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13 hours 8 minutes ago

Buying-off-plan has made owning a brand-new home more affordable and accessible.

The repo rate is sitting at an unprecedented low and buyers and investors are caught between buying-off-plan versus buying an existing property. Grant Smee, Managing Director of Only Realty says that while buying-off-plan is an attractive investment opportunity, you need to do research before you purchase.

“These developments are well packaged, well marketed and offer everything that a buyer could need in a single gated community. There is however the risk of a developer ‘going bust’ or timelines changing due to a lack of finances, sales and uncontrollable circumstances such as the weather and most recently, lockdown”.

An appetite for risk will serve an off-plan buyer well. The financial benefits of buying into a development is a no brainer says Grant. “In fact, if everything goes to plan – and the market is right – then a buyer will make money on the property before they even move in.”

A buyer puts down a small deposit (generally R10 000 – R20 000) with no further payment required until the property is completed and transferred into their name.

New developments are normally phased, and each phase differs in price. Phase one is usually sold at the lowest price. “At this stage, there is no proof of concept or buyer confidence. Keep in mind that development financing can often only be activated once 70% of the units are sold so the need to entice buyers is critical” says Grant.

Grant says that this is standard practice, but you need to research the property developers, get references, and read through your ‘Offer to Purchase’ with a lawyer to understand all the factors involved.

When buying-off-plan, buyers are covered by the Consumer Protection Act (CPA) which provides buyers with a level of assurance in terms of the quality of the finishes and recourse relating to any deviation from the agreed upon plans.

Buying-off-plan versus buying an existing property

Negotiating – “We are seeing a lot of buyers flocking to existing properties in sought-after areas. In a buyers’ market, they can negotiate a great deal on properties that they perhaps couldn’t afford before”.

Off-plan properties, on the other hand, leave little room for negotiation. Finances can however be saved while the property is being built and the property generally increases in value before you’ve even moved in”.

Financing – “The property costs, including VAT and all associated fees are 100% covered when buying off-plan. We are however still seeing lenient loan criteria by the banks with regards to on-plan (existing properties) with many buyers receiving 100% bonds”.

Levies –Levies are one of the most overlooked costs when buying off-plan and they must be factored in with caution. Bear in mind that levies are only pinned down once the off-plan development is registered so the price given to you during purchase is merely an estimate. In an off-plan development, you are paying a lot for amenities purely because there are so many. Many come with gyms, pools, added security, club houses, schools etc”.

Grant advises that it may be best to investigate existing properties with fewer levies and amenities to get more ‘bang for your buck’.

Compare off-plan and on-plan properties before investing. Take emotion and added amenities out of the equation – do the sums and the research. There are great deals going around on existing properties too so don’t rule this out.”

Tips for buying-off-plan

  • Research, research, research!
  • Price around to make sure that you are getting the best deal in your respective area.
  • Get in as early as possible to secure the best possible location.
  • Visit the site regularly.
  • Work closely with your agent and check-in regularly.
  • Ask for timelines and stay on top of these.
  • Ask questions.
  • Get everything in writing.
  • Add a clause to your contract to protect yourself should there be delays or other issues that are out of your control.
  • Choose high-end finishes that will last (i.e. good locks, tiles, granite tops etc.).
  • Be rational and logical in making the final purchasing decision.
  • Factor in the cost of levies.
  • Beware of snags (hairline cracks, damp etc.) and make sure that these are done upon moving in.

Visualise the property, do your research on the area and similar properties within the area and keep the property’s future resale value in mind. Think long-term” he concludes.

13 hours 8 minutes ago

FNB Commercial Property has released its second quarter results for their FNB Commercial Property Broker Survey which involves a sample of commercial property brokers in the six major metros of South Africa i.e. the City of Joburg and Ekurhuleni (Greater Johannesburg), Tshwane, Ethekwini, City of Cape Town and Nelson Mandela Bay.

Focusing on the key drivers of movement and sales activity in owner-serviced properties, the survey results show financial pressure to be the biggest single driver and this has become more prominent in the second quarter of 2020.

FNB Commercial Property does not have a long history to compare a ‘good’ or ‘bad’ level of financial pressure-related selling but the recent readings appear significant and are increasing.

Respondents are asked to give their perception of the major drivers of ‘movement and sales activity’ in the owner-serviced property segment. The brokers estimate the percentage of movement and sales that they believe would take place for a particular reason, but the total percentage of all the reasons add up to far more than 100% because businesses can be perceived to be selling or relocating for more than one reason.

It is not an exact science, but the survey provides a broad picture. The highest percentage of owner occupiers are perceived to be selling or relocating influenced by financial constraints or pressures i.e. 57.4% in the second quarter 2020 survey, significantly up from 43.1% in the previous quarter and noticeably higher than the 39.5% recorded in the second quarter a year ago.

This appears as significant with ‘relocating to a place with better transport, logistics and commuter nodes’ (24.7%) and ‘relocating to be closer to the business’ particular market’ (25.1%).

However, sales and relocation for ‘bigger and better premises’ appear to be declining steadily in prominence as economic and financial times continue to toughen, with the estimated percentage of sellers ‘looking for bigger or better premises’ having declined significantly to 8.2% in the second quarter of 2020, down from 18.4% in the prior quarter, and down from a high of 22.4% as at the third quarter of 2019.

Looking at each region, the greatest level of financial pressure-related selling or relocation is perceived to be the Gauteng regions, Greater Johannesburg being the highest at 69% of sellers, followed by Tshwane with 60%.

The three coastal metros appear better by comparison, Cape Town recording 52% of sellers perceived to be selling for financial pressure-related reasons, eThekwini 49%, and Nelson Mandela Bay 45%. However, all five regions’ percentages have risen (deteriorated) noticeably from the prior quarter.


While some may attribute the second quarter increase in the percentage of financial pressure-related sales and movement in the owner-serviced property market to the COVID-19 lockdown period, this may only be partially true.

There was a broad rising trend in the percentage through 2019, since the inception of this survey, which can be easily explained by three quarters of recession prior to the COVID-19 lockdown. Therefore, while lockdown may have begun to impact, it is quite possible that much of this second quarter increase was the lagged impact of prior economic weakness, and that there is significantly more increase to come in this percentage of financial pressure-related selling.

Read the full report here:

17 hours 10 minutes ago

Cape Town’s South Peninsula will welcome a new mixed-use development. Located near Imhoff Farm in Kommetjie, the public participation process is set to commence mid-July 2020 as part of the required Environmental Impact Assessment (EIA).

The proposed development site comprises of 58,63 hectares of Cape Farm 1529 and it will include retirement, residential, retail, and educational amenities with close to 22 hectares set aside as a conservation area.

Landowner and developer, Red Cliff Property Pty Ltd. has developed numerous smaller residential estates in Kommetjie, including Imhoff’s Gift and Bluewater Estate.

Managing Director, Gerhard van der Horst says that their vision is to “sensitively develop the remainder of Cape Farm 1529 to address the future needs of our growing community.” The application for the rezoning of the land to ‘sub-divisional area zone’ is underway and consistent with the City of Cape Town’s forward planning. The ‘Master Plan’ application is to create a sustainable community where people can live and to work, integrated with those in the surrounding areas.

“The planning process has been undertaken in terms of all applicable legislation and municipal and provincial requirements, as well as feedback from interested local parties. We have crafted a master plan for the sustainable long-term development of the land, and we expect the full project to take between 30 and 50 years to be completed”.

The development site is located within the Southern Planning District urban edge and it will act as a link between the Ocean View and Kommetjie communities. Van der Horst says significant socio-economic benefits are anticipated, mainly due to increased temporary and permanent employment prospects as well as business opportunities.

At present, most residents work and spend their earnings outside of the area; our vision is to create a sustainable live, work, play environment. The development will attract new investment, promoting job creation and increasing income levels as well as contributing to the struggling local economy” explains Van der Horst.

It is estimated that the project will inject R1.56 billion into the area and create more than 6 600 jobs during its construction phase. The operational phase will contribute R330 million to the local economy with a further 604 employment opportunities for locals.

The proposed site will include a retirement village of over 200 units with a security estate and three-storey apartment blocks. Supplementary amenities such as shops, offices and a school will complement the residential elements and these facilities will be sustainably and locally accessible for future residents and tenants of the development as well as the surrounding communities.

The types of homes to be built – particularly the high component of retirement housing – are in line with local market needs. We have decided to kick off the development with the retirement phase,” says van der Horst.

Van der Horst says the proposed development is designed to achieve a balance between providing much-needed housing and protecting the environment. Homes will be built on land with lower ecological sensitivity and will be sufficiently set back from the sensitive wetland habitat to the north of the site. The houses will be located to minimise their visual impact on the site. Close to 55% of the total development area will comprise of open space which supports the vision to retain the area’s rural aspect.

According to the recently completed environmental scoping report, the proposed development site is undeveloped and contains some indigenous vegetation including endangered fynbos. The site’s ecologically sensitive areas will be set aside and secured as conservation areas that are specifically orientated to maintain ecological connectivity between the adjacent northern and southern parts of Table Mountain National Park.

The Public Participation Process (PPP) is due to begin in July and it will enable interested and Affected Parties (I&APs) to engage with the process and to help identify issues and concerns that need to be addresses. The PPP will entail the placement of relevant advertisements in local and regional media, on-site notices and direct notification of the immediately abutting neighbours and relevant public interest groups.