|
|
 |
| |
I IIssue: February
2006 I Editor: Berry Everitt I |
|
| |
|
|
|
Your Area Specialist:
Chas Everitt International
sales agents have all the latest market information
regarding local property values at their fingertips
– and are committed to the highest standards of
personal service when it comes to selling your home.
In addition, the Chas Everitt International property
group offers you, the homeowner, the best possible exposure
for your property in both national and international
markets. So if you are thinking of selling your home,
call your nearest Chas Everitt International office
today for the name of your local area specialist - or
visit www.chaseveritt.com
|
|
|
Every month the Property
Signpost Newsletter will be issued to all our
subscribers, filled with real estate information to
help you make an informed decision, whether you are
buying or selling a property.
|
|
|
Contents
1. Welcome By Publisher
2. Foreign buyers: How much we stand to
lose
3. Sectional
title the key to sustainable housing
4. Keep the home fires burning
5. Comfort in court ruling for
borrowers as well as banks
|
1.
Welcome By Publisher
Despite the protestations
of the increasingly harried Energy Minister, concerns
about the state of this country’s electricity grid
– and other elements of its infrastructure – do affect
consumer and business confidence, and consequently
are likely to have an effect on both local and foreign
investment in quite a number of sectors. This includes
real estate, currently one of the country’s best performing
industries.
The rolling blackouts
of the past few weeks, for example, have undoubtedly
made property buyers in SA and abroad think twice
about purchasing in Cape Town – until now regarded
by many as the jewel of the country’s real estate
industry as well as its tourism initiatives. Add to
this the frequent power outages in Johannesburg, the
deteriorating state of secondary roads in many parts
of the country and the obvious problems with maintaining
a clean water supply in an increasing number of towns,
and you have a recipe for skepticism. Which is just
what we don’t need now that the economy is set for
take-off. Hard as it is to define, confidence is a
key element of any economic boom, and particularly
of a thriving real estate market.
What is more, platitudes
and reassurances are not enough to restore wavering
confidence. South Africans and foreign investors alike
will need to see concrete action taken, soon, to deliver
on the recent election promises to restore, maintain
and expand our infrastructure.
| Back
to Top |
|
2.
Foreign
buyers: How much we stand to lose
It is widely accepted that Government’s
mooted clampdown on foreign ownership of local property
will cost the country dearly in lost foreign investment.
But just what the quantum of that
loss could be is illustrated by the results of a recent
survey in the UK by Barclays Bank, which showed that
the number of Britons who own property abroad is set
to at least double – and that South Africa currently
ranks fifth on the list of countries they would like
to invest in.
The survey found that 2,2-million
Britons already own property abroad with another 2,2-million
certain to buy in the future and yet another 16,3-million
seriously considering such a purchase.
In this they will be aided by the
generous tax breaks linked to self-invested pension
plans or SIPPs, in terms of which the UK taxman will
repay British buyers 40 percent of the purchase price
of investment property in income tax refunds. The
scheme comes into effect at the beginning of April.
Spain was by far the most popular
foreign investment destination for these buyers, with
about 30 percent of respondents listing it as their
first choice, followed by the US (15 percent), France
(14 percent), Italy (10 percent) and South Africa
(6 percent).
According to the survey, this country
thus stood to gain some 130 000 British property buyers
in the near future. However, uncertainty over South
Africa’s stance on foreign property ownership
is likely to send a message now to many of them to
take their money elsewhere – at an estimated
cost to the country of more than R90-billion even
if each of them had only bought a property of average
price and never spent another cent in SA.
Can we really afford to dismiss such a sum as being
inconsequential?
| Back
to Top |
|
|
3.
Sectional
title the key to sustainable housing
Building
more shoebox houses on large tracts of land at the edges
of towns and cities will not realise government’s ideal
of sustainable human settlements where residents can
live, work, rest and play. The Department of Housing
should rather spend its budget – or a large part of
it – on creating viable sectional title developments
or redevelopments in inner city suburbs and upgrading
existing infrastructure.
The banks should also use most of the R42-million they
have earmarked for low-income homebuyers to finance
the purchase of sectional title units in existing suburbs
rather than helping to create new “locations”.
They should take note that sectional title living in
flats, townhouses or clusters – whatever these units
are called in other countries – is rapidly gaining popularity
worldwide, and not only because these units tend to
be cheaper than freehold homes.
Many affluent buyers are also choosing sectional title
/ group/ multi-family housing – especially in older
suburbs that are being renewed or brownfields areas
- because it makes better use of land and resources,
involves less maintenance, provides better security
and significantly cuts commuting time and costs.
Such developments, whether in CBDs or older suburbs,
are also conducive to establishing inclusive communities
– one of the goals of the Department of Housing’s sustainable
human settlement plan – as they can incorporate a mixture
of unit types and sizes, as well as shared amenities.
However,
some creative tax relief may be required to really boost
sectional title living in SA. With VAT currently payable
on newly-built homes, every R100 000 spent on a new
flat or townhouse, for example, is only buying R87 720
worth of home. On the other hand, the new transfer duty
dispensation announced in the Budget means that existing
homes costing less than R500 000 attract no tax.
There
is thus likely to be increased demand for existing sectional
title units, and this ties in with the tax incentives
recently announced for inner city redevelopment. However,
new stock also needs to be created in the interests
of affordability, and more tax concessions may be required
to fuel buyer and developer interest.
| Back
to Top |
|
4.
Keep the
home fires burning
|
Homeowners
lucky enough to have an old fireplace lurking behind
furniture in the lounge may well have cause for gratitude
this winter.
With dire predictions of widespread electricity cuts,
chances are good that many a neglected fireplace will
be restored to its former glory to provide heat in
the dark days of winter.
And far from just being a functional convenience,
fireplaces offer great scope to become the focal point
of any room. The trick is to make sure that outdated
fireplaces are upgraded to fit in with more modern
furniture and décor.
Brick
fireplaces can provide charm and elegance in traditional
homes but may look out of place in remodeled and updated
homes. Instead of going the expensive and messy route
of replacing the bricks, they can be revived with
a coat of special brick paint that will withstand
high temperatures.
Another
option is to clad the brick with pre-fabricated mouldings
to match the existing style of the room. Mantelpieces
can also contribute great eye appeal if they fit in
with the prevailing décor.
Meanwhile,
homeowners without existing fireplaces should seriously
consider installing freestanding fireplaces, of which
a wide range is available in the market. Gas fireplaces
have also come a long way and models are available
that will realistically simulate a softly flickering
bed of embers without a fake log in sight.
And
whatever the choice, two facts are incontrovertible:
fireplaces can add warmth, charm and great ambience
to any room; and a well-appointed unit will add value
to your investment.
| Back
to Top |
|
|
5. Comfort
in court ruling for borrowers as well as banks
The recent ruling by the Appeal Court
that banks may indeed sell the property of a borrower
who defaults on his bond repayments is not just good
news for lending institutions, but by implication also
for new borrowers.
The ruling put an end
to months of confusion in the industry, where mortgage
bonds to the value of more than R500-billion are registered
each year, and is seen as a victory for commercial banks
as well as the property market as a whole.
Serious concerns had
been raised that banks would severely curtail credit
to homebuyers if the properties they were buying could
not be regarded as adequate security for their home
loans.
This, in turn, would
have meant that many prospective buyers would have been
unable to raise the required collateral to qualify for
home loans, effectively keeping them out of the market.
And that would have meant a sharp decline in demand
that would have impacted on property values across the
board.
The test case before
the Appeal Court followed a previous ruling that selling
a home in execution to recoup outstanding repayments
is unconstitutional because it violates the owner’s
right to adequate housing. But the initial ruling specifically
applied to people living in RDP houses who were in danger
of losing their homes because of very small outstanding
debts.
The Appeal Court judges
ruled that “adequate housing” does not mean “all housing”
and pointed out that luxury homes or holiday mansions
can hardly be compared to a modest RDP home.
The ruling restores
commercial banks’ rights to safeguard any investment
in the property market, reminds borrowers of their obligations
to honour valid contracts they conclude with lending
institutions when applying for home loans, and, at the
same time, protects the poorest of the poor from being
turned out of their homes because of paltry debts.
|
|
|
|
