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| Developers Buy into Soweto |
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With 13 massive property development projects under way or starting in 2008, South Africa's biggest township is offering fantastic returns to the adventurous investor looking for a new beat
Soweto, Johannesburg is no longer the unwanted stepchild. In the last seven years this region has outgrown its baby shoes and looks set to become a happy, well-adjusted adult.
During an investor tour of Soweto on 13 November, 40 developers were in awe of what has already taken place in an area many people consider simply a nasty legacy left over from apartheid.
During the tour, Region D manager Roger McCulloch was quick to dish out a challenge. "We are publicly declaring that we are in competition with Sandton."
"We want to showcase development over the last 10 years and instil some confidence [in developers]," confirmed the region's manager for programmes and strategy, Lali Mohlabane
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| Flooding Hits Garden Route Prices |
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Recent flooding in the southern Cape and along the popular Garden Route will have a serious short term impact upon the prices of affected properties, but is unlikely to result in a decline in general property values in the area
This is the view of Hein Pretorius, Principal Consultant for Lew Geffen Sotheby's International Realty Plettenberg Bay, who says that, although this flood was the highest in recorded history, the lifestyle on offer along the Garden Route is likely to keep people coming back over the longer term.
"Riverfront properties, which have always commanded a premium, will clearly be most affected. With the frequency and magnitude of flooding apparently on the increase, it is quite possible that the minimum floodline height will be increased. Anyone planning on building close to existing floodlines should bear this in mind," he said.
| Lew Geffen Sotheby International, 29-11-2007 |
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| Johannesburg in Top 50 Commerce Hubs |
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Johannesburg has been ranked 47th out of 50 cities worldwide in a new study of the centres of commerce that shape the global economy
The findings of the study, the MasterCard Worldwide Centres of Commerce Index, were presented in Johannesburg this week.
Compiled from research by a panel of eight independent economic, urban development and social science experts from leading academic institutions around the world, the index explores the strategic role that cities play in driving the global economy.
Based on six measurement dimensions consisting of over 100 data points, the index assesses the legal and political framework, the economic stability, the ease of doing business, the financial flow, the business centre capabilities, and the knowledge creation and information flow of the world's 50 leading cities.
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| Where Does South African Property Fit In? |
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Growth in developing countries has accelerated, driven by improved fundamentals
This is the view that Hans Timmer, manager of the Global Trends Team for the World Bank in the Netherlands, presented at the fifth annual IPD/SAPOA property investment conference held from 14 to 16 November 2007 in Cape Town.
However, there is disagreement amongst South Africa's property players as to the extent that South Africa will be in line for capital inflows, taking into account its sizeable current account deficit, inflation risks and moderately slowing demand for stock.
According to property economist Francois Viruly of Viruly Consulting the latest figures he has seen suggest that South Africa makes up approximately 2% of the emerging market and 0,5% of it in terms of total investment stock around the world.
| IPD/SAPOA Property Investment Conference, 28-11-2007 |
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| Young, Black and Moving to the Suburbs |
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Inroads are being made into apartheid-era divisions in the property market, with increased numbers of township professionals moving into former white suburbs to rent or buy
Experts say the migration is taking place in the search for access to services such as shopping malls, schools, health care and transport.
Prof John Simpson, director at the University of Cape Town's Unilever Institute, said statistics showed an increasing number of black people from middle-income groups moving into the suburbs from townships such as Gugulethu and Khayelitsha in Cape Town.
But, he said, those that moved always found a way to visit the townships from where they came, usually on weekends.
Statistics from TNS Research Surveys indicate an increase in Black Diamonds – those black professionals in the middle and upper-income ranges – living in suburbs, according to information provided by senior research executive Nomsa Khanyile.
With an estimated 2,6m Black Diamonds and 47% of these already living in suburbs, the number of arriving Black Diamonds was estimated at 50,000 per month, or about 12,000 to 14,000 households per month.
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| Property Demand to Feel The Heat |
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Higher interest rates and over-indebtedness of individuals will suppress demand for residential property in months to come
This reduction will continue to feed through the building sector, making developers more cautious about submitting further building plans over the coming few quarters.
There continues to be a significant downward trend in building plans passed, with overall real growth declining to -6,7% year-on-year (y/y) in September from August's figure of -2,7% y/y. This was the fourth consecutive month of negative y/y growth.
In the residential sector the real growth in building plans passed decreased further in September to reach -13,8% y/y from August's figure of -10% y/y.
In the non-residential sector, however, the real growth in building plans rose significantly to 25,2% y/y in September from August's figure of -4,1% y/y, returning to levels seen at the beginning of the year.
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| New Communication Service Offered |
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Ready-to-connect telecommunications services are a key differentiator in the property market, especially in new developments, such as security complexes, golf estates, shopping centres and business parks
In fact, these services were identified as a top priority for 83% of property developers and 72% of residents who took part in recent market research commissioned by Telkom.
Responding to this survey, Telkom has introduced Property Development (PD) Connect, a service especially developed for architects and property professionals to facilitate the implementation of communications and broadband infrastructure.
By registering with PD Connect, a developer is able to establish the necessary communications infrastructure before building begins. Progress can be tracked using a unique reference number, either through a single contact point or through lodging a query on the website.
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| Reporting of Rates Hikes Causes Déjà Vu Fears Amongst Johannesburg Property Owners |
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The property market recently experienced a sense of déjà vu as Johannesburg property owners waited to hear the final outcome of the city’s new municipal valuation role
The announcement came last week that residential property owners in Johannesburg would be paying half a cent in rates for every rand that their property is worth, and that, in line with rates charged for many years in Cape Town, rates would now be charged on both the value of their land as well as improvements. Johannesburg property owners previously paid rates based only on the value of the land at a total of 12,3c in rates for every rand of their land value.
Before the announcement last week, Johannesburg property owners awaited the new rates with trepidation, in the light of both the pre-2004 property boom which took place after the last evaluation, as well as reports in the press warning of ‘sharp increases’ for Johannesburg when the Property Rates Act comes into effect on 1 July 2008.
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| Prices on Durbans Berea Up by 15 Percent |
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The Berea/Morningside area remains high on the list of Durbans most sought-after residential destinations
Home to landmarks such as the Botanic Gardens, Greyville Racecourse, the Musgrave Centre and schools of the ilk of Maris Stella, Durban Girls' College and DHS, the Berea/Morningside area remains high on the list of Durban's most sought-after residential destinations.
This is despite market inhibitors such as the spate of interest rate increases over the past year and the National Credit Act, both of which have impacted heavily on buyer affordability in many parts of the Durban metropolitan area, says Jenny Hodgson of Berea-based Hodgson & Hodgson Estate Agents.
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| Cape Town Partnerships in Action |
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The City of Cape Town has doubled its financial contribution to the Cape Town Partnership over the next three years
This means the City will contribute R18 million over the next three years – an increase of more than 50%.
This year was also the first time that the City has entered into a three year financial contract with the Partnership – opposed to the normal one-year contract since inception in 1999.
Shaun Johnson, CEO of the Mandela Rhodes Foundation and Partnership Board Chairperson, said that this vote of confidence in the work of the Cape Town Partnership will ensure that the Partnership will be financially sound to deliver on its mandate and that projects planned for 2010 and beyond will be finished on time. Johnson expressed his sincere appreciation for the City’s contribution during the Partnership’sAnnual General Meeting held today.
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