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I IIssue: August
2006 I Editor: Berry Everitt I |
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Your Area Specialist:
Chas Everitt International
sales agents have all the latest market information
regarding local property values at their fingertips
– and are committed to the highest standards of
personal service when it comes to selling your home.
In addition, the Chas Everitt International Property
Group offers you, the homeowner, the best possible exposure
for your property in both national and international
markets. So if you are thinking of selling your home,
call your nearest Chas Everitt International office
today for the name of your local area specialist - or
visit www.chaseveritt.com
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Every month the Property
Signpost Newsletter will be issued to all our
subscribers, filled with real estate information to
help you make an informed decision, whether you are
buying or selling a property.
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Contents
1. Welcome
By Publisher
2. Why we
need more affordable housing
3. What
women want will shape new communities
4. Get connected
to sell faster
5. Renovate
and resell plans now more risky
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1.
Welcome By Publisher
Spring is in the air, and with it
the prospect of the annual inflow of foreign visitors
and investors as the cold descends on the Northern
Hemisphere. Recent events have also brought another
sort of chill to that part of the world – and refocused
attention on SA as a “safe haven” in a world increasingly
threatened by political violence.
This may be difficult for us to understand, given
our concerns about crime and corruption, but one just
needs to see how little British and European buyers
are able to get for their money to grasp that SA property
is also still extremely well priced in comparative
terms. Add to that our wonderful climate and a still-favourable
exchange rate for British and European investors and
you have a property-plus-lifestyle offering quite
enticing enough to prompt permanent relocation, let
alone the holiday-home buying that is already a feature
of our market.
Which is why one reason why we continue to believe
participation in overseas property exhibitions is
an important element of our marketing mix – and why
we will shortly be embarking on our annual marketing
tour to the UK and Europe. Among others, this will
take in the Homes Overseas exhibition at Earls Court
in September and the Second Home International show
in Utrecht in October, where we will showcase not
only the cream of SA property but the undoubted attractions
of our lifestyle to tens of thousands of Londoners
and Hollanders for whom summer is always too short.
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2.
Why we need
more affordable housing
Families are getting smaller, but new homes seem
to be getting bigger and bigger and more luxurious
which, contrary to what many people think, is a bad
sign for the housing market. The major reason for
the trend is that the cost of land and development
is so great that developers seek to achieve the best
possible return per unit – by building them bigger
and putting in more expensive finishes in their pursuit
of a limited number of wealthy buyers.
And indeed there is currently little profit incentive
for the development of affordable housing, which is
often further discouraged by local building restrictions
or rezoning red tape. However, for home values to
keep rising, demand has to keep exceeding supply,
and to achieve that one has to enlarge the pool of
people not only keen to buy but financially qualified
to do so – which means there simply have to be more
affordable homes.
Such homes will, in time, appreciate in value, enabling
owners to build equity and increase their personal
wealth and buying power, as well as their ability
to scale the property ladder and sustain the demand
for those bigger and more expensive homes.
So, apart from sound humanitarian reasons for wanting
to see more homes created that are affordable for
people at the lower end of the economic scale, this
approach would help secure the future of our property
market.
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3.
What women
want will shape new communities
Marketers have known for a long time
that women are the ones who make most of the spending
decisions, which is why they tailor most of their advertising
to appeal to women.
And with more women becoming homebuyers themselves,
now would be a good time for housing developers to take
a leaf out of the same book and position their developments
to fit in with what the new generation of women really
want in a home.
Recent research in the US has shown, for example, that
women who work outside the home are keen to live in
communities that emphasise and facilitate social interaction
and convenience.
Thus it is not surprising that they rate a friendly
neighbourhood with good shops, parks and public transport
and proximity to work as actually more important than
home price. Women also place a high premium on a safe
environment, good housing design and easy access to
services and family-oriented recreational amenities.
Other woman-friendly trends include housing clusters
with built-in child-care features, secure maintenance
and service providers to accommodate two-income families,
shared housing for single people and teen-friendly environments.
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4.
Get connected
to sell faster
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A decade or so ago a great play area in the backyard
was an important selling point for family homes, but
times have changed and today’s youngsters are far
more likely to play games on the internet than to
swing around on a jungle gym – just as they are more
likely to research homework projects on the web rather
than go to the local library.
Indeed, many children’s rooms now look like media
centres, fitted with computers with broadband access,
television sets, video game systems and DVD players.
And while parents may have their own views about children’s
use of and access to all this technology, there is
no doubt that connectivity, and especially broadband
that allows Internet access around the clock, is becoming
a new selling point for homeowners who are targeting
buyers with young families.
Sellers and developers in this market should thus
consider rearranging or redesigning children’s rooms
to accommodate a range of gadgets or perhaps transforming
a study or workstation into a high-tech hub of connectivity.
Which is not to say that the backyard can or should
be given over to weeds. Parents concerned at the rising
rate of obesity among techno-potato children are bound
to appreciate a healthy combination of connectivity
indoors and space for more strenuous exercise outdoors.
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5. Renovate
and resell plans now more risky
Buying up older homes
with an eye to renovating and reselling became very
popular in recent years as house prices rose rapidly,
but such buyers should be very wary of over-capitalising
now that rising interest rates have put a dampener on
house price growth.
The same holds true, of course, for owners who are thinking
of upgrading their existing homes. To over-capitalise
simply means spending more money on renovation than
can be recouped on resale of the property at a later
date, and it depends primarily on position.
For instance, a modest home converted into a mansion
will be difficult to sell at a high enough price to
recoup expenses if the suburb as a whole generally only
attracts buyers on a limited budget.
The prime rule for sensible renovation is to determine
with the help of a knowledgeable agent the current top
values of homes in the area and then compare these to
the value of the home to be renovated.
The difference in value is the maximum sum that can
safely be spent on renovations, although it might be
prudent to keep a margin of, say, 10 percent. In other
words, if the market value of your home is, say, R500
000 and top prices in the area are around R600 000,
you should think carefully before spending more than
R90 000 on renovations.
And before embarking on any renovations at all, you
really should have the property checked by professionals
to make sure it is structurally sound.
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