August 2009
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Western Cape:
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Pam Golding Properties’ MD for the Western Cape Metro region, Laurie Wener
Talk of a Turn
Whilst talk of a turn in the property market is premature, there are certainly signs of growing positive sentiment which bode well for the future. So says Pam Golding Properties’ MD for the Western Cape Metro region, Laurie Wener, who has voiced cautious optimism about the road ahead for the property sector.

“A number of recent statistics and events are suggesting that an upswing should begin in the not-too-distant future – although we believe the degree will be regulated by the availability of mortgage loans,” she says.

Western Cape Better Off
A recent study by Sake24/BoE Private Clients pointed to the fact that the economic slowdown in the Western Cape has been less significant than in other provinces.

The provincial barometer headed by renowned economist Mike Schussler indicated that levels of economic growth had dropped off by around 7.3% in this province in the period from February 2008 to February 2009 – that’s less than half the 15.8% decline seen in Gauteng.

The slower impact of the downturn was attributed to, amongst others, the province’s diverse economy, which is not too heavily reliant on any one industry.

This modern home in Bantry Bay is on the market at R45mil. It offers six bedrooms and magnificent views of Table Bay and Robben Island.
Seasonality Plays a Role
On the other hand, the most recent FNB Residential Property Barometer indicated that the Cape Metro market showed a decline in activity levels in the second quarter of the year.

But, says Wener, one has to consider that seasonality plays a key role in this region. “The Cape Town market is always at its quietest in winter,” she says, “and we believe that this barometer simply reflects that fact.

Cash Buyers in Middle Market

Whilst there has certainly been no major upswing in activity levels, sales are still ticking over steadily. We are seeing particular interest from cash buyers in the price range from R1million to R2million, and continue to achieve good sales in this bracket, a good proportion of which constitute long-term investors.”
Surge in Excitement
“Sentiment has also definitely improved,” she continues. “This is partly due to the recent interest rate reductions easing the debt burden on consumers, and also as a result of us putting the election peacefully behind us and adjusting to the new administration.

There is now a definite surge in excitement and positive feeling as the 2010 World Cup year comes into focus.

New Seven Wonders of Nature List

Events such as the recent IPL cricket, the Confederations Cup, and Table Mountain’s making the shortlist for the New Seven Wonders of Nature, have all attracted international interest and recognition, placing the spotlight on our outstanding scenic beauty as well as the fact that Cape Town is a global cosmopolitan city with outstanding lifestyle opportunities.

This helps reinforce positive sentiment about our value as an investment destination, and confirms us as the city of choice for foreign buyers wanting a foothold in South Africa.”

Conservative Buy-to-Let Activity
What has all of this meant for activity levels in the local property market? Wener says there has been an increase in conservative investor activity, with some cash buyers taking advantage of the softer prices to purchase properties at under R2million, which they then rent out.

“This activity tends to be restricted to areas with a proven track record of capital growth,” she says. “Middle market buyers in the R2.5million to R6million price bracket have been most severely affected by our banks’ current strict lending conditions, as they tend to be highly-mortgage dependent and are therefore most affected by the shortage of loans.

Top End Interest
However in the top end brackets of R12million to R15million this is less of an issue, and we are seeing steady interest from buyers looking for good properties and good deals.

At the very top end, R15million and over, there is still a small but steady stream of buyers with cash who are driven mainly by the desire to find the perfect property to suit their own individual lifestyle, and who are prepared to pay top dollar for it.”

However, Wener comments that value for money has become a key factor in buyers’ purchasing decision, across all other price brackets.

Sellers Serious About Selling
Wener adds that sellers have generally begun adjusting their expectations of pricing in the current market, realising that the market is consumer-driven. “Sellers always have differing reasons for parting with their properties,” she says.

“In the current market climate, buyers can reasonably assume that sellers who place their homes on the market at this point, are serious about selling, and are not just testing the waters. The exception here is the top-end properties, which are more resistant to general economic conditions.”

Where to now?
Where to now for property in the Western Cape metro? Wener remains confident that a turnaround in market conditions is on the horizon - albeit a somewhat distant horizon. “Until the financial institutions ease up substantially on their lending policies, we can be sure that general activity levels will not show any significant increase,” she says.

“Although the decrease in interest rates has improved sentiment, it has no practical benefit for would-be home-owners until such time as loans are more readily available.

Chicken-and-Egg Scenario
Unfortunately it’s a bit of a chicken-and-egg scenario, as banks are unlikely to alter their lending policies until activity levels and values increase, but this won’t happen until more mortgage finance is available.

In the long run, though, we remain confident that buyers will continue to see property as a secure and valuable long-term investment vehicle – and that they will continue to seek out the outstanding lifestyle on offer in the Western Cape metro region.”
For more information, contact Laurie Wener on +27 (0) 21 673 4200 or Email her here

In the current market should one buy a residential property or rent?

Claremont R3.15m to purchase
Western Cape - Laurie Wener, MD of Pam Golding Properties (PGP) in the Western Cape's Cape Town metropolitan areas

Laurie Wener, MD of Pam Golding Properties (PGP) in the Western Cape's Cape Town metropolitan areas points out: "It's essentially a question of one's own financial situation and requirements rather than a case of one versus the other.

If you can afford it then it is preferable to purchase your own home as this has always proven to be a sound medium to long term investment, and remains so.

This is despite the fact that there may be some dips in the capital growth of the property along the way, depending on economic trends. At present interest rates are relatively low and there are some good buys to be had.

As one cannot be entirely sure when the market reaches the lowest point, if you are in the market to buy and have the finance available then now is a very good time," she says.

Gauteng - Ronald Ennik, Pam Golding Properties (PGP) MD for the Gauteng region

Ronald Ennik, PGP's MD for the Gauteng region concurs: "Even if the market has not quite reached its lowest point this is still an excellent time to buy because you will be benefiting from reduced prices, which have been discounted by approximately 20%.

Buyers realise that with the lower interest rates they can afford to take up such opportunities and as a result we are seeing increased attendance at show days.

It is a fact that if you wait to try to catch the very bottom of the market you will most likely miss out - so right now for serious buyers it's more a question of deciding whether the property is suitable for your own personal accommodation needs and on your affordability and ready finance.

Research properties and prices in the area that is of interest - ask plenty of questions and find out by how much asking prices have reduced."

Ennik says if you want to buy a home but think you should rent first and then buy, unfortunately the chances are that you may miss the best buying opportunity by being committed to a six month or one year rental.

"When prices are down as is currently the case, it's relevant to compare what you would be paying in rental with the monthly repayments of a home loan.

Sandhurst can be rented at R70 000 per month.

With reduced prices and lower interest rates, coupled with the fact that you would own the property, it's undoubtedly better to buy as the repayments of the home loan should compare favourably with the monthly rental of such a property.

An additional factor is that you would immediately be able to start enjoying all the lifestyle and other benefits of owning your own home – even if it really only starts to appreciate in value in six months to a year from an investment perspective," says Ennik.

Cape Town - Dexter Leite, Rental Manager for Pam Golding Properties in the Cape Town metro areas

From a tenant's perspective there are various reasons why one may choose to rent as opposed to buy, and not related to affordability, says Dexter Leite, rental manager for PGP in the Cape Town metropolitan areas.

"Many people want the flexibility that renting offers, i.e. only being 'locked into' a property for a relatively short period of time. In addition, it's easier to extricate oneself from a lease and relocate - than having to sell before one can relocate. This makes the rental option ideal for contract workers hailing nationally or internationally.

"Many expatriates have been out of the country for an extended period and during their time away, their specific needs may have changed considerably e.g. financial status, marital status or place of employment.

They may also find that the South African cities they lived in previously have changed substantially with new infrastructure affecting commuting options, or new business hubs being developed where they may wish to work.

For these returning expats it can be beneficial to first rent for a term while they assess what their new requirements are, consider different suburbs where they may wish to settle and gain a feel for commuting times etc. Renting affords them the flexibility to make such decisions without pressure."

Leite says renting is also a good longer-term option for those who may be returning to the country but unsure regarding what they are going to do or where they are going to work.

For example, if there is a possibility that your career path may take you to another city, then it makes sense to first rent until you have a clearer idea of where you are going to settle. This also applies to those relocating to different cities within South Africa's borders.

For the owner or landlord the benefits are having an asset that appreciates over the medium to long term. The cost of the investment can be leveraged, enabling a larger investment with only a deposit required.

With good buys currently available, as stated, it is of course essential to do one's sums taking into account all costs, type of property in demand in a specific area, vacancies and so on," says Leite.

Boland and Overberg - Annien Borg, MD of Pam Golding Properties Boland and Overberg regions

In conclusion Annien Borg, MD of PGP's Boland and Overberg regions comments: "Whether you rent or buy is definitely related to your current financial situation and how long you intend staying in the specific town or city.

At present obtaining finance is a problem and one which has affected the entry of first time buyers in the market – for whom rental would now be the best option. However if you have cash you could pick up a property in a good area for a very reasonable price.

At any time in the market, good or bad, you have to take a longer term view – at least five years or more if you wish to achieve good returns.

It's true that there are advantages to renting, but if you've done your homework and considered key aspects when buying a property such as location, condition of the property and possible costs of upkeep, and only purchase what you can afford, even allowing for deteriorating market conditions, it is more than likely that you will see a return on the investment you've made."
For further information contact Pam Golding Properties on +27 (0) 21 710 1700, email headoffice@pamgolding.co.za or visit www.pamgolding.co.za

Despite current market conditions placing severe pressure on second-home destinations, the Cape Overberg seaside towns of Pringle Bay and Rooi Els continue to enjoy consistent interest from serious buyers.

So says Pam Golding Properties (PGP), whose office servicing the towns has sold over R21million since the start of March 2009. Over 60% of these sales came from properties on sole mandate with PGP.

PGP’s area manager Mike Bisset says sales have been steady: “Recently, our agent has sold three outstanding seafront properties ranging in price from R3.4million to R5.6million, including a sought-after vacant beachfront stand in Rooi Els.

Four-bedroom modern beach bungalow in Rooi Els on nearly 3000m² of sea-front enjoying 360º views of mountain and ocean priced at R6.4mil.

Other sales have included R1.1million for a Cape Cod-style home close to the beach, R1.9million for an elevated three-bedroom home with magnificent ocean views, and R825 000 for a small wooden cottage.

This steady turnover of homes is proof that realistically-priced properties are still selling, despite the difficult market conditions.

Most of our recent buyers have been Capetonians and a few Gautengers, seeking second homes for weekend and holiday use, or taking a long-term investment stance.”

Bisset adds that the banks’ current rigid lending policies remain a barrier to sales, and says some buyers remain hesitant to put in offers subject to the sale of their own homes.

Rooi Els and Pringle Bay remain extremely popular with holiday-makers, but also boast a growing number of full-time residents.

These include retirees as well as young professionals, some of whom commute into Cape Town or Somerset West, and some of whom work from home, conducting their business via ADSL.

PGP’s MD for the Boland and Overberg regions, Annien Borg, says the amount of building activity is a sure indicator of the towns’ growing popularity and prosperity: “During the months of March, April and May alone, building plans were approved to a total of nearly R10 million per month, in the three villages of Rooi Els, Pringle Bay and neighbouring Betty’s Bay,” she says.

“Another sign of growth is the opening of a small private primary school in Pringle Bay – a sure indicator that more families are moving here permanently. And what better place to raise a family, than in this safe, beautiful environment?”

What better place, indeed? Situated between mountain and sea, Rooi Els and Pringle Bay offer spectacular ocean views, lovely beaches and countless opportunities to enjoy an active outdoor lifestyle.

As they are located within a World Heritage Site (the Kogelberg Biosphere Reserve), there are also strict restrictions on their urban expansion, meaning that they will not lose their character to unchecked development.

PGP currently has over 40 homes on the market in the two villages, along with more than 50 vacant stands.

Prices for houses range from around R800 000 for an older holiday cottage on 600sqm, going up to R6.4million for a modern four-bedroom seafront home on 3000m².

Vacant plots start from R300 000 for a 600m² stand with partial sea-views, while a 1500m² elevated mountainside plot with excellent views is available at R1.4million, and a 600m² beachfront stand at R3.95million.

PGP is also marketing six coastal small-holdings of 22ha each, with approximately 300m of sea-frontage, ranging in price from R4.5million for a vacant portion, up to R10.5million for a property with a three-bedroom home.

Inland small-holdings are also available, sized at approximately eight hectares each, and priced from R1.5million.
For more information, contact PGP agent for Rooi Els and Pringle Bay - Nicola Lloyd on +27 (0) 82 443 8376, office +27 (0) 28 273 8326, or email pringlebay@pamgolding.co.za
Area manager Mike Bisset can be reached on mike.bisset@pamgolding.co.za

Prime waterfront property around the globe is and always will be highly sought after – a fact which is particularly true in South Africa, which with its sunny climate and scenic vistas, is home to arguably some of the best waterfront real estate to be found, says Carol Reynolds, Pam Golding Properties Manager for Durban.

"The Point Waterfront, which is still in its early developmental stage, is starting to see renewed interest from buyers taking a longer term view - those who realise that this area is ideally positioned to provide astute buyers with some of the city's most desirable real estate in years to come.

While development of the Waterfront has taken off slowly, the area is now undergoing extensive redevelopment. Currently we are marketing a number of luxury brand new apartments, which offer sound value and investment potential.

Ideal for 2010
They are also ideal for rental to visitors during the 2010 Soccer World Cup, as they offer tourists the ultimate lifestyle proposition and are not only brand new but are also fitted with the best finishes," says Reynolds.

At The Spinnaker, a new luxury penthouse apartment building located at the Point Waterfront near the harbour entrance, Pam Golding Properties (PGP) is marketing a 444m² three bedroom (two en-uite), three bathroom luxury home, which is being sold fully furnished.

Harbour view from the penthouse apartment at The Spinnaker.

View over Durban beachfront and Indian Ocean from the penthouse apartment at The Spinnaker.

It includes a wrap-around open balcony with Jacuzzi and lush garden, open plan office/study, two dining rooms, two lounges, fully fitted, ultra-modern kitchen with gas and electric stove, covered terrace and garaging for three cars.

With panoramic views over the ocean, harbour, city and to the Bluff, this luxurious home is priced at R11mil and includes intercom, CCTV and plasma TV's. The building has round the clock security guards at both entrance and exit.

View from the Jacuzzi at the penthouse apartment at The Spinnaker.

View of Point Bay development at the Durban Point Waterfront.
At Point Bay, completed at the start of 2009 and only five minutes from the beach and a 10 minute walk from uShaka Marine World, PGP is marketing 10 upmarket units ranging in size from 75-193m² and priced from R1.57 million to R4.2 million (no transfer duty payable) – both furnished and unfurnished.

The units have from two to four bedrooms and two or three bathrooms, granite kitchens and two undercover parking bays included in the purchase price.

All the units have balconies and while most have scenic ocean views some enjoy views over the vibrant harbour.

The building includes a rooftop communal pool with spectacular views, elevators and 24 hour staffed security.

Adds Reynolds: "In addition to being designed to maximise homeowners' enjoyment of Durban's year round sunshine, Point Bay displays creative and beautiful architecture. The units offer sound value for money and good investment potential for those able to take up the opportunity at this time.

"Right now we're seeing a positive shift in the property market in general – suddenly we're noticing less available stock, which is an indication that the market is starting to turn as buyers commit to purchasing.

We're also seeing more activity at show houses and through the PGP website, so sentiment is improving," she says.
For further information contact Carol Reynolds of Pam Golding Properties Durban on +27 (0) 31 3137300 or email carol.reynolds@pamgolding.co.za
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