Tag: property market

Property owners in West Coast towns have experienced steady increases in value over the past 10 years, says Samantha Nel, a Western Cape area manager for Pam Golding Properties.

“From St Helena Bay and Brittania Bay on the northern shores to Yzerfontein in the south and inland towns like Darling and Vredenburg, property prices have more than doubled in many instances,” she says.

Over the past 20 years or so, the West Coast has developed from a quiet, out-of-the-way, coastal holiday destination to a thriving region with modern shopping malls, medical facilities, and excellent schools within easy reach in Vredenburg and Vredendal. St Helena Bay in the north is just 160 km from Cape Town and Yzerfontein is only an hour’s drive from the Cape Town metropolis.

Overall, residents tend to be mature – 50 to 64 years, and middle-aged – 36 to 49 years, although the latest Lightstone statistics show that the area also attracts younger buyers. And, once they have experienced the appealing West Coast lifestyle, most homeowners opt to stay, with around 50% owning their homes for 10 or more years.

Positively for the West Coast region, the Freeport Saldanha Industrial Development Zone has an anticipated R21 billion investment pipeline which includes an agreement between Sasol and ArcelorMittal SA to produce sustainable fuels and chemicals as well as green steel development, through supporting the establishment of a green hydrogen (GH2) hub in Saldanha Bay. Notably, the planned upgraded port and associated industries have resulted in an influx of younger work seekers to the region.

Says Nel: “While Saldanha sales activity rebounded after Covid, freehold sales recorded in 2021 and 2022 remain below sales numbers posted before the pandemic. In contrast, vacant plot sales registered the highest sales during the past 10 years in 2022 and plot sales so far in 2023 already match total sales in 2021.”

In St Helena Bay, median freehold sales prices increased by 153% from 2013. Prices accelerated in 2021 and 2022 but have slowed in 2023. However, the median sales price of vacant plots has risen steadily through the past decade.

“The number of freehold properties sold in this area increased noticeably in 2021 – and sales have remained elevated since then. Sales in 2021, 2022 and those already recorded this year are the highest seen during the past decade,” says Nel.

In Britannia Bay, the median price increased by around 110% over the past 10 years. Just 28% of homeowners have owned their properties for 11 or more years, while 40% have owned for less than five years. This suggests a large influx of new owners in the wake of the pandemic, says Nel.

In Darling, the median sales price for freehold homes has risen strongly in 2023 – up from R1.275 million in 2022 to R1.69 million. A massive 76% of homeowners here have owned their properties for 11 or more years.

In Langebaan, freehold prices have increased by around 86% over the past decade – and the median sales price of vacant plots by more than 200%. The median sales price of sectional title properties was hit during the pandemic but has since rebounded strongly – with sales in 2022 the highest on record during the past decade.

“Strong growth in house prices and robust sales activity in 2021 and beyond suggest that Langebaan has benefitted from lifestyle changes and ongoing semigration post-Covid,” says Nel.

In Paternoster, the median sales price of sectional title homes – with single-digit sales recorded each year – have exceeded freehold median sales prices every year over the past decade.

Says Nel: “Sales activity surged after the first year of the pandemic and remained elevated in 2022. There has also been a marked increase in vacant plot sales in 2021 and 2022. The town’s housing market has clearly benefited from lifestyle changes in the post-Covid years.”

In Velddrif freehold home and vacant plot sales surged after the pandemic and remain elevated relative to pre-Covid levels.
In Vredenburg, the majority of recent buyers are younger – with 40% middle-aged and another 30% young adults. Freehold home sales have remained largely unchanged compared to pre-pandemic levels. In contrast, vacant plot sales rose strongly in 2021 and then almost doubled in 2022, with prices increasing by around 60% from 2013.

In Yzerfontein, median sales prices have mostly risen steadily over the past decade, with strong growth in prices so far this year – particularly for sectional title homes.

Sales activity rebounded after Covid, with freehold sales in 2021 and 2022 the highest recorded during the past decade.
Concludes Nel: “Overall strong growth in property prices and robust sales activity show that the West Coast is an extremely desirable location to put down roots.”

Original Article: https://www.myproperty.co.za/news/market-and-opinion/why-homebuyers-are-flocking-to-the-west-coast-23-11-23

In a world where high-net-worth individuals seek not only luxury but also strategic investment opportunities, these buyers are embracing a new trend – the acquisition of homes on multiple continents to diversify their property assets across the globe in an effort to offset volatility in traditionally stable markets.

According to the latest Lightstone report, foreign appetite for South African residential property is on the increase with investor numbers steadily rising since 2019, and, whilst Gauteng boasts the highest number of foreign buyers, the Western Cape enjoys the lion’s share of big-ticket sales.

And this accelerating trend, which has seen 64% of luxury foreign sales this year being in the Western Cape, is corroborated by Cape Town property professionals, especially in the most sought-after areas where there has been a notable spike in sales to foreign investors since the end of the pandemic.

Joanna Thomas, Constantia Area Specialist and Stephan Thomas, Constantiaberg Secure Estate Specialist for Lew Geffen Sotheby’s International Realty, both report a sharp increase in foreign buyer interest with a number of high-ticket sales concluded during the past year.

“There has been a lot more interest from UK and European buyers, mainly HNW and UHNW individuals, and the R20 million plus price band has been very active, with a few of sales exceeding R40m.”

Historically, high-net-worth individuals, particularly those from Europe, favoured investing in luxury properties within their own continent and renowned cities like London, Paris, and Monaco have held a timeless appeal.

However, recent geopolitical uncertainties, economic fluctuations, and shifts in global dynamics have compelled investors to rethink their real estate portfolios.

“Traditionally perceived as a safe haven for real estate investments, Europe has recently faced challenges that have prompted high-end investors to reconsider their options with factors such as economic instability, changing regulatory landscapes, and the impact of events like Brexit contributing to a shift in perception,” says Stephan.

“Multicontinental property portfolios offer a hedge against economic uncertainties in any single region and provide an opportunity to capitalise on the unique advantages and growth potential of different markets.”

According to Joanna, most foreign buyers in previous years were ‘swallows’ who spent the summer in Cape Town to escape the European winter but there has been a notable shift in the past two years.

“In addition to the traditional swallows we are now also seeing an increase in the purchase of second and even third holiday homes which are occupied for much shorter periods of time – and these are often much higher value properties.

“Over and above our individual sales, a coordinated effort between the secure estates and Upper Constantia along with our colleagues on the Atlantic seaboard, recently achieved four sales totalling around R204 million.

“All four of these sales were to HNW foreign buyers who paid in cash with one being a resident in South Africa whilst the other three properties were bought as holiday homes.”

She adds that this is not only indicative of shifting trends but also highlights the importance of appointing an agency with a strong network.

“What intrigues me at the moment,” says Stephan, “is the apparent turnaround in foreign investor sentiment, from overly cautious to a lack of concern regarding the challenges facing South Africa.

“In years gone by, it only took a water shortage or a bit of civil unrest to have international investors running for the hills, but these days, when you ask real, live active buyers what their concerns are, or what their risk aversions are, they have very few.

“The current view, especially of HNW buyers, is that the Cape Town property market remains extremely attractive, relatively cheap by international standards and there is little concern in terms of currency stability, civil unrest, service delivery, or political stability and they are happy to spend up to R25m or even beyond.”

Joanna agrees and says that she has been seeing many more HNW buyers prepared to take what they consider to be a calculated risk.

“We often hear these buyers say that they are investing in a lifestyle and, in a post-pandemic world, are looking to live more in the moment. And, with the traditionally ‘safer’ global investment options not being as stable anymore, Cape Town is therefore considered a top destination for diversifying.”

Original Article: https://www.myproperty.co.za/news/market-and-opinion/the-allure-of-the-western-cape-in-the-rise-of-multi-continental-property-portfolios-31-10-23

In a Sectional Title scheme, it is usually the trustees and managing agents who are seen to be running things on a day-to-day basis and dealing with the maintenance of the common areas and amenities.

However, says Andrew Schaefer, MD of leading property management company Trafalgar, the trustees are in fact only acting on behalf of the body corporate, which is a legal entity made up of all the owners in the scheme and has the fundamental responsibility for ensuring a well-run and financially secure property.

The key responsibilities of the body corporate, which are shared by every owner, are:

• Administration and good governance: “The body corporate is responsible for establishing and enforcing the rules and regulations of the scheme. It must also hold at least one general meeting a year where decisions regarding the complex’s budget, finances, and management are made. The trustees who will execute these decisions are usually elected at this meeting.”
• Maintenance and repairs: Ensuring the upkeep and maintenance of common areas like gardens and walkways and shared amenities such as swimming pools, laundries or gyms is a primary responsibility of the body corporate, even if it is usually delegated to the trustees and managing agent, he says. This includes routine maintenance and necessary repairs, as well as a long-term planning for the maintenance and replacement of major items such as lifts.
• Financial management: “The body corporate, guided by the trustees and managing agent, must manage the finances of the Sectional Title scheme. This task includes collecting levies from individual owners to cover common expenses and paying any amounts owing to the municipality and other creditors for services provided to the common property. It must create and pass an annual budget, keep financial records, arrange an annual audit and ensure that the complex is adequately insured at all times.”
• Dispute resolution: The body corporate is also responsible for resolving any disagreements between owners with regard to issues such as noise, pets, parking, drying washing on balconies, property alterations, or compliance with rules, Schaefer notes. “There are also specific procedures to follow when an owner or group of owners is in dispute with the body corporate itself. If these cannot be resolved internally, they must be referred to the Community Housing Schemes Ombud for mediation or adjudication.”

He also says that once individual owners understand that they are actually a part of the body corporate and not separate from it, it is usually easier for them to accept that each of them, and not just the trustees, has a role to play in keep the complex solvent and in good repair.

“While the trustees and managing agent may handle the budgeting, levy collection, debt collection of arrear levies, payment, and regular maintenance tasks, they cannot plan or do any of this work effectively without the collective support of the owners in the body corporate.”

Schaefer says this support can take many forms, but at the very least should include the prompt payment of any levies due. “If the body corporate is the backbone of the Sectional Title scheme, levies are its lifeblood, essential for financial stability, the maintenance of common areas, municipal services continuity, and the protection of value.

“In addition, owners should make every effort to attend body corporate meetings and participate in the discussions about and votes on budgets, levies, reserve funds, changes to conduct rules, and other issues. In this way, they can help shape the decisions and policies that are going to affect them in anyway. Interested owners should seriously also consider serving as trustees to play a direct role in decision-making on behalf of the body corporate.”

And on this point, he says, all owners need to adhere to the body corporate rules and regulations and ensure that their tenants do, too. “Being a considerate neighbour is also one of the best ways to create a harmonious and peaceful life in a Sectional Title community and a successful scheme.”

Original Article: https://www.myproperty.co.za/news/market-and-opinion/the-body-corporate-is-the-real-backbone-of-sectional-title-06-10-23

Just as buyers need to do their research before taking on homeownership, you should also spend some time contemplating certain aspects before you list your property for sale.

Every person’s reason for selling will be different but you should ask yourself these three questions before placing your home on the market.

Question one – Is it the right time to sell?

There are phases in the property market that will favour buyers, and there are phases that will favour sellers. It all depends on the economic environment and conditions that surround the property market.

While there is generally a market trend throughout the country, there will also be certain areas that buck the trend due to specific, unique circumstances that influence a particular market. Ideally, before listing their property, a homeowner should talk to a real estate professional with extensive working knowledge of their specific market who can analyse current sales inventory and trends.

Question two – Is the price right?

Setting the right asking price is imperative to getting the best possible result out of the home sale. A crucial mistake that many sellers make is overpricing the home to counteract buyer negotiations. The problem with pricing a home above its perceived fair market value is that many buyers won’t even take the time to view it. Buyers would rather look at other properties that they deem to be priced at what they consider a reasonable, market-related price. All overestimated prices will do is make properties that are priced correctly look like a bargain buy.

A home that is priced correctly will appeal to a wider range of buyers and be sold within the shortest possible time. When a buyer is comparing properties that are in a similar area and offer similar features, price becomes the number one factor that will influence their decision-making process.

How does a seller know whether their home is priced correctly? 

An estate agent will be able to provide the seller with a comparative market analysis (CMA), which will give them an accurate indication of what other homes are selling for in their particular area. Factors that are included in a CMA would be the average price per square metre in the area, recent sale prices of similar homes, and comparative prices of other properties that are still on the market. This information will help establish a reasonable price bracket for the property.

Once the agent has the correct price bracket for the home, they will then determine what features or unique qualities could set the property apart from others in the area to give a more accurate gauge of the home’s value.

Question three – What is the exit strategy?

Although it is possible to have an estimated time frame as to how long the property will be on the market, it is impossible to pinpoint the exact day the home will be sold. The seller will need to establish a plan in case it happens quickly.

Before the home is listed it is a good idea for the seller to know where they will go if they are in-between homes. They will need to decide whether they would want to stay in their current property and pay occupation rent, or move to a temporary housing situation with a friend or relative perhaps. A post-sale plan will take some of the anxiety out of selling your home.

Having the answers to these three questions will help to ensure that the process of selling a home is less stressful and a far easier procedure to handle.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/3-questions-you-need-to-ask-before-listing-your-property-29-06-23