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Running contrary to the high rates of urbanisation in most developing countries as poor rural people gravitate towards the cities, one of the biggest global property trends to emerge in recent years has been the relocation of relatively wealthy city dwellers “back to the country”, in search of a less frenetic, more holistic way of life.
To begin with, those in search of the pastoral idyll were often content just to acquire a weekend or holiday bolthole in country or seaside villages not too far from their permanent residences, and in SA many destinations such as Dullstroom, Clarens, Langebaan, Greyton and Arniston continue to be the beneficiaries of such investment and part-time patronage.
Next, worried about the climbing crime rates in bigger centres and the difficulties of raising children there, city-dwellers began to relocate permanently to security estates established on the city margins or, better still, close to smaller towns that promised an “old fashioned lifestyle” for families while their breadwinners continued to commute to their city jobs daily or weekly.
Towns such as Somerset West, George and White River, all of which are close to large airports, and areas such as Mount Edgecombe close to the new international airport in KwaZulu-Natal, have all grown as a result of this increased interest.
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| Estate Holiday Homes Close to the City |
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Holiday home buying trends in South Africa have switched from once-a-year coastal holiday houses to accessible second homes on lifestyle estates that can be used more regularly.
Holiday home buying trends in South Africa have switched from once-a-year coastal holiday houses to accessible second homes that can be used more regularly. With this evolution has come greater demand for second homes within a radius of 300km of South Africa’s major metropolitan areas or of individuals’ primary residence.
With this evolution has come greater demand for second homes within a radius of 300km of South Africa’s major metropolitan areas or of individuals’ primary residence. The result has been “exponential” growth in demand for such holiday homes.
According to Joris Kröner, founder of property marketing agency estata. This runs contrary to recent media articles suggesting the economic climate had resulted in stagnant demand. “There has been a strong trend away from second homes that can only be used once a year, during the Christmas holidays, towards homes that can be used by the family on a weekly or monthly basis, or even shared between families.”
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| Big-Ticket Buyers Go Bargain Hunting in Lifestyle Estates |
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Other than affordability, the main drivers of the real estate market these days are low-maintenance living and higher security, and this continues to fuel the popularity of upmarket golf and lifestyle estates as well as other gated complexes...
In fact, says Lew Geffen, chairman of Sotheby's International Realty in South Africa, buyers in search of luxury homes are currently flocking to estates in the realisation that home prices are in many cases still below 2008 levels – and often well below those for comparable properties in the older, blue-chip suburbs.
"In the iconic Dainfern estate north of Johannesburg, for example, there is a wide choice of homes available now for less than R5m, and almost 120 properties have been sold in the past year, compared with about 100 in the previous 12 months.
In the Silver Lakes estate near Pretoria, it would have been virtually impossible three years ago to have found a home for less than R3m, but we have recently sold several luxury properties there at around the R2,5m mark - and we can see that buyers are avidly seeking out similar 'bargains' in top estates all around the country."
| Sotheby’s International Realty, 21-02-2012 |
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| State Of The Nation Address Comment |
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Unemployment and access to finance have been the two dominant factors that have prevented consumers, especially first-time buyers, from entering the property market and investing in a home in recent years.
While it is understood that the financial institutions had to revise their loan criteria in order to ensure responsible lending practices, this has done little to improve the housing needs of the country.
However, the recent State of the Nation Address by President Zuma contained encouraging news for those affected by the housing backlog and those who are unable to gain access to finance, given government’s renewed commitment to grow the economy and continue to tackle unemployment.
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| Take Advantage in the South African Property Market |
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Despite the South African economic growth challenges, this year is set to present opportunities that property investors can take advantages of.
Marna van der Walt, chief executive officer of JHI Properties, explains that it is increasingly evident that the massive increases in electricity tariffs coupled with increases in fuel, rates and taxes are beginning to affect marginal tenants’ ability to meet monthly financial obligations, which in turn may lead to a rise in insolvencies, liquidations and unemployment. According to van der Walt, the gradual recovery of the economy was slower in 2011 than anticipated yet it had a positive effect on disposable income, which reflected in positive retail growth.
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| Wraps Off Unusual Atlantic Seaboard Property Development |
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The Orchards, a new development in Sea Point, bordering both Fresnaye and Bantry Bay, may well offer the best investment and lifestyle opportunity for people wishing to take advantage of current low property prices in order to gain a foot-hold in this most desirable of locations.
The Orchards – so named because nearly half of the property will be devoted to the planting of citrus trees – is situated on the last piece of available land in the area large enough for a residential development of this nature.
It will comprise a combination of apartments, townhouses and penthouses, together with a variety of upmarket communal features, all within a walled setting that offers high-tech security. As such it will appeal equally to those seeking a carefree luxury lifestyle as it will to non-Capetonians looking for an investment opportunity in one of the country’s most sought-after areas.
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| The Mirage set to become a Reality as Building Work starts |
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The credit crunch of the past few years has put the brakes on many property developments in South Africa and around the world - but not on The Mirage, a 17-storey mixed-use project in Cape Town’s upmarket De Waterkant area, where the developers have just broken ground to begin construction.
“Located in a prime position, this development will boast a three-storey boutique hotel as well as 54 luxury apartments over five floors, nine duplexes and a floor of penthouses, all with sweeping mountain, city and harbour views. And more than 40 units have already been sold for a total of R190m,” says Joris Kröner, founder of property marketing agency estata.
“There will also be two storeys of retail space for galleries, bookstores, cafés, gift shops and fashion outlets and two storeys of parking above ground as well as four and a half levels of basement parking, to complete a building of ultra-modern design that promises to become a Cape Town landmark.”
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| Want Money? Invest in South African Property Funds |
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South African investors who invested in property funds over the past three to five years invested well and are now smiling all the way to the bank.
South African investors who invested in property funds over the past three to five years invested well and are now smiling all the way to the bank.
This is according to the latest report by the Property Loan Stock Association of South Africa (PLSA), the representative umbrella body of the property loan stock sector comprised of voluntary members.
The report indicates that according to Morningstar, all five of the top-performing unit trusts in South Africa over five years are property funds and four of the five top-performing unit trusts over three years are also property funds.
| Property Loan Stock Association of South Africa, 25-10-2011 |
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| Buying Property for Investment |
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There are various kinds of property investment. Your home is an investment in that it provides you with rent-free accommodation. It may also yield a return in terms of increased value (a capital gain), although that gain may be difficult to realise unless you trade down or move to another region or country where property is cheaper.
A property investment should be considered over the medium to long term, i.e. a minimum of five and preferably 10 to 15 years. Bear in mind that property isn’t always ‘as safe as houses’ and investments can be risky in the short to medium term. You must also take into account income tax, if a property is let, and property taxes.
Capital gains tax is charged at normal income tax rates in South Africa, and you may be liable for tax on any profit made if the property isn’t your main residence. You also need to recoup purchase costs of 10 to 12 percent when you sell.
When buying to let, you must ensure that the rent will cover the mortgage (if applicable), running costs and void periods (when the property isn’t let). Bear in mind that rental rates and letting seasons vary with the region and town, and an area with high rents and occupancy rates today may not be so fruitful in the future.
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| De Goede Hoop Estate - A Slice of Paradise |
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Renowned artist Wilma Cruise and her husband John have found their slice of paradise tucked away at the foot of the steep slopes of Chapman’s Peak, a walk away from the beach.
Their five-hectare farmstead, De Wildehoek, on De Goede Hoop Estate, is surrounded by fynbos and towering pine trees. It is ideal for Cruise’s three horses – the apple of her eye Cara Minze, Gregor and Rio Grand, her prize-winning stallion. Cruise was born and bred in Johannesburg and never thought the day would come when she would live in “Slaapstad”. “This morning we saw the first whales while walking along Kommetjie Beach. They were about 100 metres away. We’re so blessed.”
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