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| Estate Living Where to From Here? |
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John Loos, Property Strategist, FNB Commercial and Andrew Watt, Business Development Director, Lightstone, put together this report on Estate Living. The report covers the reasons for the rising popularity of complex life and considers what the future is for this type of lifestyle
Estate living is a global trend that has been particularly popular in South Africa where a variety of residential, golf, and leisure estates have been developed over the past decade. The trend shows no signs of slowing and according to Lightstone's proprietary Freehold Estates database, South Africa now has 1,435 registered Walled Estates containing 140,000 properties. These Estates primarily provide a secure lifestyle which has been particularly important in South Africa as a result of the crime situation. Other advantages include having access to high quality recreational facilities, increasing the sense of community (which is limited by the high walls outside Estates) and having more control over community expenditure and development.
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| Property Outlook for 2008 |
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Although the property market is currently experiencing a downturn, the forecast for next year is positive, according to industry leaders, with strong growth predicted in the lower end of the market as well as the commercial and retail property classes and a recovery expected by 2009
"At double-digit house price inflation, it's still a pretty good situation for a downturn, and 2008 is expected to bring the turning point."
So says John Loos, property strategist at FNB, who released his outlook for the market in 2008 this week, in which he evaluated the underlying strength of the market during the current downturn.
In his report Loos states that when the downturn began the prospect of a market collapse similar to the mid-1980s (where house price deflation plunged to -9% around mid-1985) may have loomed large in some minds, following a boom significantly greater than that of 2 decades ago.
However, he notes that although on a declining trend, we are still experiencing real house price inflation above 12% (i.e. double-digit nominal house price inflation exceeding consumer price inflation by a significant margin), and theorizes that the possibility exists that we may be approaching the bottom of the cycle.
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| Holiday House is not a Home |
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Holiday home owners might wish their coastal pads were where they lived 365 days of the year, but the reality is that many are absentee landlords who visit infrequently or rent out their property for most of the year
But whether this means that these properties can legally be referred to as homes – and the implications of this for the rights of landlords and their tenants – was raised by a recent Supreme Court of Appeal judgement.
In the September judgement, Judge F.D.J. Brand, in Barnett v Minister of Land Affairs [2007] SCA 95 (RSA), stated that holiday houses or cottages were not "homes" covered by the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the Pie Act).
The Pie Act provides for the prohibition of unlawful eviction and for procedures for the eviction of unlawful occupiers.
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| Interest Rates Having Minimal Impact on Listed Property Prices |
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ApexHi chairman Marc Wainer says this is largely because the market is factoring in superior growth for the sector
ApexHi is reflecting a total return of 14% after the first three months of this financial year, with further capital growth expected and another three distributions to come.
Wainer says the yields that investors can get on listed property stocks are also looking attractive when compared to the yield on long term bonds, which has decreased marginally.
“Listed stocks are also expected to receive a boost following the PIC’s announcement that it aims to have a total of R70-billion invested in property. Its current investment is about R15-billion, so it needs to invest a further R55-billion. A portion of this will be in listed property, which almost creates an underpin at current price levels,” he says.
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| Wave of Opportunity as Jeffreys Bay Development Takes Shape |
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Construction has begun on the R3,5 billion Fountains Estate commercial and residential development in Jeffreys Bay that is revolutionizing South Africa’s fastest growing coastal town
A R2 billion plan becomes a R3,5 billion reality as commercial demand far outstrips researched planning.
The extent of market demand was under estimated when the Fountains Estate was in planning, and what was announced in 2005 as a R2 billion neighbourhood development has materialized into a R3.5billion mega project.
The 600ha mixed use development, among the largest in South Africa has virtually doubled in size and scope following aggressive demand for business opportunities on the Garden Route over a period of just 24 months.
Demand for a commercial node was originally identified by Oswald Buchner the then owner of the Fountains Farm in 1985 and it was acknowledged by the Planning Authorities.
Now, 20 years later demand is no longer for a local node but for a regional all embracing commercial, retail, industrial and residential new town that will inject R3,5 billion into the Jeffreys Bay economy.
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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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