STEWARD REJECTS DOOM AND GLOOM OUTLOOK FOR CAPE PROPERTY

Another high profile figure in South African real estate marketing has reacted strongly to the current wave of pessimism and negativity surrounding the residential property sector.

Lanice Steward, MD of Anne Porter Knight Frank, which has 64 agents, said that there is now almost a feeding frenzy in the industry, the bait this time being not new homes and apartments but negative opinions - and in her view this is totally unjustified.

Quoting just one example, Steward said she had recently been told by a gloomy agent that home repossessions were 400% up.

“What was not said, but is completely valid,” added Steward, “is that the base figure on which the percentage rise had been calculated was as close to zero as we have seen it in South Africa for 20 or 30 years.  Obviously any increase in repossessions calculated from so low a base line will look disastrous - but ABSA’s latest report has shown that although more home owners’ repayments are now being kept under careful surveillance, repossessions are still at a very low level and nowhere near the figures cited by some media.”

The more stable price levels now being experienced, said Steward, have alerted a fairly large band of cash flush investors at the Cape to new buying opportunities that did not exist a year or even half a year ago – but in Anne Porter Knight Frank’s territories there has been little or no sign of the bailing out and desperation sales described by some reporters.

“For every one or two people selling as a result of the more difficult economic situation,” said Steward, “I would estimate that we have 25 or 30 selling for the usual good reasons - upgrading, downgrading, transfers, retirement, enlarged families and the like.  I see almost no evidence of the train smash scenario reported in some of the property media recently.”

On the rental side, added Steward, Anne Porter Knight Frank’s landlords are very definitely happier than they have been for a long while.  Residential rents at the Cape, she said, did escalate ahead of the inflation rate and have now settled at higher levels.

“In one new, well-designed but not particularly large Southern Suburbs townhouse we were able to get the landlord R15,000 per month,” said Steward.  “That may seem a very high rental but if the tenant was involved in a bond for the same unit he would have to pay two and a half times as much.”  (R15,000 would be sufficient for a home worth R1,3 million whereas the unit in question has a value close to R4 million.)

“It can therefore be confidently stated,” said Steward, “that while interest rates remain at their current level, the rental market is now giving good returns.”

For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.