Golf Day and was paired with some other attorneys in a fourball. One of the attorneys was Johan Botha, who is mentioned in this article. He is the attorney for the developers, although he never mentioned it during the round or at the 19th hole. He was a nice enough gentleman and so I wish him luck in sorting out this mess. -- Gareth Four years down the line stakeholders are demanding their money back. A group of at least 70 investors in the failed North West province Metsi Pepa development have rallied together in taking civil and criminal action against developers Nicola Prinsloo and her husband, Jaco. In an e-mail dated September 23 2011, Nicola Prinsloo informed investors that the development had been sold to Land Affairs, allegedly for 30% less than its monetary value. Her legal counsel, Johan Botha, subsequently offered investors 40c in the rand as compensation. Moneyweb knows of

FNB and Sasol plot housing iPad

FNB and Sasol plot housing iPad Formerly-listed Enviroserv’s subsidiary to build houses but not from bricks and mortar. First National Bank (FNB) believes it has identified an opportunity to lend hundreds of millions of rand via green housing loans in a bid to deal with the shortage of houses in the affordable space, while on the other side giving entrepreneurs an opportunity to benefit from this initiative. According to Marius Marais, FNBs CEO of Housing Finance (a unit of the bank offering home loans to people earning R3 500-R16 000) there is a need of about 600 000 units, based on a survey done in 2007. Marais added that its book in affordable housing space is heading close to R9bn, with loans of about R2bn on an annual basis. Because of the shortages, Marais says there is more room to grow. “Where are these families staying at the moment, they earn that kind of income, they either rent rooms or leave in a backyard room ... We need to find the housing iPad in Africa ... the pi

House price growth to tread water

House price growth to tread water The slowdown in house price growth runs parallel with the weakening SA econ-omy. Standard Bank’s median house price recorded growth of 0.6% y/y in September. Standard Bank’s median house price recorded growth of 0.6% y/y in September. Standard Bank’s median house price (smoothed) posted a growth rate of 0.6% y/y in September, from 1.6% y/y in August. Growth in real terms remains negative. The slowdown in house price growth runs parallel with the weakening SA econ-omy. GDP growth slowed to 1.3% q/q (saar) in Q2:11, from 4.5% q/q (saar) in Q1:11. Household consumption was undermined by receding real income growth and the sluggish SA labour market. Growth in household disposable income slowed to 4.1% q/q (saar) in Q2:11, from 5.4% q/q (saar) in Q1:11. This slowdown was mirrored by real household con-sumption expenditure growth decelerating to 3.8% q/q in Q2:11, from a robust 5.2% q/q (saar) in Q1:11. Data from Statistics South Africa’s Quarterly Emplo

Housing market favours first-time buyers

Housing market favours first-time buyers - report (I-Net Bridge) - Residential home prices fell slightly from last year, but purchase prices for first-time home buyers increased by 6%, according to a new report. The mixed numbers reflected changing demographics and increased demand for small properties. According to bond-originating firm Ooba, the average house price decreased by 2% from September last year, from about R856,000 to R839,000. The average purchase price for first-time buyers increased from R585,000 to R620,000 during the same period. Ooba CEO Saul Geffen attributed increased activity from first-time buyers to the emerging black middle class, combined with low interest rates and decreased deposit requirements. He also said increased municipal and utilities tariffs caused home buyers to choose smaller properties. "The rising costs of home ownership and the changing economic and racial demographics amongst home buyers are influencing demand at the lower to middle e

`Oldies` drive housing supply

`Oldies` drive housing supply Downscaling due to "life stage" is emerging as a major driver in residential property supply at present according to the third quarter FNB Estate Agent Survey. John Loos, property market strategist at FNB Home Loans said that this referred mostly to those households whose children had grown up and left home, as well as to those who were ageing and for whom a large home may no longer be "practical". "When we started questioning agents as to the reasons that people were selling homes, back at the beginning of 2008, they estimated that 14% were doing so in order to downscale due to 'life stage'. Since then, this reason for selling has steadily risen, reaching its highest level yet of 23% in the third quarter of 2011." As the survey was only initiated in 2008, it doesn't provide much insight into whether the growth is cyclical or not. Loos said however that it was conceivable that these households were holding bac

50% of South Africans have bad credit records but they can get bonds

50% of South Africans have bad credit records but they can get bonds Just under 50% of South Africans have poor credit records - but, if they take the right steps, they can still get bond finance. According to the latest records, almost half of all economically active South Africans have some form of "credit challenge" that makes it difficult for them to qualify for home loans or other finance from the banks, says Rob Lawrence, national manager of Rawson Finance. "We are regularly asked by bond applicants to try and sort these matters out. Fortunately, Rawson Finance and the other originators now have arrangements with organisations dedicated to rehabilitating people whose credit records would normally prevent them from borrowing again. "Depending on the severity of the original misdemeanour, the process can take anything from three to 12 months. But the ultimate success rate is high, so it's definitely worth tackling the challenge." He says certain i

Home loans for highly indebted

Home loans for highly indebted Standard Bank is piloting a rent-to-buy housing model in the affordable home segment, an initiative that is likely to help those with impaired records to qualify for home loans in the future. “The model that we are interested in is deferred ownership for a while. It could be 12-18 months of rent but it will be as if they are paying the bond. We are just piloting it right now. We have agreed with one developer to put 100 people on the pilot,” Standard Bank’s Director of Affordable Housing Nicholas Nkosi said. Nkosi said the affordable housing segment covered those who earn between R3 500 and R16 000 and properties of up to R500 000. With the rent-to buy model, a client would have to prove for a good number of months that they could afford to pay rent, rates and all other responsibilities that come with a home loan before the bank approved lending. So the customer would behave as if they are paying a bond although renting. If the customer can demonstra

Johannesburg CBD revival back

Johannesburg CBD revival back The Johannesburg city centre could see seven new rejuvenation projects should Urban Genesis’s negotiations be successful. Such projects felt the backlash of the 2008 meltdown as both government and the private sectors tightened their belts but efforts are now back to refurbish the Johannesburg city centre in the form of City Improvement Districts (CIDs). The approach is a holistic one whereby the private and public sectors come together in joint ventures to rejuvenate demarcated areas in the central business district. CEO of Urban Genesis, Shrivaar Singh, says recent developments have seen retailers like Ackermans and other chain stores returning to the city. What is key is management and the strict enforcement of formal services like cleaning and maintenance, security, marketing and promotions. This is in addition to services provided by the local authority. A tour of the Main Street Mall and the Newtown Improvement District has revealed a stark cont

R85m disposal of the Grace building

R85m disposal of the Grace building Hyprop has concluded a deal to dispose of The Grace building in Rosebank to Southern Sun for R85 million. The transaction encompasses the sale of the entire building including the hotel premises and offices. CEO Pieter Prinsloo says the sale is in line with strategy to divest from non-core assets. "We are pleased to have concluded a speedy transaction, in this instance with Southern Sun which is keen to establish their first hotel in the Rosebank node." Southern Sun is planning to re-open the hotel under their own brand in the first half of 2012. Hyprop's future focus in Rosebank remains the planned extensions to The Mall of Rosebank and increasing its retail footprint in this high-growth node. The Grace transaction remains conditional on Competition Commission approval.

'Property sellers reluctant to drop prices

'Property sellers reluctant to drop prices' The levels at which South African residential property prices are currently standing are debated weekly in the country's media, often with very pessimistic forecasts, but, says Bill Rawson, chairman of Rawson Properties, even now relatively few sellers accept that buyers are in a commanding position and big price adjustments are essential. "From the figures coming across my desk," he says, "it is clear that the majority of sellers still baulk at cutting prices by over 10%. A good agent may be able to persuade them to accept that a bigger cut is essential, but generally they prefer not to sell rather than to take a big cut." The sellers' thinking, says Rawson, appears to be that the bottom of the downturn has now been reached and from now on prices can only move up. "Most of the banks' analysts would not agree with this view – they see price stagnation staying with us for six months or a year b

Joburg has most expensive staff, but admin and delivery problems are ongoing

Joburg has most expensive staff, but admin and delivery problems are ongoing The City of Joburg hires twice as many top managers as any other metro and accounts for two-fifths of all metro spending on top managers in the entire country. The City of Cape Town manages a budget slightly bigger than Joburg's, but needs less than half the managers. Joburg's bill for the top brass is bigger than the same bills combined for the next three biggest metro spenders - eThekwini, Cape Town and Nelson Mandela Bay. The details are in the Treasury's recent Local Government Expenditure and Budgets Review. The spending is for the municipal financial year which ended in June last year. Joburg pays four of its top 40 staff each more than R2 million a year, and another 30 have annual salaries of R1m, excluding bonuses. Joburg's highest paid official is the head of City Power, followed by the chief financial officer, the head of Joburg Water and the city manager. Those top 40 staff w

FNB Sep house price index unchanged

FNB Sep house price index unchanged First National Bank's house price index has recorded 5.6% year-on-year growth (y/y) in September, unchanged from the revised 5.6% in August. This "stalling", said FNB property strategist John Loos, can partly be ascribed to rising base effects, with the bout of month-on-month house price decline around mid-2010 being at its worst around August last year, and thereafter starting to dissipate. However, it is believed that economic factors are also beginning to play a role in constraining house price growth, with the interest rate cutting stimulus of late-2010 wearing thin, and economic growth having slowed in the second quarter 2011 placing pressure on real household disposable income growth. In real terms, adjusting house price growth for consumer price inflation, August saw a very slight +0.3% positive y/y growth rate after nine consecutive months of y/y decline, with y/y house price inflation outstripping consumer price inflation.

Metsi Pepa Developers dodge probe into fraud allegations - Property | Moneyweb

Metsi Pepa Developers dodge probe into fraud allegations An increasing number of investors in the failed Metsi Pepa development near Potchefstroom in the North West province are contemplating criminal and civil charges against developers Nicola and Jaco Prinsloo. This after the couple sold the sprawling farmland earmarked for the development to government, allegedly for R39m, according to documents obtained from a deed search in the Pretoria office. In return, they are offering investors 40c in the rand with a promise of further funds should their planned legal action against what they call “the professional team” be successful. The team comprises, among others, the engineers, architects and town planners that were employed to work on the project and who have been blamed for its failure. According to records in the Deeds Office, the farm consisted of nine demarcated areas, seven of which were sold to the Department of Rural Development for the total sum of R39m. These properties we

Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!