MAY/JUNE 2017
THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE
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SURV I V I NG CYC L E S OF P ROP E RT Y
IS THERE AN IDEAL TIME
I N T E RV IE W
TRANSFORMATION EAAB’S EUGENIA KULA-AMEYAW ON WHY IT SHOULD BE AN INDUSTRY PRIORITY
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HOW AGENTS SHOULD BE USING FACEBOOK
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TRENDS THAT WILL IMPACT
RETIREMENT PROPERTIES 26/04/2017 15:43
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INDUSTRY NEWS
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S
outh Africa’s recent downgrade to junk status has put a darker cloud over the property market. Although there should be more negotiating power all round, home owners with high debt have been warned to prepare for 2017 interest rate increases. Of course, there will be opportunities and possible price stabilisation within this market too. Relevant in a financially aware economy is how agents can use their local network to their advantage at minimal expense. Sungula Nkabinde’s Facebook feature provides useful pointers on social media upskilling to connect with your community. See page 15. Can risk-averse property investments be found overseas? Our international feature on real estate trends evaluates a report that suggests Germany and the Nordic countries will be European property’s new safe havens. In our cover story, Eugenia Kula-Ameyaw, chair of the Transformation Committee at the Estate Agents Affairs Board (EAAB), offers views on where the property industry is falling short and how it can change for the better. Retirement is a growth industry with positive news to report. Georgina Guedes investigates how the old retirement home model is being phased out in favour of more care-based and communityorientated housing solutions (page 24). We would love your input. Join the online debate at propertyprofessional.co.za or sign up to our newsletter by clicking on the newsletter tab.
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TOOLS OF THE TRADE
Catherine Davis PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 facebook.com/PropertyProfessional twitter.com/Property_Prof
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WHICH ARE EUROPE’S SAFER INVESTMENT CITIES? FACEBOOK: USE IT CLEVERLY TO ATTRACT CLIENTS
18 15 The EAAB’s
EUGENIA KULA-AMEYAW on racism, charters and industry obstacles
Five retirement trends worth knowing about
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Exploring the cycles of property and learning how to ride them
THE CREATIVE GROUP MANAGING DIRECTOR Terence Hewitt terence.hewitt@thecreativegroup.info Editor Kim Maxwell Content business manager Catherine Davis Creative director Leah de Jager Copy editor Kirsty Wilkins Group digital editor Lauren Joubert
ADVERTISING Sales and marketing manager Michèle Jones michele.jones@thecreativegroup.info | 084 246 8105 Advertising, production and subscriptions Jackie Maritz jackie.maritz@thecreativegoup.info Printing Paarl Media | Disclaimer: the publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding goods or services advertised within. Information correct at time of printing. © Copyright The Creative Group. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from the publisher. The publisher is not responsible for unsolicited material.
26/04/2017 16:25
LOCAL NEWS
LOCAL INDUSTRY NEWS CLIFTON AND BANTRY BAY ARE SUB-SAHARAN AFRICA’S MOST EXPENSIVE SUBURBS FOR PRIME PROPERTY The New World Wealth Report 2017 says the most expensive cities for property in sub-Saharan Africa are:
CAPE TOWN Clifton, Bantry Bay 5,800 * $/m2
MAURITIUS CYBER SCAMS AND CONVEYANCERS As of July 2016, the Attorneys’ Insurance Indemnity Fund (AIIF) no longer covers conveyancing firms who have fallen victim to cybercrime. This is because of a dramatic increase in claims. Before 2016, the fund paid out R21.08m in total. During Q1 2016 alone, this rose to R30m. These cyber scams generally involve an e-mail arriving at the conveyancer’s office, seemingly from a client, notifying the conveyancer of a change of banking details. All future payments are then made into the new account, which in fact does not belong to the client. According to Maryna Botha, a director at Smith Tabata Buchanan Boyes, it is necessary for conveyancers to be vigilant, especially now that they are not covered for these losses. Says Botha: “We can no longer accept any of these kinds of notifications from clients at face value. We have had to train our staff to request original copies of change of banking detail notifications. They have to be suspicious of any communication that they receive and have to educate clients about this onerous extra step that they have to go through.” She believes that criminals have targeted conveyancing because a great deal of cash changes hands frequently. She adds that there is no other insurance available to protect conveyancers against such losses, so vigilance remains the only option. 02
PROPERTYPROFESSIONAL.CO.ZA
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Grand-Baie, Port Louis 4,900 * $/m2
JOHANNESBURG Sandton 2,800 * $/m2
DURBAN
Umhlanga 2,200 * $/m2
LUANDA 2,200 * $/m2
*The price of a 200-400m2 apartment/villa in a prime part of each city, rounded to the nearest 100
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LOCAL NEWS
DOGON’S GAUTENG EXPANSION
F
rom her first R12,000 sale in 1969 to her most recent R42m land-only deal last year, Dawn Dorfman has had a record-breaking career. Her latest industry achievement is a move to MD of Dogon Group Properties’ Gautengbased division in October 2016. Hitting the Western Cape’s northern suburbs at 22, Dorfman was determined to succeed. And succeed she did. Dorfman’s records have included six houses and a block of flats in one day, 16 valuations in one day, 17 sales in one month, 55 houses in a year and countless national accolades, including being a finalist in the Nedbank Agent of the Year awards in 2003 and 2004. Now, after 11 years of partnership with husband Abe Flax in D&A Properties, Dorfman is “excited about partnering with the Dogon Group Properties and thrilled by the backbone it provides for unlocking land in the area for development”. She says there is a huge demand for luxury homes in Gauteng. “New developments on the outskirts of Sandton’s business district, Hyde Park and Sandhurst will continue to provide world-class value for the finest properties.”
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The Property Professional newsletter offers
INDUSTRY INSIGHTS,
expert commentary, video interviews and news
BALANCED ANALYSIS
of market trends and industry affairs
EXPERT ADVICE and
useful how-tos to streamline your company
A COMMUNITY of
20,000 estate agents
• Sign up at propertyprofessional.co.za • Click on the NEWSLETTER tab
Property Practitioners Bill input The Minister of Human Settlements Lindiwe Sisulu published the Property Practitioners Bill on March 31, initially allowing stakeholders 30 days to comment. The minister said that the new bill “is part of government’s response to the changing market conditions. It seeks to create an enabling environment to enhance economic activity within the real estate sector. It will also help open up market opportunities for new entrants into the real estate sector, especially black people who were previously disadvantaged”. At the time of going to press, Human Settlements head of ministry Francois Hugo had extended the gazetted deadline for comments to May 18 2017, to allow for public holidays and ensure adequate industry participation. Rebosa chief executive Jan le Roux believes the original deadline was impractical. Le Roux says “we are glad that this has happened as the existing Estate Agency Affairs Act dates back to 1977 and is totally out of date in today’s economy” but adds that Rebosa is still studying the newly released bill. The non-profit company believes that current legislation and regulations create barriers, not gateways, which inhibit the entry of new agents into the industry. Keep an eye on propertyprofessional.co.za for updates.
26/04/2017 16:40
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2017/04/20 9:59 AM
WHAT’S ON
All you need to know to stay plugged in to the property industry in South Africa
MAY
23-24 30-31
WHAT AFRICAN CONSTRUCTION AND TOTALLY CONCRETE EXPO WHERE G allagher Convention Centre, Johannesburg CONTACT bit.ly/2mHIdQN
WHAT GRI AFRICA SUMMIT WHERE Venue TBC, Johannesburg CONTACT bit.ly/2nox4Tq
JUNE
19-22 20-22
WHAT IEASA PROPERTY INDUCTION WORKSHOP WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2mn6KI4
WHAT SAPOA CONVENTION AND PROPERTY EXHIBITION WHERE CTICC, Cape Town CONTACT bit.ly/2mEZBUJ
JULY
16-28 4
WHAT SAPOA PROPERTY DEVELOPMENT PROGRAMME WHERE UCT’s Graduate School of Business, Cape Town CONTACT bit.ly/2mF1fpm
WHAT IEASA COMMERCIAL AND INDUSTRIAL BROKERAGE WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2mn5vbg
Add to your diary now THE AFRICA PROPERTY INVESTMENT SUMMIT To be held at the Sandton Convention Centre on August 24 and 25, the summit is an opportunity for property professionals to learn more about investing in real estate on the continent. Expect debates, discussions on industry trends and the chance to share your experiences. There is exhibition space available for more than 50 exhibitors. Early bird registration closes on June 1. apisummit.co.za
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BRIDGET MCNULTY
PROPERTY TREND: VIRTUAL REALITY
The use of virtual reality in property is growing rapidly in the international market. But is it likely to take off in South Africa any time soon?
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few years ago, virtual reality was predominantly used in gaming. Now, virtual reality in property is already worth about $1bn globally and it’s estimated that it will treble over the next four years. While South Africa is lagging behind, mainly due to cost and accessibility, this could change quite quickly in the near future as prices drop and the technology becomes more widely used. Virtual reality is most often used for new builds as buyers can get an idea of the space, long before the bricks and mortar are in place. Internationally, it is increasingly used for high-end properties, allowing buyers anywhere to view the property online, as though in real life. So will it take over video soon? That’s unlikely, according to Simon Bray, CEO of Private Property. Says Bray: “Virtual reality really adds value to new developments, for example, by allowing buyers to see something that they couldn’t see before. But for existing property, it’s unlikely to replace video any time soon. Video is still more accessible, easier and cheaper to produce, and doesn’t require special hardware or software.” At the moment, the property process involves a client viewing pictures and video, visiting the property and making an offer. It’s likely that clients are still going to want to view the property in person, even if they’ve taken a virtual tour. So the question remains: for existing properties, does virtual reality fundamentally add more to the property buyer’s experience? In 2017, it appears not yet.
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Wealth “ creation R750 a month. Belhar Gardens units are resourceefficient. Head of Affordable Housing Development Finance at NCIB, Manie Annandale, says this is intentionally aimed at containing the total cost of accommodation for low-income households. MHA CEO Renier Erasmus says the inclusion of green energy devices such as centralised heat pumps and innovative ceiling insulation technology makes perfect sense for Belhar Gardens and, indeed, all future social housing developments. Belhar Gardens is one of the first social housing projects in South Africa to have applied for EDGE Green Building certification. Annandale says meeting the rigorous EDGE standard requires that the development achieves at least 20% savings in energy, water and embodied energy in building materials.
and shares for all those who work for Leapfrog, medium or long term
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NEDBANK FUNDS SUSTAINABLE AFFORDABLE HOUSING Nedbank Corporate and Investment Banking (NCIB) has made the first disbursement from an innovative R120m Sustainable Affordable Housing finance facility, a collaborative effort between the bank and South Africa’s Green Fund. The first recipient of funding is Belhar Gardens, a Cape Town social housing project owned and managed by Madulammoho Housing Association (MHA). The 630-unit development is the result of a public-private partnership and was made possible through the provision of land, grants and subsidies by the Western Cape provincial government and the Social Housing Regulatory Authority. Belhar Gardens is aimed at households earning between R2,500 and R7,500 a month. Rent starts from
Johan van Schalkwyk Leapfrog New West Rand
TIPS FOR SELLING A LUXURY HOME
Ensure that you limit potential future inconvenience for both seller and buyer by supplying a list of trusted service providers and repairmen. So any troubleshooting can be directed to relevant parties and not via the seller post-transfer Mike Greeff, CEO, Greeff Properties
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Forex for less
eceiving foreign currency into South Africa or transferring funds overseas can be confusing, costly and time-consuming. Charter Forex promises aggressive rates and simpler processes. A key offering is that they will facilitate local bank accounts for non-residents, so they can more easily buy property in South Africa. Headed by Peter Jones and Waynne Meintjes, Charter Forex has been trading for 15 years. It deals with more than 300 professional firms in South Africa and private clients locally and abroad, offering services linked to foreign exchange and cross-border payments.
“We can open high-interest-earning resident and non-resident bank accounts for clients, with no bank charges, no queues and no call centres,” says Jones. “Because of the volumes that we facilitate and the fact that we are small enough to respond individually to clients, we can offer extremely competitive exchange rates, with no extra admin fees.” Funds are held with Investec Bank while Charter Forex serves as a facilitator and administrator. Charter Forex is a product of Charter Fiduciary Administrators and is registered with the Financial Services Board (FSP 14204).
For franchise / agent opportunities call Bruce Swain 082 783 7198 bruce.swain@leapfrog.co.za
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LOCAL NEWS
Ask the expert: decking trends
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eautiful decking can transform outdoor spaces and add value to a home. Timbermann owner Ryan Kriedemann explains what your clients should know. PLAN WISELY
Choose a product that considers the building as well as the landscaping. To reduce costs, only install decking in commonly used areas. You could also design decking to be above ground level so that excavations and retaining walls aren’t required. And avoid unnecessarily thick timbers.
CONSIDER LONGEVITY
Outdoor decks should last for more than 30 years – but proper construction protocols and materials are key. A minimum height of 400mm above ground improves ventilation below the deck. Any water that might gather underneath should be properly channelled. MINIMISE MAINTENANCE
No maintenance is necessary for decking that weathers naturally to silvery grey. Where owners want to preserve the colour of the wood, decks should generally be oiled, not varnished, so that sanding won’t be necessary.
SUITABLE WOOD
TREATMENT
Structural timber should either be naturally resistant timber or treated with copper chrome arsenate. The correct grade of treatment for the building environment and climate is crucial.
IMAGES: SUPPLIED
Usually, coastal regions with high humidity suit timbers such as balau, massaranduba and garappa. The Highveld, with its humid summers and dry winters, requires much harder timbers such as ironbark, or oily timbers such as teak.
4 REAL ESTATE VIDEOS TO WORK FOR YOU As a real estate professional, let The Creative Group help you market your business, brand and listings with video PROMOTE YOUR PROPERTY A walk-through of a property mimics the experience of virtual reality. The viewer has a true sense of the property and its layout. Or consider an alternative: an upmarket, high-production video gives the viewer a feel for the home while showcasing the best aspects of the property. It includes drone footage.
SELL YOUR AREA Our suburb videos show off an area and its best amenities, exploring positive aspects
of a community and highlighting good schools. Ideal for marketing your stock to its best potential, these videos will position you as the local expert and instil a sense of trust with your buyers and sellers.
MARKET YOUR DEVELOPMENTS Custom video uses considered editing with development marketing in mind. It includes an interview on the property with a development representative and drone footage.
TELL YOUR BRAND STORY A profile video is a professionally edited interview with a real estate professional. It could be the company CEO, a principal or an agent, and it includes a branch profile. Use it to create strong brand awareness to result in more leads.
Watch this showreel of some of the work we’ve produced for our clients bit.ly/2op4Dnj
THE CREATIVE GROUP can help you create high-impact, consistent messaging and brand awareness for the right media platforms, with cost efficiencies in mind. All our videos are crafted towards increasing our clients’ sales and bottom line. Chat to us about your requirements: e-mail michele.jones@thecreativegroup.info
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Dream for one, dream for all.
Enter your dream for change and help us change lives... whether your dream is for yourself, someone else, a community or charity in need! Go to www.ignitingdreams.co.za and submit your dream. You could WIN up to R100,000! *Terms and conditions apply
National Awards 2017 Celebrating the success or our champions at a glamorous gala dinner at the Maslow Hotel, Sandton. A big thank you to all our sponsors and our special guest performer, Michael Mole.
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TOP METRO PARTNERSHIP (1st) TOP NON METRO AGENT (1st)
TOP METRO AGENT (1st)
ANMAR MARAIS WHALE COAST
LYN MASSEY-HICKS RANDBURG
RORY O’HAGAN & JORGE SANTORO SANDTON
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TOP NON METRO PARTNERSHIP (1st)
TOP METRO AGENT (2nd)
TOP METRO PARTNERSHIP (2nd)
TOP LISTING AGENT/PARTNERSHIP
GRAEME HAMILTON REID RANDBURG
LUZ VAZZANA, NICOLE & NATALIA DIAS BEDFORDVIEW
GREG BISARO & IVAN PARNELL NELSPRUIT
EL
GOLD AWARD
Outstanding Achievement PLATINUM AWARD Bedfordview - Luz Vazzana, Nicole & Natalia Dias Sandton - Rory O’Hagan & Jorge Santoro Whale Coast - Anmar Marais
WWW.CHASEVERITT.CO.ZA
Nelspruit Randburg Randburg Sandton Westrand Westrand Whale Coast
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Ivan Parnell & Greg Bisaro Graeme Hamilton Reid Lyn Massey-Hicks Heleen Nyschens Anette Rautenbach Tracey Everitt Cheryl van Deventer
RENTALS AWARD Polokwane Polokwane Umhlanga Umhlanga Vryburg
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Malissa Bell Sandra van der Merwe Pixie Reardon Tracy Muir Maryke van der Westhuizen
TOP METRO PARTNERSHIP (3rd)
TOP METRO AGENT (3rd)
BRIAN FALCONER & RICHARD MILLER DAINFERN
TRACEY EVERITT WESTRAND
TO
SA
al 17
gala our
TOP METRO OFFICE
TOP ORIGINATION OFFICE, TOP REFERRALS REGISTERED/SENT
TOP NON METRO OFFICE
RANDBURG
NELSPRUIT
TOP RENTAL AGENT (1st)
TOP RENTAL OFFICE
TOP RENTAL LISTING AGENT
TOP RENTAL INCOME TOP RENTAL UNITS
PIXIE REARDON UMHLANGA
UMHLANGA
TOP ORIGINATION AGENT, TOP AGENT REFERRALS REGISTERED
TOP UNITS AGENT
TOP NEW ENTRANT
KEITH SMITH SANDTON
ANETTE RAUTENBACH WESTRAND
KEITH HARRISON BALLITO
OUTSTANDING SERVICE
TOP RENTAL AGENT (2nd)
RYAN CHAPMAN RANDBURG
MELISSA BELL POLOKWANE
TOP NON METRO AGENT (2nd)
TOP METRO AGENT (3rd)
TOP NON METRO PARTNERSHIP (2nd)
TOP NON METRO PARTNERSHIP (3rd)
ELMARIE VAN HUYSSTEEN STELLENBOSCH
CHERYL VAN DEVENTER WHALECOAST
JANKA NIEMAND & ANTOINETTE DU TOIT OUDTSHOORN
SONJA DRY & JOYCE ORTMANN EMPANGENI
to our Top Achievers TOP RENTAL INTERN AGENT (1st) TOP OFFICE PRODUCTIVITY TOP RENTAL AGENT (3rd) SANDRA VAN DER MERWE POLOKWANE
KAROLINE DHOOGE PHALABORWA
TOOLS OF THE TRADE
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GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO HELEN GRANGE
You’re meeting clients at all hours and your schedule is anything but conventional. That means meals tend to be ad hoc. Some helpful kitchen resources to make refuelling easier
WONDERBAG YOU NEED IT BECAUSE The heatinsulated Wonderbag reduces the time you need to spend cooking, leaving you able to prepare for work the next day. THE NITTY GRITTY The Wonderbag is basically a nonelectric, portable slow cooker that cooks your meal for up to 12 hours at a time. It is made with colourful shwe-shwe and lined with a more resistant fabric, and is able to accomodate a pot with a six-litre capacity. There’s a simple toggle to open and close the Wonderbag. THE X-FACTOR It saves energy: food that has been brought to the boil can finish cooking while in the bag. R379; yuppiechef.com
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“Leapfrog is YOU NEED IT BECAUSE The AeroPress combines the infusing properties of a French press with the pressure of an espresso in a light, portable coffee maker. THE NITTY GRITTY All you need to do is place the press on top of a cup, add ground coffee and hot water. The coffee begins to drip into the cup immediately, similar to a traditional filter coffee method. The added pressure forces the rest of the water through the grounds, as with espresso. The AeroPress is able to make one Americano or four espressos. The set includes a plunger, filter holder and 350 micro-filters, a scoop, stirrer and funnel. THE X-FACTOR You can play with the coffee-to-water ratio to produce your perfect brew. It is mobile too. R699; yuppiechef.com
Skoko Sebola Leapfrog Midrand
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AEROPRESS COFFEE MAKER
about ordinary people with a sharp focus on excellence
LG SOLARDOM MICROWAVE YOU NEED IT BECAUSE It’s one of the fastest and most versatile cooking appliances on the market, ideal for making a quick lunch between appointments. The multifunction microwave is three times faster than a conventional oven. THE NITTY GRITTY The SolarDOM combines three cooking options – microwave, grill and convection. For quick results, you can also select the Speed Combi option, which combines all three methods. Energy is concentrated directly onto your food and heat is evenly distributed. THE X-FACTOR This microwave produces healthy, tasty food with the minimum of fuss. It also has a stylish design, perfect for the modern kitchen. R10,499; yuppiechef.com R8,819; takealot.com
IMAGES: SUPPLIED
UBEREATS YOU NEED IT BECAUSE UberEATS, an offshoot of Uber, is a convenient, easy alternative to cooking. Simply have your food delivered by using your phone. THE NITTY GRITTY Download the app, scroll through the list of restaurants close to you (based on your address) and place your order. You can also order online via ubereats.com. The delivery fee is a fixed R20. At the moment, the service is only available in Cape Town and Joburg. THE X-FACTOR Look out for regular promo codes to save R100 off your first delivery. You can also save R50 off your next order – and R50 off a friend’s first order – if you share your unique code with them. ubereats.com
For franchise / agent opportunities call Bruce Swain 082 783 7198 bruce.swain@leapfrog.co.za
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NEWSWORTHY
ONLINE BRAND BUILDING SUNGULA NKABINDE
An effective social media presence can give you a competitive edge, providing a personal element to the property sale. But how do you use it to your advantage?
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op property websites such as Property24 and Private Property are dynamic digital platforms for reaching your potential clients. But, aside from promoting stock on these portals, engaging with buyers and sellers via Facebook and other social media platforms can also be an effective means of building professional relationships. So how do you get it right? The best social media strategy for estate agents is one that involves knowledge sharing and community building, according to Samantha Wright, digital marketing consultant at The Words Agency. This is opposed to merely posting ads or using hard-sell tactics to reach clients online. This strategy allows you to build trust, increase engagement and create a professional reputation. Says Wright: “When the time comes to purchase a property, potential clients will be more likely to come to you before somebody else.”
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NEWSWORTHY
You have to go where your potential customers are Samantha Wright, digital marketing consultant, The Words Agency
INFORMATION SHARING
Facebook users aren’t using the platform to search for property. Instead, it’s used to socialise and potentially follow news sites and other sites of interest. For that reason, Marius Honiball, co-director of Uniprop Real Estate, writes articles on trending topics, posting them on Facebook and LinkedIn. If interest rates go up, for instance, he’ll feature something on how it affects monthly bond repayments. Facebook users are much more interested in informative articles instead of pictures of properties that could be 1,000km away, he says. Not sure what to feature? Well, you know, for instance, that specific questions will come up during the sale process. These may be about transfer fees, occupational rent and levies. How about starting with these common topics? Aside from sharing your own knowledge with followers, you could tap into the expertise of preferred partners such as conveyancers, 16
mortgage originators or community business connections in your network such as Property Professional and Your Neighbourhood. Doing so also allows for the referral process to kick in. Says Wright: “It’s all about understanding your market. A newspaper ad may be more suitable for a pensioner looking to buy in a retirement village. But a young university leader looking for their first property is more likely to spend time on Facebook and Twitter. You have to be on all these platforms. If they don’t know about you, they can’t do business with you.” THE POWER OF COMMUNITY
Cape Town-based agent Matt Mercer created a Facebook group called Hout Bay Organised (HBO) to create word-of-mouth recommendations for anything from painters to doctors. HBO quickly became the largest information resource in the suburb with almost 16,000 members. Through the group, owners have been reunited with lost pets, money has
been raised for good causes in the area and those looking for work have been employed due to referrals – in the process uniting the community. According to Mercer, any social media strategy should focus first on being useful, then on creating an audience to be effective. Says Mercer: “Although the group has never been abused for marketing activities, it has built my brand better than anything else. Direct sales from the group account for 40% of annual sales and listings – and at no marketing cost except for time.” Anthony Stroebel, head of strategy and innovation for Pam Golding Properties, recently utilised the power of online community in his personal capacity on Facebook to raise funds when at least 15,000 residents of Imizamo Yethu in Hout Bay were left homeless after a devastating fire in March. Money is raised via backabuddy.co.za, which is then distributed via non-governmental organisations such as Thula Thula Hout
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NEWSWORTHY
Facebook protocol
B ay. Awa re n e s s o f t h e c a m p a i g n wa s created primarily through Facebook and Instagram, as well as Twitter. “We raised R100,000 in the first 24 hours, then another R200,000 in the next 48 hours,” Stroebel says. After 10 days, that amount increased again to R440,000. “We are humbled by the response to the campaign and grateful that we were able to play a role in alleviating to a degree this tragic situation,” he says.
IMAGES: iSTOCK BY GETTY IMAGES
TO OUTSOURCE OR NOT?
Time is a valuable resource and having a presence on every social media platform may get a bit much. But the good news is you don’t need to. According to Wright, Facebook and LinkedIn are the best platforms when it comes to knowledge sharing, particularly for those in the property industry. “You have to go where your potential customers are,” she says.
But even if you focus on Facebook, you have to make it part of your daily activities. While you can teach yourself social media marketing online, it remains time-consuming, so it’s worthwhile considering hiring someone to do it for you. When finding someone to do your digital marketing, you need to ask the right questions. And they need to ask the right questions, too. If they don’t find out about your desired return on investment – or how you want to use Facebook to generate leads – then you should reconsider hiring them. They need to think about your bottom line: how to sell more houses to make you more money. Concludes Wright, “Social media, in and of itself, is not going to lead to the sale of a house. But what it should do is generate leads for potential customers, whether it’s by building a contact database or having a d i re c t l i n e o f co m mu n i c at i o n w i t h community members.”
BE YOURSELF While it is important to act professionally, it is also important to let your personality shine through. People do business with people they know, like, trust and hear from regularly. START A FACEBOOK BUSINESS PAGE It’s unprofessional to share your personal family photos when operating in a business capacity. Only post property listings some of the time or people will unfollow your posts – follow the 80/20 rule. NEVER POST WHEN YOU’RE ANGRY That also applies to your personal page, not only your business page. Also monitor your page for distasteful posts from others and find solutions in a professional manner where applicable. Remember that politics, religion and sex should be avoided. FIND WAYS TO INTEGRATE FACEBOOK INTO YOUR MARKETING For example, if you’re blogging, create customised posts linking your post to Facebook. POST CONSTANTLY You can’t expect to achieve results with ad hoc posts that are poorly thought out. Make sure you are posting, and engaging, every day as well as responding timeously. EXPAND YOUR NETWORK To increase engagement, get involved with other conversations about property and redirect people to your page for more information. Or invite friends and colleagues to comment on posts.
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CHANGE
AGENTS CATHERINE DAVIS
With the recent publication of the Property Practitioners Bill, transformation is a particularly hot topic in the industry. Eugenia Kula-Ameyaw, chair of the Transformation Committee for the Estate Agents Affairs Board (EAAB), provides input on what can be done to speed up the wheels of change
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COVER STORY
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he president flagged the lack of transformation in the property industry in his State of the Nation address in February. He also portrayed the industry as extremely lucrative. Is this a fair portrayal of residential agent earnings? The concern raised is fair. The government wants to create an enabling environment that creates opportunities for the previously disadvantaged, especially the historically disadvantaged, so that South Africa’s economy reflects the demographics of the country. The property sector is valued at about R7-trillion, of which R3.9-trillion is made up of residential properties. Statistics show that active participation in transactions in this sector remains in the hands of the minority. With so much economic exclusion and unemployment in the country, if this industry becomes inclusive it will have a positive economic impact. As the regulator, we must add that there are agents who are experienced, have resources and operate in upmarket areas of the industry that can be lucrative – hence our resolve to fast-track transformation. The commission-only remuneration structure is often cited as making entry into the industry difficult. Is this true and if so, is it significant? Commission-only can be one barrier, as it takes too long to earn commission. If there is no income during this time, training might not be sustainable. The other side of the coin is trainees who aren’t passing the exams but are earning a stipend. Then, three months later they drop out and pursue learnerships that pay far more than what this industry is paying. The Property Charter has been in operation for a number of years. Is the negative perception about it indicative that it is not being adhered to?
The question is: are industry players happy with an economy that is not inclusive? If the answer is no, then the charter will be their guiding document. Depending on how patriotic or profit-driven (at the expense of the broader societal needs) organisations are, their perceptions about the Property Charter can be selective. The charter derives its model and target from the BBBEE codes, including ownership, management control and skills development. The industry must comply with these transformative initiatives as directed by the government. I believe the reason the new legislation focuses on transformation is because of the slow progress of or non-adherence to the Property Charter. The success of the One Learner – One Estate Agency programme could have contributed to the skills development scorecard target for the industry. With ownership there appears to be only one success story: the RE/MAX deal. The actual impact is still to be realised and measured. But in my view you cannot have one success story in the whole residential property sector. A number of racist incidents in the industry have made the news. Is that indicative of an industry not willing to change or does racism itself cause the lack of transformation? Putting the blame squarely on the industry might not be fair, but it could be an indication of an unwillingness to change. On the other side are consumers who instruct agents to sell to a certain racial group only. So we call on agents not to accept such instructions from consumers, as agents are accountable. Consumers also need to be made aware of what is acceptable. What are the obstacles to transformation in the industry? The commission-only earnings, as mentioned. And the time it takes to train and qualify as an agent. The cost of the actual training has been raised as an issue, especially if we are to realise our objectives of increasing the number of black Africans in the sector. The current legislation, too, is rigid and assumes that one model fits all when it comes to compliance issues. For example, the cost of compliance can be expensive for small and emerging estate agencies.
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COVER STORY
To expect audited financial statements from an agent who sold one house in a township in the same way we expect from established estate agencies is unfair Eugenia Kula-Ameyaw, chair of the Transformation Committee for the EAAB
To expect audited financial statements from an agent who sold one house in a township in the same way we expect from established estate agencies is unfair. Do you have practical suggestions as to how transformation can be effected at a faster rate? The overarching factor is the monitoring and evaluation of transformative interventions – setting fair targets for training and rewarding attraction, for instance. Those who do the right thing must be recognised. Examples include: • An awards category for the transforming agents, which will not only focus on numbers but attraction, retention and impact. • Revisiting the stipend paid to trainees
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and incentivising the mentors or host agencies. • Educating consumers about using their buying power to drive transformation, and to buy from transformed agencies. • Exploring other mechanisms to include the youth and women in other property careers or business opportunities. Which bodies can play a role in promoting transformation? Currently the EAAB or the planned regulator – the Property Practitioners’ Regulatory Authority – will ensure a regulatory framework including transformation. I am delighted to see that the Bill has prioritised transformation. Industry stakeholders have a role to play in transformation, engaging and empowering their members.
It’s transformative and provides an opportunity to be aligned with the democratic South African constitution and other progressive legislation. The Estate Agency Affairs Act only focuses on regulating estate agents, but the Bill seeks to extend that to include all property practitioners. There is also provision to establish an ombudsman office. During the transition into a democratic South Africa there appeared to be more and more legislation that was not aligned with the constitution and the spirit of the country’s legislative framework. The lack of enforcement and capacity to do so has been exploited as a gap by some players. As an industry, we can choose to use the financial muscle to resist, argue and delay transformation or work together as we did with Codesa to find each other and transform this industry. The property industry has potential but how we leverage that to ensure economic growth as we simultaneously transform the sector will be the test for the new legislation.
IMAGES: AUBREY JONSSON
Kula-Ameyaw on the Property Practitioners Bill
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“If you want to go fast, go alone. If you want to go far, go together.” AFRICAN PROVERB
Rebosa invites you to join together in the best interests of the South African real estate industry.
WWW.REBOSA.CO.ZA
FP Rebosa Advert - 07/15 - Prop Prof.indd 1
REBO SA 2015/06/29 2:45 PM
AGENT DEVELOPMENT
What does the data say?
LISTING AN ADDRESS:
YES OR NO?
An address adds 20% to the property’s listing score. Listings with higher scores receive about four times more views. Publishing an address will therefore improve the seller’s chances due to increased exposure. Location, after all, is the most important factor when it comes to property.
Is it safe? Precautions can be taken to minimise risks, such as these: • Advise sellers against direct buyers, since they would not have been vetted by the agency first. • Don’t show security features in photos.
Are other agents more likely to poach sellers? IS IT A GOOD IDEA TO INCLUDE THE ADDRESS OF A PROPERTY ONLINE? PRIVATE PROPERTY PROVIDES THE ANSWERS
What are the advantages? 1
A higher listing score, which translates to more visibility.
2
Fewer queries from potential buyers wanting clarity on the exact location of the property.
3
A better experience for the buyer.
Find more useful training and industry advice on propertyprofessional.co.za – click on Tools of the Trade in the top navbar
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The onus is on the estate agent to avoid this. You can do this by: • Establishing a good relationship with the seller. • Landing a sole mandate by showing your expertise and presenting a complete marketing plan. • Providing a quality listing with excellent photos and descriptions, a video tour and as much information as possible. Even if the mandate is poached, the original listing will be seen first on Private Property.
How should agents build trust? If a seller has given you the mandate to sell their home, chances are they are not comfortable selling their property by themselves. The process tends to be complicated and they will be counting on your expertise. Sellers will also be wary of opening up their home to someone who arrives unannounced at their door for a viewing. Build a good relationship by: • Explaining the benefits of adding the address to the seller. • Making them aware of the potential risks and how to avoid them. • Offering exceptional service so that they are not tempted to give the mandate to a competitor.
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THE FUTURE OF
RETIREMENT G
Accommodation options for retirees are expanding as demand increases. What are some of the trends emerging for the older generation?
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one are the days when a retirement home was simply a series of rooms along a long dark passage. The world of retirement accommodation is evolving, with the appearance of resort options, greater community engagement and investment opportunities for non-retirees. More and better options are becoming available as the retiree population grows and care groups and developers are giving them what they want. According to the Statistics SA Profile of Older Persons in South Africa, 8% of the population is older than 60, but a further 16% is older than 50, which means that within the next 10 years, the retirement population is set to double. Add to this that South Africa is an increasingly popular destination for foreign retirement, especially among high-end luxury retirees, and
GEORGINA GUEDES
it quickly becomes apparent that the retirement accommodation market will grow and evolve in the years to come. GROWING NEED FOR DEMENTIA CARE
As medical science improves, people are living longer and there are more cases of patients with dementia. These patients require care in specialised facilities that respond to their specific needs and anxieties. A leader in this space in South Africa is the Livewell Group, which offers award-winning dementia care in Bryanston, Johannesburg, and Somerset West in the Western Cape. “Dementia care villages are becoming more popular internationally, focusing on making the environment as homely and comfortable as possible,” says Lou-Ann van Heerden,
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SOUTH AFRICAN
an occupational therapist at the Livewell Group. “We have responded to this by adding homely task-orientated groups. Currently we are implementing a new activity group which creates a sense of helpfulness and initiates interaction between the staff and residents.” These activities include gardening with gardeners or taking part in kitchen activities with kitchen staff. Tokai Estate also offers Alzheimer’s and dementia care. Says Ian Gray, Craft of Architecture co-founder and Tokai Estate’s designer: “The healthcare facility has been designed to be as flexible as possible in dividing the space into different care zones. This means that if there is an increase in one kind of specific need such as Alzheimer’s and dementia care, this section can increase in space.” In Holland, the Hogewey Dementia Village has areas designed to seem as if they are from the 1950s, 1970s and 2000s so residents can feel “at home” in the era in which their short-term memories failed them. As a result of these uninstitutionalised facilities, residents require fewer medications, eat better and live longer.
Retirement developments provide some of the best investment and future planning that one could possibly hope for Murray Collins, director, Collins Group
RESORT-STYLE RETIREMENT
Estate living has taken off in South Africa, with high-end developments offering the best in luxury features, bespoke living space design, leading amenities and even internal schools, offices and shopping centres. Because of the expansiveness of these kinds of estates, it is possible for them to offer many different types of accommodation, some of which are retirement villages – no longer separate, but now a part of the estate. Val de Vie Estate marketing director Ryk Neethling says that while some retirement villages are near luxury estates, Val de Vie is developing a large-scale retirement village in the greater residential estate. “Not only will residents of the retirement village have access to their own clubhouse and facilities, but also to the extensive list of amenities at Val de Vie,” he says. These include polo and equestrian facilities, fitness centres, various trails, the Pearl Valley Jack Nicklaus Signature Golf Course and restaurants. Of course, it is not necessary to be integrated into an existing estate for a retirement village
to have ultra-luxury features. Stand-alone developments such as Oasis Retirement Resort in Century City or Tokai Estate offer health spas, gyms, clubhouses and entertainment venues along with beautifully designed residences. Tokai Estate, for instance, offers homeowners five housing layout options and imported European kitchens. Gray says various high-end extra amenities are on offer at The Clubhouse, a communal space designed with a “five-star hotel look and feel”. Another example is the 54ha eco-estate, Monte Christo Retirement Village on the Garden Route close to Mossel Bay. Phase four of De Caravel, within the estate, offers eight threestorey flats with sea views and the resident’s choice of layout and finishes. COST DRIVES AT-HOME CARE OPTIONS
At the Retirement & Lifestyle Expo held in Cape Town in February 2016, it was discussed that the traditional frail care or care centre within
retirement villages would diminish over the next decade, with residents being encouraged to “age in place”. The care services residents may require will be provided in the comfort and privacy of their own homes in their villages. “Because both traditional assisted living and care centres are the more expensive components of a village, villages of the future will have to consider care in all units to prevent the current shortages in care availability from recurring and to be relevant and financially viable,” says Marelize van Rooyen, marketing director at Retirement Villages SA. COMBATTING LONELINESS
There is a growing trend in retirement care for greater integration between retirement villages and their surrounding communities, instead of closing residents behind high walls. The Livewell Group has an award-winning outreach programme that makes sure its dementia patients (who traditionally need a
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Retiree lifestyle ANNE SCHAUFFER AND SUPPLIED
What do retirees look for in property? A survey from Retire KZN provides some answers
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RETIREMENT ACCOMMODATION AS AN INVESTMENT
Murray Collins, a director of the Collins Group, says that the people buying into retirement villages are no longer only the retirees themselves, but investors who want to take advantage of this growth opportunity. The group’s Mount Edgecombe Retirement Village in KwaZulu-Natal offers opportunities to a range of investors, from those who are looking to retire now or later, to those who are simply looking to invest in property. “What few people understand is that some of the better retirement developments are experiencing capital appreciation and rental yields that far exceed traditional residential stock. Retirement developments provide some of the best investment and future planning that one could possibly hope for,” Collins says. At established retirement estates in Umhlanga, for example, certain units have appreciated by more than 200% over a two-year period. Rental income, on a moderately sized three-bedroom unit, fetches from R16,000 up to R20,000 per month, he says. “This makes for an exceptionally strong and stable annuity income once the unit is paid off,” says Collins.
Retirees also want the following: • Almost half of would-be retirees have a desired price point of R1m-R2m. • 44% look for freehold opportunities; 41% look for sectional title; the balance consider life right. • 60% look for a two-bed option, and want garaging and storage. • Garden units dominate demand, preferably freestanding over semi-detached. • Sunny north-facing homes are preferred over sea views.
IMAGES: iSTOCK BY GETTY IMAGES
more secure environment) do not feel isolated inside their care homes. “At Livewell, we use the Eden Alternative as one of our core models of care, thus ensuring that our residents don’t experience loneliness, boredom and helplessness,” says Van Heerden. “Through our Outreach Programme, weekly Livewell residents visit animal shelters, orphanages and other organisations to give back and spend time with the less fortunate, which instils a feeling of giving and meaning.” Livewell also employs companions from the community to spend time with the residents, participating in activities such as shopping, hair appointments, board games, going for coffee and cake or just taking a walk. This is also the thinking behind the integration of facilities at Val de Vie. Says Neethling: “To have family nearby, to know that you are able to support one another in person and to share a secure and laid-back lifestyle – this is what so many people long for and I believe that security and lifestyle estates around the country have taken note of this demand.” Many villages and estates, including the Harfield Retirement Village in Cape Town, also now allow pets for companionship.
Retire KZN is a digital research campaign commissioned by Tongaat Hulett Developments through Rainmaker Marketing. The aim is for retirees to register their interest, needs and desires when it comes to retirement accommodation and lifestyle. The campaign also aims to promote KwaZulu-Natal as the retirement destination of South Africa. To date, there have been 1,700 registrants. But the results also reflect the needs of modern South African retirees in general. Survey results to date defined three main features: • Security • Pet-friendly • A clubhouse
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I N T E R N AT I O N A L
DESTINATION:
EUROPE NICOLA JENVEY
Is European property in a healthy space in 2017? And which cities are topping the safe haven list?
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ermany has emerged as Europe’s new safe haven for capital. Four of the continent’s top five investment cities are in the world’s fourth-largest economy, a new research report has announced. Emerging Trends in Real Estate: Europe 2017 is a joint survey by global auditing firm PricewaterhouseCoopers (PwC) and nonprofit research and education organisation Urban Land Institute. The report provides an outlook on real estate across Europe for 2017 and beyond. Project leader and PwC survey director Gareth Lewis says that while there is a general post-Brexit sentiment towards the UK, investors continue to see value in real estate across many parts of Europe. However, return expectations are being scaled down and the importance of active asset
SUCCESSFUL REAL ESTATE INVESTORS WILL NEED TO TAKE ON MORE OPERATIONAL RISK
15% Strongly agree
23% Neutral
1%
trongly S disagree
FAIR OR OVERVALUED?
The report reveals that there is a fair division between investors believing prime real estate in Europe is fairly priced and those fearing it is overvalued. Despite the mixed views, it also reflects that equity continues flowing into Europe from around the world and from all types of investors. Lewis says the report ranks the real estate markets in major European cities according to their overall investment and development prospects, with Berlin claiming the top position followed by Hamburg, Frankfurt, Dublin and Munich. Despite the political and economic uncertainties – including the impact Brexit will have – the industry was upbeat about most of its major markets. Germany’s domination prompted one panEuropean investor to quip that the country had replaced the UK as Europe’s number one safe haven. NORDIC SAFE HAVENS
Meanwhile Lewis suggests that the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) are emerging as another new safe haven. “Good demographics, growing economies and a high quality of life are making the Nordics a destination for global capital.” While the PwC and Urban Land Institute report is comprehensive, it is not the exclusive view for European property investments. Monarch & Co CEO James Bowling says that in emerging from the economic difficulties that forced a European
TECHNOLOGY IS CHANGING THE WAY WE USE OUR BUILDINGS
29% Strongly agree
15% Disagree
46% Agree
management as a means to access income is being accentuated. Says Lewis, “In this risk-averse climate in which many real estate investors are clearly willing to sacrifice yield for lower risk, Germany is widely regarded as the new haven for capital. What is clear, after taking the pulse of the industry, is that below the surface there are complex and significant influences at play beyond today’s geopolitical issues.”
62% Agree
8% Neutral 1% Disagree
Source: Emerging Trends in Real Estate: Europe 2017
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Top markets for real estate investment and development in 2017 Union (EU) and International Monetary Fund (IMF) bailout in 2011, Portugal’s various structural reform initiatives have revived its property market. Monarch & Co offers residency and citizenship programmes, investment properties and capital investment opportunities in handpicked countries. In seeking long-term growth, he says, the Portuguese government drastically changed its historically pro-tenant leasing market in 2012. This has bolstered the investment market by giving landlords more incentive to invest. The country also launched a residency and citizenship programme that allows non-EU nationals to acquire citizenship in exchange for a minimum €500,000 real estate investment. Bowling says government statistics released late last year reflect the programme has contributed more than €2bn to the economy with €1.89bn being invested into the real estate market. The knock-on effect has been a rise in local and international developers and investors to the Iberian country. Says Bowling: “For investors looking to diversify their portfolios and enjoy the benefits of the European lifestyle, Portugal is undoubtedly a great solution.”
IMAGES: SUPPLIED
WHERE ELSE THEN?
Chas Everitt International Property Group CEO Berry Everitt says while the steep depreciation of the rand since 2011 has made South African luxury property an attractive investment opportunity for foreigners earning dollars, euro or pounds, it has also slashed the value of many local fortunes. This is prompting South African high-networth individuals to seek alternative investment avenues offshore. Wealth Migrate CEO and founder Scott Picken adds that the significantly improved economic climate in the UK has fuelled a major rebound in the performance of commercial property in the past three years, most crucially in regional markets outside London. In partnering with full-service
property investment company Riverside Capital, Wealth Migrate can assist investors seeking these opportunities for a minimum £10,000 investment. Riverside’s primary service is direct property investment and since inception in 2010 it has completed £956m in transactions. BOLD DECISIONS
However, Lewis says “lower” could be the mantra for this year’s Emerging Trends report, now in its 14th year. Lower economic growth, lower rental growth and lower return targets each beat their drums across the pages. More than 66% of respondents believe outperformance on last year will be difficult to achieve with many also expecting volatile property and economic cycles. Lewis says most respondents are hopeful of achieving yields in line with last year, while 45% are aiming for 5-10% and another 24% for 10-15%. THE FUTURE
Lewis acknowledges that the report raises more questions than answers, specifically on whether or not the European industry is prepared to innovate; whether it will be current real estate leaders or new players who meet the challenges; whether it is entering a period of change or if the market is merely redefining what constitutes good real estate. “Our report reveals an industry starting to look beyond traditional boundaries, perhaps realising it does not have all the answers. However, if it is to thrive in a fast-changing and uncertain world, it will need to make bold decisions,” he says. Looking ahead to 2030, Lewis says there are changes altering society and the industry’s view of the future role of the built environment and the property cycle as it affects supply, occupation, ownership and investment. “The European industry is experiencing a seismic shift in its centre of gravity – from real estate as a financial asset to a product and more significantly, to real estate as a service.”
BERLIN The German capital scored top in all four survey categories (investment, development, prospects for rental growth and prospects for capital growth). It has established itself as a large, highly liquid real estate market with global appeal. Despite high prices, office and housing markets are thriving. HAMBURG The city’s success follows local government investment into transport and new high-quality urban districts along the waterfront. A 4% rental growth explains the popularity of its office market. FRANKFURT The city climbed 11 places in the year under review, offering both a stable market post-Brexit and an office destination for bankers relocating from the City of London. DUBLIN Slipping one place to number four, Dublin is still viewed as a Brexit beneficiary. Continued economic growth, foreign direct investment and strong housing demand were key in Dublin’s prospects for 2017. MUNICH Investors perceived Munich “as a perennially solid bet”. Respondents indicated buying property in cities such as Munich allowed investors to assume more risk without worrying about the basic security of their investment.
DUBLIN
HAMBURG BERLIN
FRANKFURT
The European industry is experiencing a seismic shift in its centre of gravity – from real estate as a financial asset to a product and more significantly, to real estate as a service
MUNICH
Gareth Lewis, project leader, PwC
Source: Emerging Trends in Real Estate: Europe 2017
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WITHHOLDING TAX IN PROPERTY TRANSACTIONS TOO? This year’s budget speech increased the dividend withholding tax rate with immediate effect and the sudden increase elicited much comment and (almost) muted the response to the raise in the percentage withholding tax in property transactions. That is not to say that it is not notable.
prevent possible tax evasion on the side of non-residents who, from a SARS perspective, might leave South Africa after the sale of their property before all their tax affairs have been attended to. This tax then serves as an advance payment towards the non-resident seller’s final income tax liability to SARS.
Withholding tax in a property transaction refers to the amount that a buyer must subtract from the purchase price payable to a non-resident seller and pay to SARS, on behalf of the seller. This mechanism in the Income Tax Act assists SARS to
In terms of the new figures, the nonresident individual will now be liable for 7.5% of the value of the sale of the property, up from the previous 5%. For non-resident companies the percentage is 10% and for non-resident
trusts it is 15%. Non Resident Individuals can (in certain circumstances) reduce this percentage by applying for a Tax Directive. STBB I Smith Tabata Buchanan Boyes is the benchmark property law firm and will ensure a smooth sailing transaction, whatever the complexity. Contact us on www.stbb.co.za for assistance in the transfer of your property.
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MORE THAN JUST THE PAPER WORK
TO P T I P S
5
BRUCE SWAIN
Off-plan properties allow buyers to select the size, style and finishes of their new home. This option is also especially attractive to first-time buyers as there’s no transfer duty: most people struggle to save for a deposit and it’s considerably more affordable without the additional cost. But, as with any property purchase, buyers need to do their homework about the developer and builder, and read the fine print. It is possible to buy a lemon – albeit a new one.
1 ESTABLISH THE
DEVELOPER’S REPUTATION
Buyers should look at the developer’s track record. Has the company successfully completed previous projects? Have they done so in a timely fashion? Is the developer and the builder the same person or company? If not, then look into the builder’s work as well. Buyers are advised to establish whether developers are registered with either Master Builders South Africa or the National Home Builders Registration Council.
2 INSPECT THE DEMO MODEL
Have a look at a demo unit. Artistic renders and sketches don’t necessarily translate into real life. Spending time going through a model property will allow buyers to understand the quality of the workmanship and materials.
3 STAY ON TOP OF THE BUILDING PROCESS
Enquire about materials as they may differ from the demo model in some respects. In addition, the majority of building agreements will allow the developer to deviate from the plans by 5% to 10% without having to consult the buyer. If buyers don’t stay on top of the process, they could find themselves with a property that’s different to their specifications. Buyers also need to check the building contract carefully to see exactly what materials and fittings are included in the specifications and what would be regarded as extras, which will cost more. Communal facilities need to be clearly identified as well as rules and costs regarding pets, landscaping and security.
4 READ THE FINE PRINT
When purchasing a stand in a sectional title or estate development, the standard contract states that the landowner needs to build their property within a stipulated period, according to Smith Tabata Buchanan Boyes. Failing this, the homeowners’ association may impose a penalty. This ensures that the development reaches its investment value within anticipated time frames and safeguards other owners from the implications of continuous building operations. The period generally ranges from one to five years.
Have a look at a demo unit. Artistic renders and sketches don’t necessarily translate into real life
5 UNDERSTAND OCCUPATION DATES
The contract needs to include a date by which buyers can move into the property. The buyer will be entitled to cancel the contract should the home not be ready in time. In this instance, the buyer will be reimbursed for money spent up until that point, including the deposit and progress payments made to the builder.
Bruce Swain is the CEO of Leapfrog Property Group and has more than 28 years’ experience in the industry. Swain worked as the RE/MAX regional director for Southern Africa before co-founding Leapfrog in 2007, where he served as MD until taking over the CEO position in March.
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IMAGE: SUPPLIED
things agents wish clients knew about buying off plan
Buying a property off plan may be an attractive option, but there are also potential drawbacks. Before making a decision, buyers should take these pointers into account
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LIFE HACKS JONATHAN ACUTT
S
outh Africa has two main types of property purchasers: the end user buying a home and the investor who buys to let. Both seek to maximise their return on investment. The only difference is their approach. Homeowners are typically emotional, buying a property they love based on affordability and proximity to schools. Investors pragmatically follow their own investment model. The question in both cases is the best time to buy or sell. Someone once told me that you do not make money when you sell but when you buy. The implication is regarding the cyclical nature of real estate and that accurately choosing the right time to buy maximises or minimises the profits. The property cycle has four stages: recovery, expansion, hypersupply and recession. Both sellers and purchasers can use this to their advantage if they understand which cycle the market is currently in and anticipate where the market is going. Maximising a return demands an understanding of those cycles and their affect on values, and the realisation that property is a long-term investment. To elaborate, prized suburbs such as Umhlanga, Durban North, Sandton or Camps Bay may have a surplus of buyers and low stock, triggering overinflated prices and a seller’s market, while neighbouring suburbs may experience the opposite.
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For example, property in affluent areas of Durban could expect growth of 6% to 10% in the next year compared to affluent areas of Cape Town such as the V&A Waterfront and Camps Bay, which could expect price increases from 10% to 15%. Camps Bay breaks records for the highest value of property sold in South Africa. A market in recovery would have an oversupply of buyers looking to purchase property, signalling high demand (a seller’s market). When more sellers realise that prices have increased, there is a further influx of properties, triggering the expansion phase. Typically there are the same amount of buyers as sellers. Once the market is flooded with properties, the market goes into hypersupply phase. Overinflated prices force buyers to sit back. In the final cycle – recession – prices begin to drop. To maximise profits, the ideal phase to purchase property would be at the end of the recession cycle, maximising lower market values. The ideal phase to sell would be the end of the expansion phase. Investors also should not buy and sell in the same cycle as there normally wouldn’t be sufficient capital growth to cover expenses. Homeowners in Gauteng, where the trend in residential property prices is flatlining, should focus instead on growing capital. That said, there are great property deals throughout the cycle.
BUYERS SHOULD
• Recognise that greater research yields better informed decisions • Have an appropriate investment model based on affordability, interest and growth expectations • Understand suitable property investments • Be financially prepared for opportunities • Have a committed investor mindset • Use reputable companies.
SELLERS SHOULD
• Compare their property to prices achieved by comparable neighbourhood homes • Know the first offer is normally the best one • Decline early occupation as it often ends badly • Know that overpricing is why 90% of homes don’t sell within the prescribed period • Provide the correct house plans upfront • Recognise the value of building inspectors to identify problems before putting a house on the market.
Acutts Group MD Jonathan Acutt is the sixth generation to head this family-owned national company. Previously he was an Institute of Estate Agents Durban and Coastal chairman and a national board director for the Institute of Estate Agents.
IMAGE: SUPPLIED
Buy or sell?
Real estate moves through a cycle of recovery, expansion, hypersupply and recession. How can you use this to your advantage?
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hising opportu with a difference! As one of the longest running, truly South African property brands, Huizemark understands how to keep the real-estate business simple and profitable. Exclusive territories./ Flexible operating options ./ Freedom to develop your own management style,/
Easy operating systems./ Exceptional web-based training./ Unsurpassed fanchisor support,/
Become part of our vibrant and innovative team of professionals and experience a fresh approach to real estate.
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contact Adrie Barnard tel 011 789 4448 cell 084 081 3747 franchising@huizemark.com www.huizemark.com
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you're home
2 bed 1 bath
R14 000 GREEN POINT
SEA VIEW PR OPER T IES
Hi Christine, I’m interested in renting the 2 bed in Green Point
Great Matt, let’s organise a time for you to view it.
South Africa’s favourite property website. A home for everyone www.privateproperty.co.za