Landlords of Top End Property in Cape Town Cash In

The information in this article is courtesy of Realestateweb (Rentals: Done deals at Cape Town’s top-end – 6 July 2009)

Latest rental news in Cape Town is that Pam Golding Properties has secured a tenant for a top end Bishopscourt property at a staggering R110 000 per month. Of course this property has all the luxuries that come with its price tag, including a putting green.

Trafalgar’s latest rental index shows that Cape Town’s landlords has enjoyed a smaller increase than in the rest of the country with the Mother City clocking 9.9% and the rest 11% average.

Pam Golding Properties rental director, Dexter Leite says that renting has become a very practical option for many people, especially with the banks making it difficult to obtain a loan. He added that for those unsure of their future or contemplating relocating, it makes a lot of sense to rent

Expatriates returning from aboard also opt to rent until they have more clarity to where they will be working and living.

Among the high end deals signed by Pam Golding are a R28 000 per month four-bedroom home on the Sunset Links golf course, a R28 000 per month five-bedroom home in Oranjezicht and a R17 000 per month 2-bedroom apartment in the City Centre.

Demand for Cape Town rental properties are undoubtedly growing in demand. Leite said benefits of renting include affordability, as capital is not tied up with deposits, transfer duties and bond repayments and tenants are not responsibility for insurance, rate and maintenance.

2010 World Cup Accommodation Enquiries Increase

With less than a year to go before the kick-off of the 2010 FIFA World Cup, hotel bookings in Cape Town are picking up momentum. Early predictions pointed to a slump due to the global economic meltdown, however South and Central American tourist seem to be the ones leading the way.

Pre-bookings of almost 80% at Pepper Club - the yet-to-be-finished five star luxury hotel and spa in Cape Town - by predominately Brazilian and Mexican soccer fans seem to point to positive things to come.

A large number of enquiries has been streaming in for Cape hotels for World Cup accommodation says David Solomon, Chairman of Solomon Brothers Property Holdings and developer of Pepper Club.

The Department of Home Affairs predicts that South Africa can expect between 450 000 and 500 000 visitors during the event, with Cape Town International Airport gearing up to handle 2400 travellers per hour.

Cape Property Sales On the Increase

The information in this article is courtesy of iAfrica (Cape property picks up – 23 June 2009)

Pam Golding Properties Western Cape Metro region, operating in the Cape Town metropolitan areas, has reported a surprising increase in sales for May 2009. Sales targets have been exceeded by 25%, with show house attendance also increasing.

The many public holidays and cautious approach ahead of the election, resulted in a slow April, however the interest rate cut and the orderly elections made up for it in May 2009, says Regional MD Laurie Wener.

Waterfront property alone bought in a staggering R30-million in transactions for Basil Moriatis and his team. Atlantic Seaboard Property and City Bowl property also did well and concluded R100-million in sales turnover.

Southern Suburbs property included three sales in Constantia, Bishopscourt and Newlands totalling R36-million. Howard Markham added that Rondebosch had eight sales totalling R26-million.

Wener said other areas doing well include South Peninsula and Blouberg as well as the Northern Suburbs.

Wener added that the mid-winter months are usually quieter for the property industry, but they remain positive. According to her the single greatest obstacle remains the banks’ strict lending criteria.

Cape Town Central Property – Hot and Happening

The information in this article is courtesy of iAfrica

The profile of buyers investing in property in the Cape Town City Centre has changed since the revamp around 10 years ago. According Laurie Wener, MD or Pam Golding Properties in the Western Cape metro region, more than 60% of property buyers in the Cape Town Central City 10 years ago, were investors. Today there are far more owner-residents who enjoy the hip cosmopolitan life that these properties offer.

The safe, convenient and affordable property in Cape Town City Bowl are hugely popular among holidaymakers and business people, creating a booming rental market – even in today’s market conditions.

Popular residential buildings include Cartwright’s Corner, The Adderley, Mutual Heights and The Decks, says PGP’s area manager for the Atlantic Seaboard and City Bowl, Basil Moraitis.

He added that these properties are especially popular among business people who want to avoid traffic by living within walking distance from work. Younger buyers are also interested in these properties because of its proximity close to work and the bustling Cape Town nightlife.

Moraitis says that property prices in the CBD have dropped some 15% since the boom they enjoy a few years ago. Some of their recent sales have included four one-bedroom units at Cartwright’s Corner, sold for between R910 000 and R1.4-million, as well as a R2.4-million sale for a two-bed apartment in Metropolis and R1.95-million for a two-bedroom unit in Quayside.

Pam Golding Properties also reported that short-term rentals enjoy typical daily rental occupancy of around 50% per annum. Short-term rental can go up to R9000 per month for a 1-bedroom apartment and R12 000 for 2-bedroom apartments. Long-term rental property in Cape Town Central ranges from R8000 for 2-bedroom apartments to R6000 for 1-bedroom units.

Lying 3km from Green Point Stadium, one of the Fifa World Cup venues, and the possibility of the new Integrated Rapid Transport System, make the prospects for these properties even more appealing.

10 Reasons Why Your Property is Still on the Market

Are you trying to sell your property, but all efforts fail? Do you try everything but still wake up every morning to see the For Sale board firmly planted on your lawn? Here are a number of clues why your property is still on the market:

1. You’ve Got the Price Wrong
Unrealistic expectations are a seller’s biggest enemy, which is why over-priced property is the most common reason why a property doesn’t sell. Make sure you price is in-line with similar properties on the market.

2. Your Location is Not Right
We all know how important location is when you buy property. Unfortunately, as a seller, there is little that you can do to rectify this. Rather focus on getting the price right and a buyer might just see past the doubtful location.

3. Your Agent is Failing You
Finding the right estate agent is very important, as an incompetent agent might be the reason why your property is not selling. Make sure you choose an agent with a good reputation and a proven track record.

4. You Property Doesn’t Show Well
Ideally you should try to make small amendments in your house, even if it is just screwing in a light bulb. Present your property as an empty canvas and buyers will be able to see your home become theirs. Remember that buyers will turn away if they find out you are trying to hide problem areas, so ensure that your house is in a good condition when potential buyers step through your door.

5. Your Timing is Out
There are certain times when property sales drops. These periods include winter months and school holidays. Try to wait a while before you through in the towel.

6. Your Competition is Too Much
Be prepared to battle with competition especially when market condition favour buyers. This will mean that there will be more sellers than buyers and excess supply will result in lower prices. In times like these you will experience a lot of competition.

7. Your Marketing is Insufficient
Selling a home does not include sitting around and waiting for buyers to walk through your door. Your agent needs to advertise your property and On Show dates in newspapers, via brochure distribution, on the Internet etc. Ensure that you use good quality photographs in all your ads.

8. The Economy Is Not In Your Favour
Tough economical conditions are a major cause of the collapses of property markets around the world. In these times people normally hold on to their money because times are very uncertain.

9. Strict Lending Criteria Gets in Your Way
Banks may enforce strict lending criteria, meaning declined home loans will increase. This will certainly hamper property sales.

10. You Are the Problem
As the seller, you have to be able to take constructive criticism from you agent as well as buyers and you need to be flexible in negotiating a price.

10 Tips on Viewing Property

When viewing a property one should try to do as much background research as you can, especially on the property and the area. View as many properties as possible in order to get an impression of what is on the market. Here are some things to remember when viewing a property.

1. Phone a Friend
It is a good idea to ask a friend to accompany you. This way you are sure to get another opinion and you have a better chance to spot any problems with the property.

2. Daytime Rule
To ensure that you don't miss anything, view properties during the day. It is also important that you view the property for a second at a different time of the day to get another perspective.

3. Take Note(s)
You will probably see more than one property per day so make sure you make notes on all the property. Write down all the strong and weak points of the property so you can compare it once you are finished.

4. Snap It
Remember to take a camera and take lots of photographs. This will help you when it comes to decision time.

5. Objectivity is Key
Stay objective and don't get too overwhelmed with what you see as this will cloud your judgment.

6. Take It Easy
Viewing too many properties per day will only exhaust you and cause you to loose focus.

7. Fire Away
Don't be afraid to ask as many question as you want.

8. Time Is Yours
Don't let anyone rush you. Walk through the property at your own pace.

9. Don't Be Pressured
Real estate agent might try and pressurize you into making an offer.

10. Look Beyond the Furniture
When you enter a property try and block out the curtains, furniture and carpets as these things are not usually included in the sale.

Cape Town Property: Why You Should Invest Now

Cape Town is well known for its spectacular views of mountains and sea. It is hard to find a property in this popular city that does not have a room with a view. Tourists flock here year-on-year to experience the fantastic weather, pristine beaches and the diverse cultures that Cape Town has to offer.

Cape Town recently added yet another prestigious accolade to its list of awards by being named the Best World City in the 2008 Telegraph Travel Awards. This confirmed its popularity among international holidaymakers and also highlighted the city’s investment potential.

The city’s most exclusive suburb, Bantry Bay, recently made news with a staggering property sale of R36,5 million ($4,37 million). This suburb is located on the Atlantic Seaboard, known for being at the top end of the market and often attracting cash buyers with a keen eye for a good investment.

Another reason for investing in Cape Town property is the fact that the property market here shows extreme stability. This has been proven in the recent economic downturn; rentals throughout South Africa are down, yet those in Cape Town seems to be booming.

The favourable exchange rate in South Africa also makes Cape Town property an attractive investment. Also, the fact that South Africa has such a strong economy means that you are guaranteed to yield excellent long-term returns on your investment.

The availability of property in Cape Town is also a factor for investors to consider. The city has seen a lot of development in the last 10 years. The shortage of available sites, especially in popular place like Camp’s Bay and Clifton seems to be drying up, resulting in a golden opportunity for investors.

The 2010 Soccer World Cup being held in South Africa is one of the biggest reasons to invest in Cape Town property. The city will be hosting a number of matches at a brand new stadium. Along with a massive infrastructure boost, experts are expecting Cape Town to be a more desirable destination for leisure and business travellers, investors, and of course, its residents after the tournament.

Cape Town property has long been some of the country’s most sought after, especially Atlantic Seaboard Property. - Elizabeth McLachlan

BER Predicts Three More Cuts

The information in this article is courtesy of iAfrica (BER sees 150bs cut – 22 May 2009).

The Bureau for Economic Research (BER) believes that more limited rate cuts of 50 basis points could be expected in South Africa. There is also a chance that the Reserve Bank might go a bit further than that.

Professor Ben Smit of BER said that the Governor acknowledges recession meaning we can expect “recessionary conditions”.

According to Smit some improvement can be expected towards the 3rd quarter of the year, and he pointed out that the global crisis has probably had about 4% impact on the BER’s GDP forecasts.

BER predicts inflation in South Africa at an average of 6.8% in 2009, dipping below 6% in August, but ending the year back at 6.9%. In 2010 these levels will move back to within target range averaging 5.3%.

In other predictions, the BER sees South Africa's nominal wage rate at an annual average of 8.3 percent in 2009 from 9.9 percent in 2008, dipping to 6.3 percent in 2010.

Selling Options: The Pros and Cons

The information in this article is courtesy of Realestateweb (Selling your property – 21 May 2009)

When it comes to selling property, you have a few options. Most people opt for using an estate agent, other sell by private tender and some go to auction to get their property off the market. Here are the pros and cons of these options:

Sale by private tender incorporates the best selling methods of estate agents and auctions. Your property will also have a limited time in which it will be sold. The process of selling by private tender is not transparent, which means that buyers are forced to put their best offer forward as they do not know who has offered what.

A disadvantage of selling by private tender is that buyers have a short time in which they have to make a decision, as there are limited viewing days. Also, sellers might not accept any of the offers and buyers never know what price they are bidding against, leaving them no choice but to put in their maximum bid.

Using an estate agent to sell your property means you get a personal service. Safety is also guaranteed as the agent will screen and pre-qualify potential buyers to view property. Also, you can benefit from estate agents’ knowledge of legal terms and the property market.

However, estate agents charges a commission and advertising and marketing your property might be expensive. Another disadvantage of using an estate agent to sell your property is that not all agents have the incentive to get the highest price for the property.

When you sell your property on auction, you are assured that the buyer will take care of the commission as well as all the other costs of the transaction. The deal is transparent since auctions are live and bidders know at every stage what the highest bid is. The purchase of a property on auctions is also not subject to bond approvals.

A disadvantage of selling on auction is that buyers are often scared of bidding, because they are not familiar with the process. Also, there is often an oversupply of stock meaning sellers can often miss out on an opportunity to sell. Another downside is that in some cases, sellers are responsible for advertising costs.

More Accolades for the Mother City

Cape Town has won another prestigious prize – this time palming in the award for Africa’s leading destination at the World Travel Award in Durban on May 11. The Property Magazine reports that this is the second time in a row that this popular city has walked away with the award.

Executive Director of Economic, Social Development and Tourism in the City of Cape Town, Mansoor Mohamed, who accepted the award, said that it reaffirms Cape Town’s position as leading tourism destination and will also help to make Cape Town the city of choice for the 2010 Fifa World Cup.

Travel experts have rated this award as the best endorsement that any travel product can receive and it is globally considered as the Oscars of the travel industry.

The Mount Nelson Hotel in Cape Town also scooped up the award for Africa’s Leading Hotel. Mariette du Tiot Helmbold, CEO of Cape Town Tourism, accepted the award.

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Atlantic Seaboard Property: It's Bargain Time

The information in this article is courtesy of Business Day (Bargain time on the Atlantic Seaboard – 6 April 2009)

Never has there been a better time to buy property in this sought after area. According to Di Reid, principal of the Atlantic Seaboard Chas Everitt International franchise, the prices for expensive properties on the Atlantic Seaboard has come done – presenting those wishing to buy into the area with a perfect opportunity to scoop up a bargain.

Property in Camps Bay are selling for between R4,5 and R10 million and Bakoven homes around R8,5 million. You can now pick up Clifton apartments for between R6,5 and R10 million – between 6% and 21 % lower than six months ago.

Reid added that there has also been a trend among investors to buy some of the older properties in these areas to renovate or to demolish to make room for contemporary sectional title properties. These properties can be rented out for between R15 000 and R25 000 per month.

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Is the Rent-To-Own Option For You?

The information in this article is courtesy of iAfrica (Pitfalls of Rent-to-Own – 28 April 2009).

Since banks are insisting on exceedingly large deposit before granting home loans, the rent-to-own option has become a popular choice among home buyers.

In a nutshell, rent-to-own or lease-to-own is a term relating to a real estate agreement, which is composed of a rental lease, and a purchase agreement where the tenant has the option to purchase the property at a fixed price at a specified point of time in the future. The main idea of a rent-to-own agreement is for the buyer/tenant to rent and maintain the property for a set period of time before she or he must obtain a home loan and exercise an option to purchase — or decide to walk away from the deal.

Dr Willie Marais, national president of the Institute of Estate Agency (IEASA), believe that both the tenant/buyer and the landlord/seller win in such an agreement.

For sellers, the agreement means that they have the opportunity to tap into a broader market of potential buyers, not just those with good credit and cash for a deposit. Also, the rental income will cover existing mortgage and an opportunity to lock in the property price that might fall in a down market.

One of the main advantages for the seller is probably the fact that tenants will have an interest in maintaining the property, as it will soon be theirs.

Potential buyers will have the advantage of moving into a home that they want without handing in a large amount of cash.

A rent-to-own transaction has 3 agreements: an Option to Purchase, a Lease Agreement and a Sales Agreement. The landlord/seller will usually charge an option fee equal to 1% to 3% of the purchase price, which can then be paid off by the tenant/buyer as part of the rent. This will then act as most of the deposit on the property at the end of the rental period.

Marais warned potential rent-to-own buyers that they should consult an experienced estate agent, a reputable mortgage originator and the advice of an attorney should they decide to enter such an agreement. The following questions should be answered before signing the agreement:

Is the price fair given future price expectations?
What portion of the rent will be credited towards the purchase price?
Who will be responsible for rates/taxes during lease period?
Under what conditions could the rent-to-own contract be voided?
Under what conditions will the buyer be refunded any part of the option fee?

Marais also proposed that all buyers that are considering renting-to-own should first consider renting cheaply while saving for a deposit, as this might be a better option in some cases.

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Legal Duties of Estate Agents

The information in this article is courtesy of iAfrica (An Estate Agents Legal Duties – 24 April 2009).

When selling your residential property, it is essential that you are aware of the duties of the estate agent. The agent has a responsibility towards the seller but must always be fair to the buyer. These are some other duties of an estate agent:

1. An agent must strive to achieve the highest possible price excepted by the buyer.

2. Agents must ensure that there is no conflict of interest such as selling to themselves or to friends. If so, agents must disclose this information.

3. Agents are not allowed to take any payments from the buyer to achieve a quick sale.

4. Agents are not allowed to disclose any private details about the seller especially not to help the bargaining process – unless this has been discussed.

5. An agent must submit to the clients all offers on a property including those that may have come through another agency on a shared commission basis.

6. Agents must advertise property in an honest way according to the promises made when the mandate was received.

7. Payment of rental properties must be kept up-to-date by agents and monthly statements must be send to clients if money is kept in the agent’s trust.

Southern Suburbs Struggling

The information in this article is courtesy of Property24 (Southern Suburbs taking a baeating - 15 April 2009).

The Southern Suburbs of Cape Town has certainly shown just how tough conditions are.

Figures show that there has been 49 sales between January and March 2008 at an average price of R6,4m against the 12 sales at an average of R3,1m for the same period this year. It also shows a 14% difference between sale price and list price.

Seeff's Upper Constantia team of Sari Raz and Christiaan Steytler explains that these figures don’t necessarily mean that price have decline but rather illustrates that less expensive properties are being sold.

Raz added that March did see 3 good sales between R4m and R7m by overseas buyers.

Germans Still Investing In South Africa

The information in this article is courtesy of iAfrica (Germany Loves South Africa – April 1 2009).

A popular German publication, The Süd-Afrika Magazine, which focuses on Southern Africa as a destination, recently held their annual expo.

This year’s show featured food, music and general information on Southern Africa and exhibitors ranged from tour operators to immigration specialists.

Dina Porteous, area principal in the Margate area for Pam Golding Properties, Yvonne Booysen, manager of Pam Golding Properties in Margate’s rental division and Gaby Moessner, manager of the Pam Golding Property group’s German office, attended the Süd-Afrika Tage 2009 show in Germany. This event attracts high profile investors and incorporated travel, trade and business meetings – including a business conference highlighting investment opportunities in Southern Africa.

According Porteous their exhibit stall attracted a lot of attention at the expo. She believes that German investors choose South Africa because of the excellent climate, friendly people and beautiful homes.

Moessner said that the attendees of the expo are extremely well informed about the South African property market. They generally prefer standalone homes rather than golf-estates of town houses and some have rental income in mind. The Western Cape including the Overberg region remains the most popular location.

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Worry Over Rental Growth

The information in this article is courtesy of iAfrica (Rental Growth Concern - 27 March 2009).

According to Rode’s Report on the SA Property Market for 2009, the global economic crisis is causing a slowdown in demand for office space. This, in turn, is causing concern over the moderate rental growth in the country.

John Lottering feels that there is no need for concern yet, as decentralised nodes in Durban, Pretoria and Cape Town are still showing nominal rental growth above the growth in rental costs.

However, the first quarter of 2009 also found that the economic times facing the retail trade has put severe pressure on the market. So far only Durban’s nominal rentals exceeded expectations, while Port Elizabeth’s poor performance showed rentals contracting by one percentage point mainly due to the difficulties faced by the region’s motor vehicle manufacturing industry.

Flat rentals were just as unimpressive when compare to consumer inflation with no relieve foreseen in the near future, even with recent interest rate cuts and the promise of more relief during 2009.

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Rate Cut Still Expected in April

iAfrica reports that it is unlikely that the Reserve Bank will cut interest rates before the Monetary Policy Committee meeting on 15 and 16 April.

Even though there are still a possibility of an emergency meeting before then, the urgency and utility is much less than in February.

Absa Capital expects the SARB to cut rates by 150 basis points in April, followed by 100 at the June and August meetings. These predictions are mostly in line with market expectations but the possibility of rates bottoming at 6.50% is not out of the question.

Apart from the direct relief these rate cuts will offer — whether you are struggling to repay housing bonds, motor vehicle leases, bank overdrafts or credit card balances — the future are starting to look better. This is according to an article that was published in the latest Pam Golding Properties Intellectual Property Magazine. The article also states that these rate cuts does not signal the end of the downward cycle that started in June 2006, but it certainly makes things easier.

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Western Cape Market Prices Hold – Sortheby’s

The Western Cape property market is looking up according to a recent analysis by Sotheby’s International Realty South Africa. The analysis shows that while the residential property price ranger recorded a 35% drop in turnover for the Western Cape market for the first 6 months of 2008 – from R12b-R8b – and a 45% drop in units sold – from 7500 units to 4100 units – average prices actually increase by 19% - from R1,67m to R1,99m.

According to Barak Greffen, executive director of Sotheby’s International, this increase can be attributed to a large number of transactions in the upper segment of the market, and less in the lower market. This led the data to reflect an increase in prices.

Last year saw some hefty sales, the most significant being a R24m Clifton sale, R24m Granger Bay sale and a R23m Bantry Bay sale.

During the last 3 months of 2008 over 100 units of property were sold for R476m in the Atlantic Seaboard at an average price of close to R4m. This shows that there was still demand for property in highly sough-after areas.

Greffen finished by saying that savvy buyers have been waiting for the market correction to pick up the top-end properties from realistic sellers at market related prices, in order to gear up for the next upward cycle in the market.

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