Pam Golding Properties Group Newsletter
PGP logoDate: January 2012

Andrew Golding
Dr Andrew Golding
Chief Executive
Pam Golding Property Group

Residential property market heads for 10% growth in house price values

Before reviewing current property market trends in this edition, we are delighted to announce that Pam Golding Properties has formed a partnership with Homecoming Revolution, and that we are now their exclusive, Pan-African property partner.

Homecoming Revolution is playing a significant role in introducing African professionals worldwide to relocation providers and employers ‘’back home’’ across the African continent, and with our experience and network of offices, we aim to offer home-comers and investors the best property solutions to help make their return as seamless as possible.

Reinvigorated market in 2015

Having resumed trading on a busy note at the start of 2015 – following the traditionally somewhat quieter festive season, during the first two months of the year we have seen activity in the residential property market continue in a similar, upbeat vein to last year.

Driven by high demand, stock shortages are increasingly prevalent, developers continue to demonstrate their confidence in the market, and, against a backdrop of increasingly positive market sentiment we are seeing residential property re-emerging as a genuine investment asset class.

Buyers are acquiring property for all the conventional reasons, purchasing homes for primary residence, investment purposes and also for leisure use as the holiday or second homes market enjoys renewed interest and activity. There has also been a significant improvement in the rental market – a trend which continues unabated.

Real house price growth above inflation

With the property market having been extremely busy over the past 18 to 24 months, further good news is that we are now starting to see first signs of real house price growth above inflation. With the market moving again, and prices starting to increase, and, all things being equal, we anticipate that we can expect to see house price growth of approximately 10 percent achieved across the market during 2015.

Interest rates are always an important factor which impacts on the property market, and while a gradual upward trend has been indicated - albeit on hold at present, the historically low interest rate environment augurs well for sustained investment in homes, particularly among first time buyers. Our outlook is therefore optimistic that this year will see the property market maintain its upward momentum in the second half of the current up-cycle.

Flurry of home improvements and renovations

An interesting spin-off from the resurgence in the property market is the home improvements market, which has been given a welcome boost as owners renovate and improve their homes.  Protecting and enhancing one’s investment in property makes perfect economic sense, and speaking again of values, it is not surprising that property values in a neighbourhood can benefit when residents in an area improve their built environment and surrounds.

Rands and 'sense'

Appropriately this month, with matters of taxation top-of-mind due to the National Budget announcement this week, we take a long, hard look at the transfer duty which is levied on the sale between a willing home buyer and seller, and its implications for purchasers - on whose shoulders this financial burden falls, as well as ultimately for sellers.

Reduction in transfer duty

Positive news emanating from the Budget - particularly for first time home buyers, was the announcement that the threshold for exemption from transfer duty has been raised from R600 000 to R750 000 for property transactions, while transfer duty on property transactions in the price bracket between R750 000 and R2.3 million will decrease.

It is however unfortunate that transfer duty on property transactions above R2.3 million will increase, as this places a further burden on the already onerous list of costs involved in buying and selling property.

While the Finance Minister delivered a solid, even-handed Budget, regrettably, the hefty increase in the fuel levy and temporary increase in the electricity levy will have an inflationary impact on the economy while further constraining consumers’ disposable income.

International exhibition in Sandton

A further noteworthy trend in the marketplace is South Africa’s growing appetite for acquiring residential property in prime locations around the globe. These purchases are for a variety of reasons, including residency options and of course, return on investment. To cater for this demand, from 10-13 March Pam Golding Properties is showcasing a range of international property offerings at our own property exhibition in Hyde Park Shopping Centre in Sandton, where we will feature attractive investment opportunities in Mauritius, Seychelles, Portugal, Miami, London and Berlin.

Surge in developments market

As alluded to above, the developments market has rebounded with renewed vigour, as evidenced by the launch of a groundbreaking, high-rise residential block, Park Central, comprising 445 luxury apartments in the heart of Rosebank. Cape Town’s central city, which has undergone significant revitalisation over the past decade, is a further case in point of a prime location which continues to draw major investment in a host of development and redevelopment projects, with its strong ‘live, work, play’ ethos attracting home buyers and businesses alike.

Another area enjoying an energised upswing following the recent recession is Franschhoek, including its top-end lifestyle market, where top prices of R36 million, R32 million and R27 million have been achieved by our local office.

Practical advice for homebuyers

This issue also offers a host of valuable advice for prospective homebuyers, firstly to assist in making the home-buying process stress-free, and then in regard to deciding what whether you should look at purchasing a sectional title, freehold or cluster home. Of interest to foreign nationals, Pam Golding Lodges and Guesthouses discusses the matter of claiming the repatriation fee deposit and the process to be followed.

Monterey, 12-14 Klaassens Road, Bishopscourt, Cape Town, 7708, South Africa