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Property 24/10 - 540
18 February 2021 00:00
This week on Property24.com: How long properties are taking to sell; body corporate property maintenance; SONA 2021 - Key factors for SA's real estate sector; and is office property market set to be the weakest in 2021?
Office property market set to be the weakest in 2021?
The Office Property Market appears to have surpassed the Retail Property Market in terms of being perceived by brokers as the weakest of the 3 major commercial property markets in South Africa.
John Loos, Property Sector Strategist for FNB says this is the overarching outcome of the latest FNB Property Broker Survey, relating to supply and demand in the Industrial, Retail and Office sector. Loos outlined the following key themes, based on the survey:
The Industrial Property Market is still perceived to be the strongest of the three.
However, a very weak perceived demand-supply balance in all 3 property classes has continued in the 4th quarter survey.
In the area of Industrial Property, it appears to be that the 3 coastal metros, i.e. Cape Town, Nelson Mandela Bay and Ethekwini, are where the relative market strength lies, with Gauteng metro regions being the area of relative weakness, Johannesburg being especially weak.
Greater Johannesburg comes out with the weakest demand-supply balance readings in all 3 major property sectors.
Here's how long it's taking properties to sell in South Africa
Estate agents and property economists often talk about the average 'listing time' getting longer or shorter - but what does this actually mean to the individual home buyer or seller?
Gerhard Kotzé, MD of the RealNet estate agency group, says the average listing time is a useful measure of whether the market generally is moving in favour of buyers or sellers.
“The listing time of a property refers to the number of days between the time that it is first listed as being for sale, and the time that an offer to purchase is accepted or the owner decides to take the property off the market again. And of course that period tends to be shorter when there is high demand and lots of buyers keen to snap up any well-priced properties that become available - and longer when there is low demand and an oversupply of properties for sale relative to the number of potential buyers.
In short, Kotzé says when the national average listing time gets longer, it is an indication that a 'buyers’ market' is developing and that sellers may need to become increasingly accommodating with regard to both price and terms in order get their properties sold.
Common property maintenance | Is your body corporate protecting your investment?
Although a body corporate should not have 'making a profit' as their primary function, it is notable that the trustees are tasked with doing all things reasonably necessary for the control, management and administration of the common property, and for the enforcement of the scheme rules in the interest and the benefit of the body corporate. This may include doing things that could reduce or subsidise the monthly levies of the owners.
This is according to Paddocks, specialists in Sectional Title & Home Owners' Association (HOA) law, who say that the nature of a body corporate is not to run at a profit, but rather to pay their operating expenses and generate reserves. Section 4(g) of the Sectional Titles Schemes Management Act 8 of 2011 (“the STSM Act”) gives the body corporate the power to to invest any monies of the administrative fund.
Bjorn Laubscher, Managing Director of Mirfin Valuation Services, says the cost of a maintenance project for a sectional title scheme is usually determined by its size, the current state of repair and the degree of maintenance required. To assess these costs, the body corporate should request quotes from a number of relevant contractors.
SONA 2021 | Key factors for SA's real estate sector
SA’s vaccine campaign is critical to enable safe, economic recovery and the creation of jobs as fast as possible - key factors for homeownership and real estate investment. Here's what property industry experts had to say about SONA 2021.
President Cyril Ramaphosa’s state of the State of the Nation Address (SONA) on Thursday evening had the tough task of addressing issues of corruption, economic growth and reform and the lack of infrastructure to service the country – “the same subjects addressed in SONA 2020”. The SONA delivered by the president was generally encouraging for the real estate sector, says Gerhard Kotzé, MD of the RealNet estate agency group, as it outlined some practical and immediate responses to the economic devastation and employment loss that has been brought about by the Covid-19 pandemic - across all sectors of the economy.