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| Durban Shows Healthy Capital Gains |
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The average selling price in the greater Durban area has increased across the board and is showing healthy capital gains
Latest sales results show that the number of units sold in many zones were down in the second quarter of 2007 compared to the same time period last year. This drop in units sold is attributed to a series of market-impacting events that started with an upturn in the interest rate in mid-2006. Rising house prices, additional rate increases, the public sector strike of June this year, the implementation of the new credit legislation and fears of an additional rate increase have all visibly affected buyer confidence and affordability, he says.
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| Longer Delays For Developers |
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Developers could face longer authorisation delays following a court judgement that emphasises socio-economic factors and gives ammunition to objectors
John Loos, property strategist for FNB Property Finance, is of the opinion though that this judgement will not have much effect on developers.
A recent Constitutional Court judgement, the Fuel Retailers Association of Southern Africa case, has highlighted the need to separate town planning criteria from environmental decision making dealing with the "sustainability" of a development and its impact on social and economic factors.
"In addition, the judgement looked at the legitimacy or otherwise of the practice of trade competitors who tend to lengthen the authorisation process by raising environmental objections for other than ecological motives," comments Glendyr Nel of Shepstone & Wylie Attorneys' environmental law department.
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| Cape 2010 Stadium Plan Wins Approval |
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A special sitting of the Cape Town city council has approved the final building plans for the city’s 2010 World Cup soccer stadium in Green Point
With tight deadlines facing the city, construction is already five weeks ahead of schedule, but the city is still being haunted by a legal challenge from activist group, the Cape Environmental Protection Agency (Cepa).
The challenge seeks to review the legality of the various provincial and council decisions taken in the lead-up to secure the new stadium site on the Green Point Common.
The hearing was "indefinitely postponed" after it was found the scale and complexity of the case and the work, which had to be done before it could be heard, meant that lawyers would not be ready on August 13.
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| Property Boom in Gonubie and Beacon Bay |
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East London is creeping eastwards as the city’s economic growth sucks more residential property developments into Gonubie and Beacon Bay
The growth trend is so strong that property developers predict that Beacon Bay and Gonubie will eventually merge and turn all the farmland in between them into a new and bigger suburb.
Dean de Villiers, from De Villiers Properties in Gonubie, said it was “inevitable” that Gonubie and Beacon Bay would eventually merge.
“it is already happening. A lot of farms have been bought up by developers who had some foresight three years ago. These are in the process of being rezoned for residential use,” he said.
| Eastern Cape Development Corporation, 30-07-2007 |
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| Cape Town Convention Centre to get R800m Growth Boost |
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Cape Town's highly successful international convention centre had been given the go-ahead to start an estimated R800m expansion
Rasool confirmed that Public Works Minister Thoko Didiza had said at the weekend’s presidential imbizo in the province that her department had agreed to put Customs House “at the disposal” of the centre.
The convention centre last year hosted 46 international conventions and the joint partnership between the province and the city council had been a runaway success story, attracting thousands of business tourists in the meeting, incentives, conferences and exhibitions sector, seen as the key to boosting SA’s tourism industry.
Rasool said at the opening of the Southern African Association for the Conference Industry’s national conference in Cape Town on Monday that negotiations had been in progress for the past two months with Didiza on the future of Customs House.
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| Traffic a Key Factor in New Developments |
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It will become increasingly important to invest in property close to work, business nodes and key transport routes
As congestion on South African roads increases , residential property areas situated on major transport corridors and near businesses are going to become sought after “hot spots”, says John Loos, property strategist at First National Bank.
Loos says this situation is going to happen increasingly rapidly over the next five to 10 years.
“I t is realistic to expect that by early next decade we could have a million new vehicles coming on to the roads each year. At the moment, it is nearing 700000. ”
He says it will be increasingly important for investors and home buyers to invest in property close to key places of employment and business nodes, as well as key transport routes. Such properties are “probably first prize” for residential property performance as they will be highly sought after.
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| Freehold Outperforms Sectional Title |
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Latest Lightstone house price index shows that owners of freehold houses have earned much higher returns on their properties over the past three years than investors who bought sectional title townhouses, apartments and flats
Latest house price data released by various banks and other industry players confirm that the widely anticipated slump in housing sales and prices has yet to materialize.
But not all sectors of the residential property market continue to perform equally well. Latest house price index released by Johannesburg-based mortgage risk management company Lightstone shows that owners of free hold houses have earned much higher returns on their properties over the past three years than investors who bought sectional title townhouses, apartments and flats.
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| Developers Await Final Decisions on Inclusionary Housing Policy |
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After months of waiting, South African developers will soon be hearing the final outcome on the national housing department’s policy on inclusionary housing
The proposed final draft of the government’s policy on inclusionary housing is currently being negotiated between the housing department, commercial property association SAPOA (South African Property Owners Association) and other industry stakeholders, and its results are imminent.
Inclusionary housing refers to government ordinances that require a given share of new construction and development to be made available to low and lower-middle income groups. Taking the form of a mandatory or voluntary ordinance, many cities internationally subscribe to inclusionary housing policies and include countries throughout Europe, the UK, the USA, Canada, Australia, Malaysia and China.
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| Strong Demand for Lower-End Property |
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The lower end of the residential property market, particularly houses valued below R600000, appears to be experiencing the strongest demand from prospective buyers
“The affordable housing market is where demand is. There is a shortage of stock in this segment but that developers are entering this segment, Clarke says. “There is also a shortage of serviced land sites and that adds to the cost of developing because land is more expensive. This is adding to the challenge of delivery.”
Clarke says the property values in the lower end of the market will continue to grow. “ There were 300000 jobs created last year and probably the same number of informal jobs, which can only add to the demand for lower-end housing. W e also have increased costs on the building supply side. That will also increase values. “Entry level buyers should enter the market as quickly as possible, otherwise they will become tenants forever.”
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| Lower House Price Growth Recorded in June |
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Property Trends - House Price Index
Growth in house prices in the middle segment of the market (see explanatory notes) declined to a nominal 14,9% year-on-year in June 2007, according to the latest Absa House Price Index.
This brought the average price of a house to about R924 800 in June. Nominal price growth was 15,4% year-on-year in May. In the first half of 2007 average nominal house price growth of 15,5% was recorded compared with the same period last year.
Real year-on-year growth in house prices of 7,9% was registered in May (the lowest growth since February 2003 when it was also 7,9%) compared with a revised growth rate of 8,1% in April, based on the headline consumer price index. In the first five months of
2007, real growth in house prices averaged 8,7% year-on-year.
| Absa Group Economic Research, 03-07-2007 |
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