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Property 24/10 - 88

8 December 2011

SA's sought-after rental locations
Quality and well priced rental properties in some parts of Johannesburg north are reportedly being snapped up quickly as they come into the market.

According to Pam Golding Properties (PGP), the demand for these properties has led to shortages in some areas.

Shaun Groves, PGP rental manager for Johannesburg northern suburbs, says where properties are correctly priced, landlords generally have little trouble in renting them out.

He says that as in property sales, there are still some owners who are overpricing their properties which result in these homes not getting any tenants.

In such cases agents have to undertake price counselling with the property owner to ensure that a realistic, market-related rental is set and achieved.
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Homes to suit all property buyers
While some residential markets may be struggling thanks to flat house price growth, others are experiencing a surge in increased buyer activity.

Lanice Steward, managing director of Anne Porter Knight Frank (APKF), says even with unimpressive house price growth statistics, there are always pockets in a market that do well.  

Areas such as Lower Constantia and Bergvliet are good examples.

She says Bergvliet has in the two or three years become the flavour of the month and its image transformed from that of a precinct on the fringe of the better areas to one which is definitely an integral part of them.

This trend has been reinforced by an influx of young upwardly mobile couples who see Bergvliet as an acceptable alternative to Constantia. 

Buyers modernise and upgrade the homes they purchase, she says.
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Court decision may halt urban upgrades
Investment property owners, especially those who are the landlords of low cost residential property in high density urban areas, are right now awaiting, with some trepidation, the outcome of a trial in the Constitutional Court, which, says Gunstons Attorneys’ commercial director, Trudie Broekmann, is likely to be ‘ground breaking’. 

She says it could permanently alter traditional landlords’ rights but community and human rights organisations representing indigent tenants are holding out hope that the judgement will provide extended security of tenure for the urban poor, who often “fall between the cracks” because housing law does not protect their situation. 

In the case, Maphango and 17 Others v Aengus Lifestyle Properties, on which the eleven judges are now considering the issues and writing their judgements, a developer who has bought up a scruffy Braamfontein apartment block known as Lowliebenhof so as to be able to renovate it, has been refusing to renew tenants’ leases once they have expired. 
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Why buy commercial property?
Although the South African residential property market growth will be flat for the next two years, the commercial sector’s recovery is underway.

According to Jason Lee, head of Rawson Properties commercial franchise division, this will be a change from the traditional pattern that follows downturns, which is for the residential sector to lead the recovery. 

“I think the residential sector is likely to take longer to emerge from the present stable, no-growth situation but the prospects for commercial property are now looking good,” he says.

He explains that the commercial sector has shown a greater degree of resilience in the downturn than residential property. 

This is due to the low current interest rates which have made bonds more attractive and encouraged cash-strong investors to look elsewhere for yields greater than those available from the financial institutions.
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Property owners take Joburg to court
Property owners and developers have applied for an urgent interdict in a bid to halt the City of Johannesburg from illegally cutting water and electricity supplies, according to a report on Monday.

The Business Day reported that according to papers filed in the Johannesburg High Court on Monday, the city did not comply with its legislated obligations.

There were 12 applicants, including the Property Owners and Managers Association.

If granted the order would affect everyone entitled to basic municipal services in Johannesburg, Maurice Crespi of Schindlers Attorneys told the publication.
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Zero tolerance for levy non-payers
It is essential that non-payers in sectional title schemes be dealt with quickly and the body corporate needs to take an attitude of ‘zero tolerance’ towards defaulters. 

Michael Bauer, general manager of property management company IHFM says the big problem in sectional title schemes is that a minority of members - often living an unsustainable lifestyle and paying their hire purchase, retail and other accounts only as and when it suits them - adopt the same lackadaisical approach to their sectional title levy payments.   

He says some members of sectional title schemes have legitimate and serious reasons for being unable to pay their levies, but whatever the reasons, the trustees have the fiduciary responsibility to ensure that their body corporate is liquid and remains solvent.   

“They must, therefore, enforce strict credit controls and treat all non-payers equally.” 
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Jozi's town planning scheme a concern
The City of Johannesburg’s new town planning scheme has been described as unworkable and will have negative effects on the property industry.

According to the South African Property Owners Association (Sapoa), the town planning scheme has ignored virtually all input from the South African property professionals.

Sapoa points to a number of alarming bombshells buried in its fine print.

An effective appropriation of rights without compensation arises from a clause that provides for approved rights which are not exercised within 24 months to become null and void, it says.

The scheme also states that the municipality is not bound by its own town planning scheme.

The City of Joburg implemented a new town planning scheme last week - The Consolidated Johannesburg Town Planning Scheme 2011.
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Stellenbosch buy-to-let development
A new residential property development, close to the University of Stellenbosch that combines sectional title apartments and freestanding houses will help to meet the increasing demand for student accommodation in the area. 

Nuutgevonden, which literally translates to “newly discovered”, offers first-time home buyers an affordable option to enter the property market while the ongoing need for student rentals offers buy-to-let investors an attractive incentive. 

Prices for apartments range from R599 000 to R725 000 and these are 59sqm and 60sqm in size. Freestanding single storey and duplex houses of 100sqm and 120sqm are priced between R849 900 and R1 190 000. 

The secure estate development is financed by Nedbank Corporate Property Finance which has teamed up with Asrin Property Developers, a long-standing client. 

Richard Thomas, regional executive at Nedbank Corporate Property Finance Cape says this development is valued at R96 million and will cater for the strong demand for student accommodation in the area. 
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