A year ago at this time we were all looking forward to the World Cup and its impact with great excitement. So what do we have to look forward to next year in terms of our property market? I believe that we are now on the bottom axis of an L-shaped graph – and that sales and activity will remain pretty much as they have for the last little while. This is in fact good news, and much better than in the rest of the world, which is largely not on a steady path but dropping down yet more.
Next year will also be one of interesting changes in the industry as a whole, including mandatory training (NQF 5) for estate agency principals, which I think will see yet more culling until we are left with only those who are really serious about this industry. Apparently there are 35 000 agents registered on the estate agency registry; 7000 of these are interns, so 28 000 are practicing, and of these 12 000 are principals and 16 000 are agents. I think more will fall out during the Recognition of Prior Learning (RPL) process – and that by the end of 2011 there will be 24-25 000 remaining. Back in 2004-2007 there was an average of 40 000 property transfers taking place every month – divided among around 80-90 000 estate agents. Today there are about 16 000 transactions per month, divided by 28 000 agents – so in fact agents should be better off. For those who stay the distance, it will be better next year – and I can almost guarantee that it will be even better in 2012, with markets around the world picking up.
With the interest rate at its lowest level in 36 years, gradual easing of mortgage lending and improvement in household balance sheets will begin to underpin renewed demand during the latter part of 2011.
*Samuel Seeff is chairman of Seeff Properties
In 2011 the greatest challenge for the auction industry will be to refocus on a buyer’s market still constrained with a shortage of demand and an over supply of non-income producing properties.
As the country gets used to a long, hard and bumpy recovery, the economic headwinds will still be strong and unemployment rates alarmingly high.
While the lowest interest rates in 30 years will boost sentiment and cause a bounce in properties with reliable cash flow, the favourable interest rate environment won’t be a magic pill which quickly relieves the downturn.
Finding the right buyers at auctions and getting funding will remain challenging.
Business confidence will be dependent on a host of local and international issues; including fears of a potential sovereign debt crisis in Europe.
While distress at retail level may slow with lower interest rates, and banks now well geared up to assist defaulting clients, corporate distress will grow with larger liquidations bringing higher value assets to the auction floor.
High value bankruptcies will increase throughout the year, presenting opportunistic purchasing like never before seen in South Africa.
As liquidators and banks get more desperate to offload bad debts and an oversupply of development land, a sweet spot will emerge for investors with access to financing as they pick up these assets at bargain prices.
The residential property market will remain flat for most of the year with a stronger recovery at entry level. Investors will snap up properties below R1 million, which for the first time in many years will provide stronger returns than cash in the bank.
The middle market will remain flat for some time as it deals with oversupply in newer residential areas.
The luxury residential market across the country will remain weak all year, with little help from interest rates, and a strong Rand constraining international demand.
Leisure residential properties at the coast, on golf courses and in other non-urban areas will also remain flat with many properties being sold at auction below replacement value.
Next year two pieces of legislation may have a major impact on the auction sector. The Consumer Protection Act will change a wide range of issues regarding the auction process, mandates and sales processes; these are all designed to look after the consumer’s interests.
The new Companies Act will also have a material effect with the introduction of Business Recovery.
This may cause an initial slowdown in liquidations as companies go through the business recovery process.
It is possible that liquidations may increase later in the year as banks rush to secure their positions on property exposures. Either way, it will have a material impact on the auction sector.
The commercial property market will become two-tiered; good properties with strong covenants and reliable cash flow will experience a surge in demand as investors look to place their cash in areas that achieve greater returns than bank deposits.
Blocks of flats, retail property and key industrial sites will form the strongest part of the market.
The office market will remain mild but A-Grade properties in prime locations will attract strong demand on the auction floor.
An area of concern will be hotels, guest houses and leisure resorts which will battle in 2011 and may hit the auction floor with little demand.

Source: I-Net Bridge

Key aspects of the CPA which will apply once the Act is implemented (expected to be 31 March 2011), to the property industry specifically are:

SCOPE OF THE ACT:

The Act regulates the activities of suppliers and creates rights for consumers. Most entities supplying goods and services in SA and the transactions they enter into with consumers will fall within the Act.

A “supplier” is defined as a person or entity who markets goods or services as his or her ordinary course of business. A “consumer” includes a person to whom a particular service or goods are marketed or has entered into a transaction with the supplier in the suppliers ordinary course of business.

The Act does NOT apply to all consumers – for example transactions including the supply of goods and services to juristic persons whose asset value or annual income is over the threshold value(draft Regulation sets at R3 million currently) will not fall within the ambit of the Act.

In regard to a property transaction, where the supplier is a seller of property (who sells property as his/her ordinary course of business), and the purchaser is an individual or a juristic body whose turnover or asset value is LESS than R3 million, then the Act has application.

In regard to leases, where the landlord lets property as a living and the consumer is an individual or juristic body whose turnover or asset value is LESS than R3 million, then the Act has application.

In both cases, the Act applies and the rights attaching to such ‘consumers” as tenant or purchaser in a property transation, will have application.

[*The basic test being whether you sell property or property services “in the ordinary course of
business” means that it is unlikely that the CPA will apply to property sales in the average “one- off” private sale situation – it is aimed more at “commercial” sales- by property developers, builders
speculators, and other property dealers, and in regard to the lease of property, to landlords that rent out property for a living].

SOME OF THE REMEDIES FOR CONSUMERS PROVIDED BY THE ACT:

Right to fair and honest dealing with consumers –Sections 40-42, 44

The CPA deals with unconscionable conduct, false, misleading or deceptive representations (whether by word or conduct), fraudulent schemes or offers, and the consumers right to assume a supplier is entitled to sell goods. Consumers (purchasers) are entitled to fair and reasonable marketing. “Market” is defined in the CPA as the “promotion and supply of any goods or services”.

Estate agents will need to take cognisance of all the relevant provisions in the Act (some of which are listed below) in regard to their marketing practices, and to all mandates that they take from sellers and purchasers (even in regard to “once-off” private transactions).

All negotiations and representations made by sellers, estate agents, property developers, builders and other property dealers – to purchasers must comply with the Act, so as to ensure that purchasers are treated lawfully and fairly.

Cooling off period – Section 16

Consumers are afforded a period of five business days to rescind a transaction resulting from any direct marketing without reason or penalty, by notice to the supplier in writing.

This section may have the effect of allowing a cooling-off period when a property is purchased
due to direct marketing, even if it is sold for more than R250 000.

Right to fair value, good quality and safety – Sections 53-60
Fair value – Sale prices could be scrutinised for reasonableness. In addition, the price should always be displayed when the property is being advertised for sale.

Where the Act applies (Section 55), the purchaser has a right to return goods (to require the seller to take retransfer of the property) if the goods (property) are not suitable for the purpose which they were intended or of good quality and free of any defects.

Section 55(6) states, inter alia, that where the sale agreement EXPRESSELY lists any patent (visible) defects, latent (unknown) defects, or specifying the exact condition of the property , the seller will most likely be protected. Such clauses must be expressly accepted by the purchaser.

Right to return defective goods

Section 56(2): Within six months after the delivery of any goods to a consumer, the consumer may return the goods to the supplier, without penalty and at the supplier’s risk and expense, if the goods fail to satisfy the requirements and standards contemplated in section 55.

In effect, where the Act applies, the purchaser has the right to return the goods to the seller –without penalty and at the seller’s risk and expense-within six months of delivery (registration of transfer at the deeds office).

Effect of the CPA on the Voetstoots clause

There are conflicting views on the likely effect of the CPA on the traditional voetstoots clause. The Department of Trade and Industry has categorically stated that the voetstoots clause will no longer apply.

Certainly, where the Act applies, traditional voetstoots clauses that breach the consumer’s rights as per Section 55 of the Act will no longer be applicable. Property speculators, developers, builders and the like will be required to comply with Sections 55-56.

However it is also likely that the exception in Section 55(6) will relate to the voetstoots clause in that when the purchaser signs the deed of sale, and (s)he acknowledges that (s)he has been expressly informed that the property is sold in the specific condition that (s)he sees it, and which condition is listed in detail in the contract itself, and is acquainted with the property’s condition, nature and extent, and accepts it as is, then the exception should apply.

As set out above, the CPA will most likely not apply to once off private transactions between purchaser and seller and accordingly the traditional voetstoots clause will most likely remain in force and effect in such transactions. This question is still unclear and it remains to be seen how the voetstoots clause will be affected once the Act is implemented.

Source: Please note that the above information is not exhaustive and serves as a brief overview of the proposed legislation, which is yet to be implemented. There are still many “grey” areas and uncertainties that have yet to be resolved.

I definitely advise that you should inspect the property you intent to buy thoroughly before signing any documents. Only in certain instances, will the buyer be protected against severe defects discovered in the property after the transfer of the property has been registered. The law will attempt to determine whether the defect is patent of latent, and if latent, whether the seller deliberately concealed it with the intent to defraud the buyer, and on these grounds, the appropriate authorities will make a ruling as to who is responsible for the cost of repair.
You are advised to not only undertake a physical inspection of the property, but also adding the local authority’s approval of any outbuildings, additions and alterations that have been effected to the property. In terms of the Law, the absence of statutory permissions (approved building or alteration plans, etc.) may very well be “defects”.
A patent defect is clearly visible upon reasonable inspection, like a crack in a wall or window. It should also be very clearly stated in the Offer to Purchase who shall be responsible to “fix” or to “replace” this defect.
A latent defect is not so easily picked up on superficial inspection, for example faulty geyser, a damp area concealed behind furniture, fresh paint concealing a defect, or a leaking roof.
The buyer has no recourse against the seller for “patent” defects, which are visible or obvious without inspection – it is up to the buyer to look for them, and to decide whether or not to proceed with the purchase or alternatively to negotiate the repair thereof.
The seller is responsible for all latent defects in the property for three years from the date of sale of the property. It is for this reason that a seller would stipulate in the agreement of sale that the property is for sale “as is / voetstoots”. This covers the seller against all defects, including “latent” (non obvious or hidden) defects, although he is still responsible for any latent flaws that have been deliberately concealed and can only rely on the “voetstoots” clause if the defect was unknown to him. However, the burden of proof is on the purchaser if he alleges that the seller knows or ought to have known about the defect, and deliberately concealed it.
A buyer should ask the seller to supply all warranties and documentation relating to repairs and maintenance on transfer of the property.
Depending on the circumstances, the buyer can cancel the contract and/or claim repayment of a portion of the purchase price when a latent defect is present. In terms of the law a buyer cannot simply obtain a quotation for the repair or replacement of the defect in the property and then deduct the cost thereof from the purchase price and tender a lesser amount (or reduce his deposit) to the seller. Any new defects that are discovered or occur after the sale of the property but prior to registration of transfer will be the seller’s responsibility, unless caused by the buyer during occupation.

Game Reserve

R 215000 (not neg)

PROPERTY DESCRIPTION
Au Soleil Game Reserve is a unique blend of duineveld and fynbos…

Various species of flora is found on the Reserve, Combining the ocean, beautyful mountain views and game, makes the Reserve a perfect getaway.

Also included:
-Game viewing
-Game viewing on horseback
-2 Mountain Bikes
-Vehicle for daily use at minimum cost
-Shuttle services to and from George airport
-Fishing equipment

www.ausoleil.co.za, From only R215000, A must see!

PROPERTY INFORMATION
Bedrooms 3 Bathrooms 2
En suite 1 Dining Area 1
Lounges 1 Study 0
Garages 0 Carports 0
Property type New Development Land Area N/A
Pool false Flatlet false
Servant’s Quarters false Garden true
Pets Allowed false Levies/Rates N/A
Stand Size N/A Building Size N/A

CONTACT INFORMATION
Name: Johannes
Email: johan@ausoleil.co.za
Cell: 0824169517

R 3500000

PROPERTY DESCRIPTION

The site is located in the centre of the CBD of Vanderbijlpark. The CBD area is well developed with all amenities and access to the area is considered to be good, via a network of main and secondary roads. The nearby Vereeniging / Parys Road (R42) lead to most major townships in the Vaal Triangle such as Vereeniging and Sasolburg as well as the N1 and R59 freeways, which in turn allow access to Johannesburg and Bloemfontein.

The subject property comprise a double storey building which covers 100% of the stand, which accommodates 3 smaller shop areas and a warehouse portion on ground floor level and open spaces and offices on the first floor, suitable for storage. The first floor offices is utilised by the ground floor tenant and the remainder, which is mainly 2 large open spaces, by a drug rehabilitation centre.

PROPERTY INFORMATION
Stand Size 975 m/sq
Building Size 1857 m/sq
Floor Area 1815 m/sq
Levies/Rates: R5916

Business Rights
Receiving & despatch bay
Visitor’s Parking

CONTACT INFORMATION
Name: Morne Labuschagne
Email: morne@vaidrofin.co.za
Cell: 0866167936
Tel: 0169324940

R 700000 (neg)

PROPERTY DESCRIPTION

Hibberdene, Charming holiday home/Great investment! Walking distance to the beach,an ideal holiday residence. Private garden and braai area ideal for entertaining. Don’t miss out on this bargain!

Contact Esme 0812972275 for more details.

PROPERTY INFORMATION

Bedrooms: 3 Bathrooms: 2
En suite : 1 Dining Area: 1
Lounges: 1 Garages: 1
Carports: 1
Pool: false
Flatlet: true
Servant’s Quarters: false
Garden: true
Pets Allowed: true
Levies/Rates: N/A
Stand Size: N/A
Building Size: N/A

CONTACT INFORMATION

Name: Esme
Email: esme@pgglasspotch.co.za
Cell: 0812972275

R 3000 (not neg)

PROPERTY DESCRIPTION
Cosy little cottage close to main arterial routes and shopping centres.

PROPERTY INFORMATION
Bedrooms 1 Bathrooms 1
En suite 0 Dining Area 0
Lounges 1 Study 0
Garages 0 Carports 0

Pool: false
Flatlet: false
Servant’s Quarters: false
Garden: true
Pets Allowed: false

CONTACT INFORMATION
Name: Agent on duty
Email: reception@jlrdp.co.za
Cell: 0829261633
Tel: 0117661000