What’s happening in the Johannesburg middle priced property sector?

middle-priced-johannesburg-propertyTo gauge current trends and movements, we posed a few pointed questions to a selection of Chas Everitt Brokers and Managers from areas in and around greater Johannesburg to gauge what their feelings where on the market, and particularly the Johannesburg middle priced property segment at present.

What’s the overall performance like in the so called “middle segment” of the property market in Johannesburg?

Dave Pride, Manager of the flagship Chas Everitt Randburg franchise noted “The middle segment of the residential Johannesburg property market (which we take as being homes priced between R500 000 and R2,5 million) is currently performing very well and has enabled many of our Johannesburg franchises to achieve record sales numbers in recent months.

Correctly-priced properties are now often selling within two weeks, which means that agents have to work much faster now to replace stock. We are also getting big turnouts and multiple offers and show days. One home recently put on show in Randpark Ridge, for example, drew 75 couples and five competing offers within hours.”

Diane Cross from Chas Everitt Edenvale and Bedfordview also commented: “One worrying aspect of the current rush to buy, however, is that there are lots of offers being made “subject to” the sale of the buyer’s existing property – and before those buyers have really done their homework on prices. Then if they can’t sell for what they expect, there is disappointment all round. Consequently we would advise that it is still much better to sell an existing property before you consider buying another.”

Which middle segment suburbs in the region are showing strong performance when you consider demand and home price growth?

Some of the highest demand suburbs in the Randburg/Roodepoort/Johannesburg region currently are the likes of Randpark Ridge, Sundowner, Northcliff, Bromhof, Northwold, Fairlands, Blairgowrie, Linden, Northriding, Boskruin and the Eagle Canyon Golf Estate according to Estrelita du Pisani from the Chas Everitt Randburg operation.

Jacques Bronkhorst from Chas Everitt’s Glenvista franchise added “From a Johannesburg property perspective there is also high demand in the New South in suburbs such as Glenvista, Bassonia and Mulbarton.

However, it is important to note that while high numbers of sales are driving prices up across the board, the rate of growth is not likely to hit the heady heights reached during the last boom because buyers are extremely value-conscious and because the banks are still very conservative when valuing properties on which they are being asked to grant bonds.”

 What is it about these suburbs that cause them to be attractive to prospective property buyers?

“The perceived higher security in some of them because they are boomed or limited access areas, the presence of excellent public and private schools, easy access to the freeway system and convenient shopping malls” was the feeling from Werner Van Schalkwyk who operates in the popular Ruimsig area.

 In terms of the types of properties, which are the most in demand or popular for the middle income sector?

“Sectional title apartments and townhouses as well as clusters and family homes are the most popular with buy-to-live purchasers. We are also seeing a rise, though, in investment or buy-to-let purchasing, and these buyers tend to prefer sectional title units”, was the feedback received from Owner Broker Phiwe Myeza from Chas Everitt Midrand.

How does the middle priced segment comapre when bench marked against the lower and higher segments?

When comparing the middle segment with the upper segment (homes priced at more than R3 million), the latter is not as active for two reasons.

“The first is affordability, of course, because there just are fewer buyers in that segment, and the second is that sellers in that category are generally not in a hurry to sell and are often not really negotiable on price” says Steven Roberts from Chas Everitt Sandton.

“Having said that, though, there is a great deal more activity now in the upper segment than there was five years ago, just as there is higher demand at the lower end of the market” he added.

 How would you profile the mid priced buyers in terms of income bracket and their property needs?

Estelle Marais who heads up the Chas Everitt franchise for the Roodepoort and Krugersdorp regions had this to say; “By far the majority of buyers in the middle segment are salaried people, because the banks are still extremely reluctant to give bonds to self-employed people, no matter what their income. We find that most buyers at present are aged between 30 and 50, and they can earn anything from around R20 000 a month to about R80 000.”

 How does the middle priced segment handle the financing of the property?

“We are seeing some cash deals and some 100% bonds but generally purchases are still being financed with home loans and deposits of between 10 and 20%” says Ronell van Niekerk from Alberton.

“Investors, we find, are also accessing equity from their existing homes to use as deposits to acquire buy-to-let units.”

In terms of the overall recovery of the market post the financial crisis, how would you assess the recovery of the middle segment relative to other segments?

The higher segment appears to have recovered faster as buyers saw opportunities to upgrade at massive discounts, but there is now much more activity in the middle segment or “backbone” of the market, while the lower segment appears to be feeling the effects now of the rising costs that put household incomes under severe pressure noted Andre Van Der Merwe, Principal of the Chas Everitt Benoni franchise.

 What is the outlook for this sector going forward?

“Excellent, we would say, with the demand for home ownership rising steadily alongside the rapid increase in the number of middle class South Africans. This number has more than doubled from 1,7 million adults to 4,2 million in the past eight years and there is also a growing appreciation of the benefits of buying a home as opposed to renting concluded Chas Everitt’s Group MD, Berry Everitt.

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What buyers should ask at show days

show-daysShow days can tell you a lot more about a property than just its layout or perhaps the condition of its roof – provided you ask the right questions.

So says Berry Everitt, MD of the Chas Everitt International property group, who believes prospective buyers should not be afraid to ask, for example, whether the agent has already had any offers on the property that the seller has rejected.

“The answer to that question should give you a good idea of how other people have responded to the property and whether the seller is willing to negotiate. And that should help you to decide if you’re really interested in buying this property and if so, how to frame an offer that the seller is likely to accept.”

But before you do that, he says, you should also ask how long the property has been on the market. If it is getting a little “tired”, the seller might be open to a lower offer. Alternatively he or she might be holding out for an unrealistic price, in which case you should probably just move on to your next prospect.

Prospective buyers attending show days should also ask, Everitt says, why the current owners of the property are selling. “The agent showing the house might not want to discuss this, but on the other hand the sellers might not mind you knowing that they are urgently relocating to another city for work, or that they are a bit uncertain about when their new home will be ready and would appreciate some flexibility around occupation dates.

“And again, any information that you can glean will help you decide whether to make an offer and what terms might make it more acceptable to the seller.”

However, he notes, it’s no use making an offer if the bank is unlikely to find sufficient value in the property to approve a bond at the price being asked.

“This, too, is information that you can request on a show day. You can ask to see a comparative market analysis (CMA) showing the price and other details of similar homes recently sold in the same area, which is what the bank will also use as the basis for assessing the ‘market value’ of the property.

“If the agent does not have a CMA immediately available, he or she should be willing to get one to you within a day or two after the show day – along with the other documentation you should ask to see before you make an offer.

“This includes any certificates of compliance applicable to the property (electrical,plumbing and gas are now standard), the conduct rules and the current financial statements if the property is in a sectional title complex or estate, the latest account from the local authority showing that rates and utility payments are up to date, and preferably, a copy of the title deed so you can check that there are no awkward servitudes or restrictions applicable to the property.”

Then finally, Everitt says, you should use show days as an opportunity to gather whatever information you can about the area, its community and any crime fighting initiatives, and its schools, shops and public transport – “bearing in mind that location is just as important, if not more so, than the state of the property you came to see”.

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Double check the rates clearance certificate

property-rates-clearance-certificateIf you’re a home buyer currently, it’s important to make absolutely sure now that the seller has paid off every last cent that might have been owed to the municipality before you take transfer of the property says Berry Everitt of the Chas Everitt Property Group.

Previously, you might have assumed that this aspect of the transaction would have been taken care of by the fact that the local authority has to issue a rates clearance certificate – which states that all rates and service charges owing on the property have been paid in full – before transfer can take place.

Now, however, things are not so certain, because an Appeal Court decision taken last year means that municipalities have to issue a rates clearance certificate to facilitate transfers even if sellers have only paid all the amounts due for the two years prior to the sale of a property.

In other words, there could still be large amounts outstanding for the years prior to that time period, and there is now a possibility, albeit slight, that you as the new property owner could become liable for these debts once you take transfer. So don’t rely on the rates clearance certificate; rather ask the seller directly for proof that all municipal debts have been settled.

* Meanwhile, if you are a property seller, don’t forget to give your bank 90 days’ notice of your intention to cancel your bond – or you could have to pay a hefty penalty equal to several months’ bond interest, which could be put to far better use to reduce your new home loan.

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Massive support for new property team in Jeffreys Bay

jeffreys-bay-rentals-sales-officeThe new Chas Everitt International team in Jeffreys Bay has really taken the local property market by storm!

“We opened a new office in Fountains Mall in December with just one agent in attendance,” says local Chas Everitt International franchise owner Brendon Lahana “but the response to the brand was so positive that we immediately had to start expanding to meet the demand from Jeffreys Bay property sellers and people urgently looking for both holiday and long-term rental properties.

“Indeed, we now have a whole team of people in place, and are urgently looking for more experienced and qualified estate agents to join the branch.”

The Fountains Mall team consists of manager and master agent Tracy de Jager; Jeffreys Bay rental and sales agent Lynette Havenga, who also works in Humansdorp; specialist agricultural sales agent Deon Taljaard, administrator Melody MacBride and marketer Sian Hamilton-Browne.

“At the moment,” says Brendon, “we are also on a campaign to get more landlords in Jeffreys Bay to list their rental properties with us as we have so many qualified tenants searching for accommodation in and around J-Bay.”

There is also growing demand from buyers for property in Jeffreys Bay, he says, and in St Francis, where he is based, having converted his top local agency Bay Estates to the Chas Everitt International brand late last year.

“We have been delighted with the change,” he says. “The group not only shares our long-standing vision and core values but is also dedicated to ongoing agent training and support, which enables us to attract the best estate agents in both sales and rentals to join our teams.

“The brand recognition is also very strong – as illustrated by the response we have had in Jeffreys Bay – while the group’s advanced use of business technology and online marketing platforms helps us to provide our clients with fabulous service, including the ability to give sellers’ properties the widest possible exposure to potential buyers nationally and internationally.”

jeffreys-bay-property

For more info contact Brendon Lahana on 084 637 2357 or email brendonl@everitt.co.za

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Very last stands at Goose Valley Golf Estate go on sale

goose-valley-golf-estateThe Goose Valley Golf Estate, with its Gary Player signature course, is one of the most sought-after addresses on the Cape’s famous Garden Route, and a favourite choice for both local and overseas property investors.

And now the last parcel of land suitable for development within this estate has finally been released to the market, giving buyers the opportunity to acquire one of just 22 large stands on which to build the home of their dreams.

Situated in beautiful Plettenberg Bay, the Goose Valley Golf Estate is a longstanding and highly successful lifestyle estate that already encompasses three fully-fledged residential developments around the golf course, including a 272-unit sectional title scheme and the Turtle Creek and Fairway Close freehold housing developments.

“There are, however, always enquiries about stands here as well as built homes,” says John Fuller of marketing agency Chas Everitt International Plettenberg Bay, “and we are very proud to have been given the exclusive mandate to market the stands in Lynnwood Estate, which will no doubt be the final development to take place in Goose Valley.”

These stands range in size from 1278 square metres to 1583 square metres and are priced from R1,1 million to R1,3 million, VAT inclusive. Home design guidelines and advice are being provided by controlling architects Starkey Olivier, who are also the estate architects at Simola and Pezula in Knysna and at The Links in St Francis Bay.

The land just released for Lynnwood Estate, Fuller notes, is situated right in the middle of the golf course, and in deference to its environmental sensitivity, 40% of it will be retained as green belt areas, which will add to the space and privacy that the residents will enjoy.

They will, however, have access to Goose Valley Golf Estate’s full range of sporting and leisure facilities and the benefit of its excellent security provisions. Membership of the Goose Valley Golf Club will be available and there are also golf practice facilities, tennis and squash courts, walking/jogging and cycling trails, and swimming, boating and fishing facilities. The clubhouse has a pro-shop and a restaurant, and the estate is only about 2 kilometres from the centre of Plettenberg Bay and the Market Square shopping mall.

The security provisions include electrified perimeter fencing with embedded underground steel grids, infra-red and thermal imaging cameras every 80 metres, a guarded entrance with security control room, and 24-hour foot and motor security patrols.

“But above all,” says Fuller, “investors in Lynnwood Estate will enjoy a substantial advantage in that they are buying within a proven, highly successful and desirable estate without any of the normal risks associated with such new developments. And, because the Goose Valley Golf Estate is also without doubt Plettenberg Bay’s most popular holiday destination, those who wish to will also be able to derive an excellent income from their properties.”

FOR MORE INFO CONTACT JOHN FULLER | 082 905 1516 | johnf@everitt.co.za

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