Pam Golding Properties Group Newsletter
PGP logoDate: January 2012

Paint your Wagon...

The resurgence in the residential property market has given a welcome boost to building material suppliers through a growing number of households renovating and improving their homes.

Italtile chief financial officer Brandon Wood reports a big jump in sales during the fourth quarter of 2014, continuing into the new year. Other building materials outlets report high demand for hardware, paint and glass products.

The Cape Town Building Centre, now in new, enlarged premises, is extremely busy, says Dwayne Burger. “Traffic began building up last year and continues to do so; even January, which is usually quiet, has been busy.” Burger adds that interest varies by season but that there has been considerable focus on eco-friendly ideas. “Kitchens and flooring are also big,” he adds.

The pattern of improvement is more or less global in countries where residential property has recovered from the dark days of the housing slump. Renovation spending, for instance, has become the fastest growing component of residential investment in Canada and has soared in the UK.

The two main categories of SA’s home improvement market, as tracked by First national Bank, are “Fully maintaining property and making some improvements” and “Not improving but fully maintaining”. Together they make up some 75% of the market.

The category, “Value adding home upgrades”, which was languishing at  some 3% of homeowners as far back as 2003, had risen to 15,5% by the end of last year, according to FNB’s John Loos.

During the housing slump one motivational factor keeping renovations and expansion work ticking was the upgrading segment of the market which couldn’t afford to move up to a new and larger home. Instead, they renovated and expanded their existing homes.

Now, as the residential market continues to head beyond the 10% benchmark in house price values and demand is outstripping supply, homeowners  with an eye on the rising market are adding value in order to sell and take advantage of the opportunity.

Most popular extensions with which to add value include an extra bathroom, bedroom, entertainment/TV room and a loft or office area. Of course, a lick of paint, attractive garden and a general spruce up all add value. Here in South Africa, security features and solar heating are important.

In spite of these trends, the overwhelming majority of home improvers (76%) still renovate for their own use.

A word of caution before the stepladders are hauled out of the storeroom… If you make alterations, be sure to inform your insurer. If you don’t, and you have a problem, your policy could be negated.

Stuart Murray

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