|
------------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL
LIFESTYLE PROPERTIES FOR SALE IN SOUTH
AFRICA: |
|
------------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL
PROPERTY NEWS
THE
YEAR PAST and THE YEAR AHEAD
is an in-depth presentation by Dr
Andrew Golding on the past year’s
difficult decisions and adaptations
that saw Pam Golding Properties survive
the economic slowdown and credit crunch.
Here you will also find investor hotspots,
trends, a regional overview, an off-shore
perspective, and a look ahead including
2010. This is
a must read
AVOID INFORMATION OVERLOAD
WHEN BUYING OR SELLING PROPERTY
- In order to equip home buyers with
concise, relevant information, the
Pam Golding Property (PGP) group has
launched an innovative web-based communications
system specially designed for this
purpose and the first of its kind
in the real estate industry in South
Africa. Read
about Alchemy here
Read about all this and more
below.
|
|
------------------------------------------------------------------------------------------------------------------------------------
THE
YEAR PAST and THE YEAR AHEAD
A Dr Andrew
Golding Presentation |
|
“Characterised
by at least a 50% fall-off
in the volume of sales,
an extreme scarcity of
bank lending finance and,
as a generalisation, a
marginal fall-off in pricing,
the past year has seen
extremely tough trading
conditions for the property
industry - all of which
conspired to leave companies
in this sector competing
in a market, which halved
overnight”, said
Dr Andrew Golding, CE
of the Pam Golding Property
(PGP) group in Cape Town
(18 November 2009).
ADAPTING
TO SURVIVE
“All companies have
had to adapt to these
conditions and we have
been no different. Since
the market started to
turn downwards more than
18 months ago, PGP has
managed to reduce its
overheads by more than
30%. This included some
retrenchments and natural
attrition in terms of
agent numbers, amounting
to close to 20% reduction
in our permanent staff
count and a 25% reduction
in agents. |
 |
Loss of Agents
“This is seen against
the backdrop of a residential
real estate industry where more
than 50% of registered agents
who were present 18 months ago
are now no longer in the industry.
And depending on which statistics
you believe, those numbers may
even have dropped by more, supposedly
from a high of 80 000 agents
two years ago to somewhere in
the order of 25 000 agents currently.
Focus on Core Business
However, while these circumstances
have been challenging they have
also afforded the opportunity
to make the business more efficient
and certainly more focused on
its core business. In addition,
through our own strategies and
efforts, as well as the attrition
in the market, there has been
a significant increase in market
share.
Retain & Recruit
There has also been a flight
to quality in terms of agents
and so a number of agents who
perhaps thought that in the
good times it was sensible to
go on their own or to start
new businesses, have found the
going tough and have been prepared
to return to the safety of PGP.
As such, we have managed to
retain our top agents as well
as recruit a number of top agents
from other companies throughout
the county.
Best Practices
In addition to this, I believe
that one of the other reasons
for our success this year is
the fact that we have stuck
rigidly to - and in fact reinforced
- our best practice marketing
and administrative measures,
strategies and resources which
have been in place for some
time.
|
 |
Sole
Mandates
We do believe that the
sole mandate process is
the preferred and most
effective way of doing
business and I think our
results show beyond doubt
that in fact we are able
to achieve higher prices
for sellers on a sole
mandate basis than the
far less manageable open
mandate system.
MARKET
SEGMENTS
Uber-Prime Market
In regard to market segments,
starting first with the
uber-prime market, while
trade in this particular
segment has been thin,
it has continued to surprise
us with its ability to
push the top end of the
residential property market
in South Africa to new
levels, and there have
been well recorded record
sales in SA’s top
suburbs. |
Global Measures
There is no doubt that this
segment of the market has now
become measurable in terms of
global comparisons and therefore
it is not inconceivable that
these prices will continue to
rise as discerning buyers find
value in SA’s very top
properties.
| As a result
I think it is no surprise
that properties are now
being marketed in this
genre at R100 million
and beyond. |
Affordable Housing Segment
Below this super-prime market,
the rest of the market segments,
namely the affordable housing
segment, the so-called low price
segment, the mid-segment, as
well as the high segment, have
all performed in a similar fashion,
categorised by a dramatic fall-off
in volume of sales; a moderate
reduction in prices - probably
in the order of 10-15% over
an 18 month period; a marked
reduction in the ability to
secure mortgage finance and
as a result a trend towards
much higher equity property
sales; and a requirement for
cash deposits and generally
a significantly higher percentage
of cash sales than before.
Extremely Strict
In fact, one of the most fundamental
changes that we as an organisation
have had to adapt to is that
in order not to be lulled into
a false sense of security, we
have had to be extremely strict
in terms of recording what we
believe are completed sales.
Good Old Days
In the old days a completed
sale would be a successfully
concluded sale with all suspensive
conditions – other than
bond approval - fulfilled and
that sale would go up on the
board in each branch, generally
speaking with a cancellation
rate of somewhere between six
and eight percent. And we would
be more or less assured of converting
those concluded sales into transfers
and ultimately into cash.
Pipeline Business Uncertain
With the insecurity around the
mortgage situation, as well
as the general state of the
market, we now encounter a situation
where we have significant pipeline
business with a great deal of
uncertainty as to how much of
that pipeline will actually
convert into sales.
| As a result,
unlike previously, the
pipeline business is now
really no predictor of
incoming business. This
has caused a change in
thinking, and difference
in the way that we plan. |
REGIONAL
OVERVIEW
Western Cape
In the Western Cape, in
the Cape Town metropolitan
areas, PGP has managed
to survive and sustain
itself through prudent
business management and
the sensible allocation
of funds in terms of marketing,
agent training and recruitment.
| Highlights
have been the sustained
sales of properties
in the very top
end, mainly on the
Atlantic Seaboard,
to both local and
overseas buyers. |
|
 |
Distressed Sellers
When interest rates were relatively
high, we saw the number of distressed
sellers increase - and then
decrease when interest rates
reduced. We saw development
construction prices plummet,
however this had little effect
on the ability to develop due
to the difficulties in terms
of end-user finance.
Other Trends
Other trends that emerged included
that fact that a shortage of
schooling is preventing people
buying in some areas with the
Southern Suburbs of Cape Town
an example of that. Security
is more important than ever
and areas with poor security
record lack of demand.
Boland & Overberg
In the Boland and Overberg,
despite the difficult trading
conditions, the region has performed
very well, and is the one region,
which managed to exceed its
sales turnover budget for the
year-to-date, with Stellenbosch
and Somerset West in particular
the star achievers. However,
the coastal areas where a large
percentage of properties are
second homes were most affected
by the economic climate.
Gauteng
The Gauteng region of Pam Golding
Properties has emerged from
this period with an increased
market share in all areas in
which it operates. This year
the most active market segment
in Gauteng in terms of unit
sales has been in the price
range below R2million, while
the top end of the market -
in contrast to some other parts
of the country - has been in
the doldrums for most of the
year.
KwaZulu-Natal
KwaZulu-Natal was probably the
region most adversely affected
by the downturn sooner than
other regions - in fact some
five months ahead of the rest
of the country, probably due
to the high percentage of properties
that are coastal homes, that
fall into the leisure category.
Interestingly, this market has
also been the first one to show
signs of improvement. Turning
to South Africa’s Central
or inland areas, including the
smaller towns and areas in the
centre of the country, the downturn
in these markets has proved
the most severe and is not that
surprising, given the impact
of the global recession on the
manufacturing and mining sectors
which are located in these areas.
In addition to that, towns such
as Dullstroom and Clarens have
been affected by the decreased
leisure market.
Eastern Cape & Garden
Route
The Eastern Cape and Garden
Route region has proved to be
the most stable throughout the
past year, and while it has
not experienced very many highs
it has also not hit the lows
of other areas. In spite of
this, coastal land sales have
also been affected - in particular
areas like Jeffreys Bay, St
Francis and Port Alfred, which
have been struck by the lack
of leisure buyers. Areas which
buck the trend include Grahamstown
which, like Stellenbosch, has
benefited from the educational
components in the town.
South Africa Overall
From a South African market
perspective, in a year where
PGP has had to tighten its belt,
the group has come through these
tough trading conditions in
good shape and we hope to end
the year, for the 12 month period
ended February 2010 in having
achieved sales in excess of
R10 billion.
While these numbers are low
relative to the stellar performances
of prior years we are in fact
very pleased with these results
and in particular delighted
with the significant increase
in market share that we managed
to achieve and our dominant
share of voice in the minds
of SA consumers.
|
 |
Off
Shore Perspective
From an off-shore perspective,
PGP’s Indian Ocean
Islands division, servicing
Seychelles and Mauritius
has continued to perform
well.
Seychelles
As far as the Seychelles
is concerned we have sold
close to 270 properties
with a value in the region
of USD210 million and
in the last six months
have sold 21 properties
totalling USD15 million.
Seychelles - Eden
Island
This is primarily through
Eden Island, which is
the marina development
just off the mainland
of Mahé. As many
of these purchasers are
South Africans the recently
announced increased allowance
up from R2mil to R4mil
will hopefully give this
development and others
like it, an increased
boost.
Mauritius
As far as Mauritius is
concerned, in past six
months PGP successfully
sold 70 units to a value
of R250million in a new
RES (Real Estate Scheme)
in the Grand Baie area
and also concluded re-sales
to the value of R93mil
in at the Tamarina Golf
Estate and Beach Club,
which was the country’s
first Integrated Resort
Scheme (IRS). |
100% Plus Growth
Interestingly, almost all these
sellers who purchased off-plan
have seen capital growth in
excess of 100%, even in these
times. Looking forward, as the
market starts to improve we
believe Mauritius will continue
to be appealing for lifestyle
and security reasons.
A rand hedge investment, as
well as the opportunity to acquire
Mauritian residency and benefit
from the increased foreign exchange
allowance will add to the momentum
going forward.
United Kingdom
In the UK the housing market
is slowly recovering from its
two-year collapse and annual
house price inflation has turned
for the first time since March
2008, with house prices rising
in October for the sixth consecutive
month.
While the difficulties are far
from over, prime central London,
where PGP primarily focuses
in the UK, has over the past
couple of months, seen a resurgence.
Being a market that has always
been attractive to South Africans
looking to invest offshore and
diversify their property interests,
we expect this to improve in
terms of number of trades, and
we intend once again showcasing
prime central London product
to South Africans next year.
HOSPITALITY
Pam Golding Hospitality
(PGH) has had its best
12 months to date. Room
inventory across the country
has increased by about
6% and will increase by
a similar percentage in
the next 12 months.
This has, and will, translate
into increased demand
for the core activities
and services on offer
through PGH - including
the facilitation of transactions
in the hotel, lodge, guesthouse
and restaurant industry,
together with operator
procurement, raising of
finance and hotel feasibility
studies. |
 |
Pam Golding Hotels has recently
been awarded mandates regarding
a number of high profile hotel
investment opportunities in
Johannesburg and Cape Town,
as well as a prestigious mandate
to sell a portfolio of leading
boutique hotels and lodges situated
around South Africa.
Over the past five months to
date, Pam Golding Lodges and
Guesthouses has facilitated
nine transactions at a total
value of close to R50 million
– six concluded on behalf
of overseas investors and the
balance for South African upcountry
buyers.
During the past 15 months Pam
Golding Tourism and Hospitality
Consulting was awarded 22 assignments
and feasibility studies –
65% commissioned by international
hotel operators and/or investors.
Good news for South Africa’s
construction industry and job
creation is that these are now
being converted into real projects
representing an estimated capital
investment of R4.3 billion and
providing 2423 rooms and 2062
direct jobs.
LOOKING
AHEAD
Much has been said about green
shoots and a recovery in the
market. We have certainly seen
this in the last couple of months,
with significantly increased
volumes in the order of 20%
over the past six months. And
while prices have not, in our
view, moved into positive territory,
they certainly have halted their
decline.
We believe that while this improvement
is due to the relatively low
interest rate environment, a
general improvement in sentiment
and a very marginal loosening
of the taps in terms of bank
lending criteria, it is however
primarily due to sentiment and
the fact that people who have
the ability to transact primarily
on a cash basis are now prepared
to do so.
There is also the slow but steady
emergence of the first-mover,
investor buyer who is seeing
this as the opportunity to get
into the market ahead of the
pack.
We hope and are optimistic that
this upward trend will continue
through 2010 but of course the
major catalyst for the true
re-ignition of the residential
property market in SA will be
when the banks start to vigorously
lend again and actually compete
for business.
It is our hope that this will
begin in earnest towards the
end of the first quarter of
2010.
|
 |
SOCCER
WORLD CUP
One cannot talk about
2010 without mentioning
the Soccer World Cup and
I do think that this event
is going to be magnificent
in itself and truly a
once in a lifetime opportunity.
It’s going to put
the country on the world
stage and advertise South
Africa and by implication
its property opportunities
to a global audience,
really for the first time
on such a mammoth scale.
In some respects it is
an advertiser’s
dream and by implication
a property advertiser’s
dream. And while the short-term
effects of the tournament
in terms of business for
PGP as a property company
will be good, it is the
long term effect which
I am really excited about
and which I think will
have long-lasting and
positive benefits for
the property industry
in SA in years to come.
|
While sales to foreigners have
been relatively slow over the
past year, I anticipate that
once the world sees what SA
has to offer that the long-awaited
potential of direct foreign
investment into property might
well be realised over the next
10 years.
And we fully expect foreign
investment by way of property
to increase slowly and steadily
during the period after the
tournament.
INVESTMENT
HOTSPOTS
Highlighting a few investment
hotspots we think will be sought-after
in the year ahead.
Cape Town
Starting firstly with Cape Town,
coastal property is always sought
after - and in particular the
Atlantic Seaboard as well as
the West Coast of the Cape which
provides excellent value, while
Cape Town’s Southern Suburbs
remains a blue chip investment
area.
Boland and Overberg
In the Boland and Overberg,
most of the coastal towns from
Pringle Bay to Hermanus offer
good value due to the correction
of the market over the last
12 months.
KwaZulu-Natal
From a KwaZulu-Natal perspective,
Durban North, Umhlanga and Ballito
are important areas relative
to the new King Shaka International
Airport at La Mercy and an area
we believe worth watching.
Gauteng
From a Gauteng perspective,
apart from the usual aspects
in this region, the areas in
Johannesburg and Pretoria that
lie along the routes of the
state-of-the art new transport
infrastructure, including the
R20 billion Gauteng Rapid Rail
network and Johannesburg’s
Rapid Bus systems are certainly
areas that we think will outperform
the rest of the market this
year.
EXPECTATIONS
All in all, looking at 2010,
there is cautious optimism that
the market, both in terms of
volume and in terms of value,
will slowly but steadily improve
through the year.
Our expectation is for house
prices to remain flat for the
first half of the year and then
to increase by between five
and 10% in the second half of
the year with an ever-increasing
tempo in sales activity.
This is seen against the usual
backdrop of potential South
African issues, both in respect
of potential political uncertainty
as well as economic uncertainty
- and of course the proposed
Eskom tariff hike and concomitant
effect on inflation, which may
have a dampening effect on this
recovery.
Nevertheless we remain optimistic
and enthusiastic about the country,
about the residential property
market and in regard to Pam
Golding Properties.
| “We are
particularly proud of
our achievements this
year in tough conditions
and feel that the business
is well placed to capitalise
on the initiatives that
were undertaken this year,
and are looking forward
to 2010 with anticipation." |
|
|
|
|
|
| AVOID
INFORMATION OVERLOAD WHEN BUYING OR
SELLING PROPERTY |
|
 |
Never
before have consumers
had instant access to
such a massive array
of information –
mostly made available
through rapid advances
in new technology.
Selective to
Save Time
Yet, for most –
and that includes buyers
and sellers of property
– this means 'information
overload', and it's
coupled with an increasing
need to be selective
to save time, a precious
commodity in today's
fast-paced lifestyle,
says Dr Andrew Golding,
CE of the Pam Golding
Property group.
Alchemy
"Through fast access
to reliable communications,
the system, known as
'Alchemy', further enhances
the agent's efficiency
and service to clients,
allowing them to communicate
via email and sms with
both buyer and seller
- throughout the buying
cycle," says Dr
Golding.
CRM System |
"Essentially
a customer relationship
management system, the emphasis
is on keeping clients updated
with up to the minute information
that is tailored to suit
their own individual requirements.
“Whether it's show
day invitations, personalised
property portfolios, new
property releases, terms
of a mandate or relevant
information regarding recent
sales in the area, the communication
process is fast and available
for the client to view immediately,
or when convenient,"
he says.
Multiple Management
Systems
While it enables clients
to efficiently manage their
property requirements and
the kind of selective information
which each, individually,
wishes to receive, it also
enables PGP agents to manage
their property listings,
as well as create and print
their own marketing material,
among various other features.
Saves Time
& Promotes Interaction
Cheridan
Inglis, new media
manager for PGP comments:
"As 'Alchemy'
is database-linked,
agents can easily
pull information from
our database into
the new system, which
saves them more time
to spend on a face-to-face
consultative basis. |
Get
What you Want
Property information
conveyed to clients
in this way also allows
the buyer or seller
to click through directly
to the PGP website
for more details regarding
the featured property,
again saving them
time.
Web-Based
Anytime, Anywhere
A further feature
of the new system
is that being web-based,
it can be accessed
from anywhere in the
world, while a single
sign-on facility with
a unique password
provides for security.
Big Benefits
"The benefits
are already being
seen, with one of
our GoldClub Gauteng
agents reporting that
the first show day
invitation she sent
out immediately brought
in a buyer who signed
the deal. While technology
continues to evolve
at a rapid rate, what
remains unchanged
is our focus on providing
professional service
and maintaining personal
client relationships. |
|
| Example
of an email
to a buyer regarding
a brand new
property listing. |
|
| “It
makes sound sense
that our digital business
strategy continues
to focus on supporting
our agents with intelligent
tools to enhance,
not minimise, their
personal interaction
with clients,"
adds Inglis. |
|
|
|
|
|
|
|
|
 |
PGP
NORTHERN SUBURBS SHARES THE JOY OF GIVING |
|
|
As part of
the company’s “Joy of Giving”
campaign, staff and clients of Pam Golding
Properties’ (PGP) Northern Suburbs
region have opened their hearts ahead
of the festive season. |
|
|
|
| Pictured with some
of the PGP agents involved in the campaign
for House of Thembiso are (left) the institution’s
house mother Ria Pelser and (2nd from right)
fundraiser Sonja Vos. |
|
|
|
|
Corporate
Social Investment
The extended corporate social investment campaign
urges PGP agents and staff to identify worthy
causes in their areas that are in need of community
support.
Personal Donations
Agents not only make personal donations to these
causes, but also rally friends, family members,
clients and other local businesses to do the same.
More than 8500 facilities have already benefited
from the campaign countrywide.
Two
Local Institutions
PGP area manager for the Northern Suburbs, Maureen
Nel, says her agents chose to collect items for
two local institutions offering support and care
to some of the community’s most vulnerable
children.
Over 100 boxes were filled with items on their
wish lists, including clothing, toys, stationery
and cleaning equipment.
Alta du Toit School
The first beneficiary is the Alta du Toit School
situated in Kuils River. The school offers tuition
to children with severe intellectual disabilities
and draws learners from a wide variety of cultural
backgrounds. Says Nel, “These are children
who can neither cope with, nor benefit from, mainstream
education”.
Dedicated Teachers
They need specialist professionals who can help
each child to reach their fullest possible potential,
in a caring and nurturing environment. These dedicated
teachers work with each child at their own individual
pace, and help them progress as far as possible
according to their own unique abilities.
“They are encouraged to become as independent
as possible, so that they can function as self-supporting
adults who can readily engage in their communities.”
House of Thembiso
The second beneficiary of the campaign is
the House of Thembiso – a place of
safety for babies aged from birth to 12
months.
Situated in Langeberg Heights, it specifically
caters for special needs babies such as
those who are HIV positive or have physical
or mental disabilities.
Since 2007, the facility has nurtured over
40 babies. Nel says the children are cared
for until they are healthy enough to be
placed with suitable adoptive or foster
parents.
“These are children
who might otherwise fall through the cracks
in the system,” she says, “and
it is heart-warming to see the love and
care lavished on them at the House of Thembiso. |
‘Promise’
The word Thembiso means ‘promise’
in Xhosa, and that is precisely what this facility
offers - the promise of hope for the future and
a chance at a better life.”
|
| Staff and students
of the Alta du Toit School, pictured here
with some of the boxes donated by the PGP
Northern Suburbs team. |
|
To offer further
support or for more information on these
facilities, you can contact the Alta du
Toit School on +27 (0) 21 903
4178, and the House of Thembiso
on
+27 (0) 21 988 9567.
PGP area manager for the Northern
Suburbs, Maureen Nel, can be
reached here
or
+27 (0) 21 975 7209 |
|
|
| --------------------------------------------- |
|
|
|
|
