Real Estate Investor Magazine South Africa March 2015 | Page 23

REI RESIDENTIAL

Expert Q&A

V&A WATERFRONT SALES HIT FIVE-YEAR HIGH

R

esidential sales at the
V&A Waterfront has
hit a five-year high
with 45 apartments worth
R482 million sold last year.
This is according to Seeff
agents, Ross Levin and Kim
Bailey. This is higher than
the R417 million recorded
for 2010, that included
the R245.1 million sale of
Lawhill.
This includes the highest number of R20 million-plus sales. Seven apartments
were sold, ranging from a Palgrave apartment at about R24 million to two luxury
penthouses sold for R31 million and R32 million respectively.
Buyers are prepared to pay close to the asking prices. One-bedroomed apartments
now sell for around R4 million and two bedroomed units for around R8.4 million.
Three-bedroomed apartments sell for upwards of R18 million to around R25 million,
while penthouses can range to R36 million for a 500m2 unit.
The strong trend towards residential buying has continued. About 70% of sales
over 2014 have been to local buyers, while about six apartments were bought by
Johannesburg buyers. About eight apartments were sold to foreign buyers, from the
UK and Europe, with two sales to UAE nationals.
The rental market continues to perform well with apartments for long-term
residential and short-term holiday and business lets, consequently commanding the
highest rental rates in the country. A one-bedroomed apartment, for example, rents
out at around R25, 000 while a three-bedroomed unit can reach up to R60, 000 per
month.
Taffy Adler
CEO
Housing Development Agency

There are about two million households in urban
areas that live in sub-standard housing conditions.
Approximately 3.5 million (24%) do not qualify for
fully subsidised housing. A revision of the housing
finance system is required to address the backlog.
This includes supporting a spread of housing types
with different tenure arrangements, and fostering
mixed-use development.

Boni Muvevi
CEO
Gauteng Partnership Fund

The Rental Housing Fund was developed for rental
housing entities that require additional funding for
their projects. The equity type loan enhances the
debt to equity ratio for projects to enable lenders to
finance, on favourable terms.
www.reimag.co.za

CONTRIBUTING FACTORS FOR
STOCK SHORTAGES

Lanice Steward
Managing Director
Knight Frank Residential
South Africa
Q How do transfer fees and the high
cost of moving homes affect stock
shortages?

The transfer fees being charged are at
around 8%. The purchaser will need an
extra R80 000 for every R1 million that the
home is worth. There are many ‘sunk costs’,
such as the cost of minor renovations and
repairs to the property, curtains or blinds,
the moving company, transfer of items like
telephone and ADSL lines, etc., which are
added to the overall budget.
Q How does financial pressure
of home owners impact stock
shortages?

Decreasing numbers in those downscaling
due to financial pressure is prevalent and
has contributed to the lack of stock being
fed into the market. Older home owners are
holding back on their downscaling. A new
trend is forming where their children move
in with them and build a ‘granny flat’ on
the premises.
Q How do stock shortages influence
the selling price of properties?

Properties have reached higher prices than
they did a year ago. However, it is not
a sound reason for a seller to overprice
their property; as the market, although it
will pay more, will not pay absurd prices.
Sellers must realise there will be the same
implications as there always have been if
a seller overprices a property. If it is on the
market for a long time, their property gets
a stigma and the seller might achieve a
lower price in the end.

March 2015 SA Real Estate Investor

23