Real Estate Investor Magazine South Africa April 2016 | Page 46

PROPERTY DEVELOPMENT

How to protect yourself

from a weak market
P

roperty developers have specific buyer
segments that they target when looking to
sell; the investors (local and foreign) and the
owner-occupiers. Most of the time these are equally
targeted, but as our economy continues to enter into
uncertainty, it is becoming apparent to a few savvy
developers that the owner-occupier segment offers
more security and longevity than the investor market.
In times of economic uncertainty, many people
put investing on the back-burner whilst dealing with
everyday expenses. Recessionary economic conditions
can also curtail investment. Owner-occupiers
however, who are buying to live, will still require a
home as a primary need.
“There is a saying that goes ‘a building is only as strong
as its weakest owner’. With every new development,
the curation of like-minded homeowners protects
the development as well as the asset through the
alignment of interests and expectations. It also plays
simultaneously into their lifestyle ambitions, which
in itself has positive returns. At Blok we have been
fortunate to have a majority of owner-occupier clients
which not only helps to deliver our vision of connected
urban living, but has also allowed us to really push the
quality of our product through Thoughtful Design,
high end finishes and innovation,” says Jacques van
Embden, MD of Blok.
Paul Berman, Chief Executive, Berman Bros. Group
says, “owner-occupiers and property development
investors generally operate in different markets and
use different metrics to measure their investment’s
performance. The property developer’s motives are
predominantly guided by the capacity to deliver a solid
return on investment within a specific time frame. For
this type of investor; the location of a property, the
historical performance of the neighbourhood, and the
potential for return are their primary considerations.
While a savvy owner-occupier will also consider the

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APRIL 2016 SA Real Estate Investor

long-term investment potential of a property, their
primary focus is on the “ingredients” that make a
house a comfortable home for their family. Owneroccupiers evaluate a property’s contextual design, the
finishes, and aesthetics to determine the liveability
of a home and whether the property fits within the
context of their lifestyle. They can add considerable
value to their acquisition through the time, care and
attention they pay in improving their property and
can enjoy the benefit of th \