Land Reform Bill on Shelf
There has been vigorous debate recently concerning the government’s proposed Land Bill aimed at speeding up the land reform program in South Africa. Farmers and citizens alike can breathe a huge sigh of relief at news that the parliamentary committee has shelved the legislation, citing lack of consultation as the reason behind the decision and has said that the Bill will be reintroduced at a later date.
The government has said that it wants to redistribute nearly a third of white-owned farm land by 2014. At the end of Apartheid, almost 90% of South African land was owned by whites, who made up just 10% of the overall population at the time. So far, the land reform program has only succeeded in transferring 4% of this land to blacks.
Critics of the proposed legislation have argued that it would be unconstitutional, as it would prevent people from going to court should their property be taken. In fact, there are those who have argued that the expropriation could extend beyond agricultural property to all types of property, be it intellectual, commercial or personal.
The Land Bill was introduced by the ANC government in April this year and aimed to give the government greater powers to transfer land and property from existing owners. A committee statement said: “The decision [to shelve the bill] was reached after consultation with various stakeholders both within and outside parliament and in the interest of broader consultation and effective public participation”.
The government’s land restitution program is focused on returning land seized by whites after 1913 to the disenfranchised black population. However, earlier this year it was determined that the program had failed in its mandate. Thousands of claims are still being processed across the country for land and property that was taken unlawfully from black owners during the Apartheid era and before.
Farmers and civil society may well be pleased with the government’s decision to put the legislation on hold, but the reality remains that land redistribution continues to be a problem that needs to be addressed in South Africa. The government may have been stalled at this point, but no doubt there will be new legislation to follow.
The information in this article is courtesy of BBC News (“S Africa land reform bill shelved”, 27 August 2008).
Find property in Scarborough or Noordhoek in Cape Town's False Bay area.
Thursday, August 28, 2008
Tuesday, August 26, 2008
Green Building Phenomenon Takes Hold in SA
South Africa Going Green
Astute property developers, investors and entrepreneurs will no doubt already be aware of the next big era in the property, namely the profound impact that ‘green building’ practices are going to have on the industry in the foreseeable future. There are boundless business opportunities emerging as South Africa’s commercial property developers and investors join the bandwagon of what is fast-becoming a global phenomenon.
Building design is undergoing a transformation, moving away from work environments that are closed off from the outside world towards places of business designed to be at one with the natural surroundings. For instance, the power-draining air conditioners so often found in high-rise buildings and the shimmering glass towers that trap heat are set to become a thing of the past, as landlords and tenants demand real estate more reliant on renewable energy and reusable materials.
The recent IPD/Sapoa Property Investment Conference held in Cape Town recently focused primarily on the global trend towards constructing and refurbishing buildings along environmentally friendly lines. Delegates were informed that commercial property and the world’s airlines are two of the major contributors towards the production of dangerous carbon gas emissions destroying the earth’s ozone layer and as a result, contributing to the ever-looming global warming.
The South African real estate industry has only recently begun adopting green building standards, but the movement is expected to gain momentum. The Green Star Rating System is currently being introduced and although the ratings are not compulsory, pressure is anticipated to come from corporates, particularly those with international shareholders who want to be seen as socially and environmentally responsible.
According to the chairman of the Green Building Council of SA, Bruce Kerswill, “We in South Africa haven’t felt the sense of urgency on this yet. But we can expect to see stakeholder and government pressure here soon. South Africa has agreed to cut carbon emissions”. While some may not be inspired by the moral aspect, there is certainly a compelling business case for the greener option, with research showing that productivity can increase from about 5% to 15% with employees who work in a ‘green’ building.
Like all the healthier things in life, green buildings do tend to be on the expensive side when it comes to building and ultimately renting, however the cost is not quite as much as one might expect. For instance, in Australia a four-star building would cost the same as a non-green building in capital costs, while a five-star building requires more technology and would be around 5% extra in total cost. At 11% more for a six-star building, Kerswill believes this is “not a huge premium” to pay.
Buildings that promote the use of public transport rather than the use of private vehicles by being situated close to major transport nodes or because smaller cars get the best parking will earn more points than those that don’t. There is a huge emphasis on recycling and points are earned for sourcing local products rather than importing cheaper ones from elsewhere. There is another category that rewards “innovation” and this aims to “stimulate out of the box thinking” rather than simply adhering to the ratings.
Kerswill insists that this is not just a passing fad. Development director at Old Mutual Investment Group Property Investments, Brent Wilshire says that his organization has looked at their “top eight” buildings in a bid to identify areas to “make a difference”. He also produced some interesting figures indicating the extent to which these buildings ‘guzzle natural resources’. Just a 20% reduction in water use at these buildings alone would conserve enough water to fill 133 swimming pools every day.
“The important thing is you need to be able to measure then you can set targets,” Wiltshire says, highlighting the value of a green building rating system. “In our new assets, the green building principles are best practice. What is important is to get the right team in place. It’s about putting the philosophy in place upfront and making sure the team buys into it – it’s about an attitude”.
Managing director of IPD Occupiers and Management in the UK, Christopher Hedley indicates that corporate property will come under increased pressure and scrutiny for environmental performance and compliance. “Property investors face risks. Tenants will act and valuers will respond,” he says. He adds that as more green buildings come onto the market, they will start to get cheaper. “There is an increasing pressure to deliver. We have the need for accurate information. We’ve got to create monitoring and targets and need to be able to prove performance,” Hedley says.
The information in this article is courtesy of Jackie Cameron (“Making money in the new property era”, Realestateweb, 20 August 2008).
Property for sale in Noordhoek, False Bay.
Astute property developers, investors and entrepreneurs will no doubt already be aware of the next big era in the property, namely the profound impact that ‘green building’ practices are going to have on the industry in the foreseeable future. There are boundless business opportunities emerging as South Africa’s commercial property developers and investors join the bandwagon of what is fast-becoming a global phenomenon.
Building design is undergoing a transformation, moving away from work environments that are closed off from the outside world towards places of business designed to be at one with the natural surroundings. For instance, the power-draining air conditioners so often found in high-rise buildings and the shimmering glass towers that trap heat are set to become a thing of the past, as landlords and tenants demand real estate more reliant on renewable energy and reusable materials.
The recent IPD/Sapoa Property Investment Conference held in Cape Town recently focused primarily on the global trend towards constructing and refurbishing buildings along environmentally friendly lines. Delegates were informed that commercial property and the world’s airlines are two of the major contributors towards the production of dangerous carbon gas emissions destroying the earth’s ozone layer and as a result, contributing to the ever-looming global warming.
The South African real estate industry has only recently begun adopting green building standards, but the movement is expected to gain momentum. The Green Star Rating System is currently being introduced and although the ratings are not compulsory, pressure is anticipated to come from corporates, particularly those with international shareholders who want to be seen as socially and environmentally responsible.
According to the chairman of the Green Building Council of SA, Bruce Kerswill, “We in South Africa haven’t felt the sense of urgency on this yet. But we can expect to see stakeholder and government pressure here soon. South Africa has agreed to cut carbon emissions”. While some may not be inspired by the moral aspect, there is certainly a compelling business case for the greener option, with research showing that productivity can increase from about 5% to 15% with employees who work in a ‘green’ building.
Like all the healthier things in life, green buildings do tend to be on the expensive side when it comes to building and ultimately renting, however the cost is not quite as much as one might expect. For instance, in Australia a four-star building would cost the same as a non-green building in capital costs, while a five-star building requires more technology and would be around 5% extra in total cost. At 11% more for a six-star building, Kerswill believes this is “not a huge premium” to pay.
Buildings that promote the use of public transport rather than the use of private vehicles by being situated close to major transport nodes or because smaller cars get the best parking will earn more points than those that don’t. There is a huge emphasis on recycling and points are earned for sourcing local products rather than importing cheaper ones from elsewhere. There is another category that rewards “innovation” and this aims to “stimulate out of the box thinking” rather than simply adhering to the ratings.
Kerswill insists that this is not just a passing fad. Development director at Old Mutual Investment Group Property Investments, Brent Wilshire says that his organization has looked at their “top eight” buildings in a bid to identify areas to “make a difference”. He also produced some interesting figures indicating the extent to which these buildings ‘guzzle natural resources’. Just a 20% reduction in water use at these buildings alone would conserve enough water to fill 133 swimming pools every day.
“The important thing is you need to be able to measure then you can set targets,” Wiltshire says, highlighting the value of a green building rating system. “In our new assets, the green building principles are best practice. What is important is to get the right team in place. It’s about putting the philosophy in place upfront and making sure the team buys into it – it’s about an attitude”.
Managing director of IPD Occupiers and Management in the UK, Christopher Hedley indicates that corporate property will come under increased pressure and scrutiny for environmental performance and compliance. “Property investors face risks. Tenants will act and valuers will respond,” he says. He adds that as more green buildings come onto the market, they will start to get cheaper. “There is an increasing pressure to deliver. We have the need for accurate information. We’ve got to create monitoring and targets and need to be able to prove performance,” Hedley says.
The information in this article is courtesy of Jackie Cameron (“Making money in the new property era”, Realestateweb, 20 August 2008).
Property for sale in Noordhoek, False Bay.
Friday, August 15, 2008
The Latest on Interest Rates in South Africa
Tito's property crash "cushion"
Realestateweb.co.za reporter
14 August 2008
Interest rates remain on hold, but property market has "yet to bottom", warns bank.
SA Reserve Bank governor Tito Mboweni's announcement on Thursday that the key monetary policy interest rate will be left where it is for now, at 12%, is good news for debt-burdened consumers in general.
But those businesses relying on renewed enthusiasm for consumer spending - particularly in the residential real estate sector - shouldn't break out the Champagne just yet.
Property prices and levels of activity in the residential market are expected to get worse and are unlikely to pick up until the middle part of next year, is the prediction from Absa's senior property analyst Jacques du Toit.
Shortly after Mboweni's announcement, Du Toit issued a note cautioning that the "residential market has yet to bottom".
He said the "severe financial strain" caused by surging inflation, higher interest rates and declining real household disposable income growth would continue to negatively influence the affordability of housing. That in turn means less demand for housing.
The prime interest rate charged to the average bank customer is around 15% - about 5% higher than two years ago and has had the effect of pushing up home loan repayments by more than 35%.
"In real terms house prices are expected to decline for the first time this year since 1999, with the possibility of another real price drop in 2009," said the property expert.
"With economic conditions expected to improve in the second half of next year on the back of declining inflation and interest rates, the residential property market is set to recover shortly afterwards," added Du Toit.
Other market watchers are more optimistic, with the expectation in some quarters that buyers who have been waiting on the sidelines to purchase homes will do so soon, now that it looks like interest rates may have peaked or are close to peaking.
Provided there are no more economic shocks - like even higher oil prices - South Africa can expect interest rates to start ticking down from the end of the year, as has been predicted by top economist Cees Bruggemans of FNB (read Interest rates to fall fast - top economist).
Many consumers will be relieved that their debt repayments have not been increased yet again from unbearable levels
Mboweni warned, though, when he announced his decision to keep the repo rate at 12%, that "we're not out of the woods yet" when it comes to various economic "risks".
He cited the "subdued" housing market as well as a dramatic drop-off in sales in car sales among the reasons for his decision to keep rates where they are.
Herschel Jawitz, chief executive officer of Jawitz Properties, said: "While the decision will obviously not give any relief to homeowners who remain under financial pressure, it will certainly start to stem the tide of falling sentiment.
"Recently, there has been some good news with a drop in the petrol price, a stay on rates, no power outages and the possibility of a settlement in Zimbabwe. This is a far cry from where we were four months ago," he said.
Jawitz noted that, aside from the financial factors like interest rates and consumer prices, sentiment plays a huge part in the residential market.
"We may be nearing the bottom of the property market. It's not certain when the turn will come but at least we will have bottomed out," he added.
Jenny Dugmore, director of Colliers Residential Dugmore, agreed, saying: "This signifies the beginning of an economic turnaround, and will have a significant impact on sentiment."
Jeanne van Jaarsveldt, marketing and finance director of RE/MAX of South Africa, described the interest rate decision as the "first, but small, step toward a property market recovery."
He expects "little effect" on property sales but "does believe it will "lift some of the clouds overhanging property sales and introduce much needed rebuilding of confidence in property ownership, especially among investors".
"The coupling of still too high interest rates and tight credit restrictions will continue to hamstring first time buyers," said Van Jaarsveldt.
Dr Andrew Golding, chief executive officer of the Pam Golding Property Group, said: "From a residential property market perspective it is evident that while the National Credit Act has bedded down in terms of curbing credit, it takes quite some length of time for the stringent measures of higher interest rates to filter through and take effect."
It is likely, added Golding, "that we shall still be experiencing these (effects) for some time to come".
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.noordhoekproperties.co.za or www.coastalrealestate.co.za.
Realestateweb.co.za reporter
14 August 2008
Interest rates remain on hold, but property market has "yet to bottom", warns bank.
SA Reserve Bank governor Tito Mboweni's announcement on Thursday that the key monetary policy interest rate will be left where it is for now, at 12%, is good news for debt-burdened consumers in general.
But those businesses relying on renewed enthusiasm for consumer spending - particularly in the residential real estate sector - shouldn't break out the Champagne just yet.
Property prices and levels of activity in the residential market are expected to get worse and are unlikely to pick up until the middle part of next year, is the prediction from Absa's senior property analyst Jacques du Toit.
Shortly after Mboweni's announcement, Du Toit issued a note cautioning that the "residential market has yet to bottom".
He said the "severe financial strain" caused by surging inflation, higher interest rates and declining real household disposable income growth would continue to negatively influence the affordability of housing. That in turn means less demand for housing.
The prime interest rate charged to the average bank customer is around 15% - about 5% higher than two years ago and has had the effect of pushing up home loan repayments by more than 35%.
"In real terms house prices are expected to decline for the first time this year since 1999, with the possibility of another real price drop in 2009," said the property expert.
"With economic conditions expected to improve in the second half of next year on the back of declining inflation and interest rates, the residential property market is set to recover shortly afterwards," added Du Toit.
Other market watchers are more optimistic, with the expectation in some quarters that buyers who have been waiting on the sidelines to purchase homes will do so soon, now that it looks like interest rates may have peaked or are close to peaking.
Provided there are no more economic shocks - like even higher oil prices - South Africa can expect interest rates to start ticking down from the end of the year, as has been predicted by top economist Cees Bruggemans of FNB (read Interest rates to fall fast - top economist).
Many consumers will be relieved that their debt repayments have not been increased yet again from unbearable levels
Mboweni warned, though, when he announced his decision to keep the repo rate at 12%, that "we're not out of the woods yet" when it comes to various economic "risks".
He cited the "subdued" housing market as well as a dramatic drop-off in sales in car sales among the reasons for his decision to keep rates where they are.
Herschel Jawitz, chief executive officer of Jawitz Properties, said: "While the decision will obviously not give any relief to homeowners who remain under financial pressure, it will certainly start to stem the tide of falling sentiment.
"Recently, there has been some good news with a drop in the petrol price, a stay on rates, no power outages and the possibility of a settlement in Zimbabwe. This is a far cry from where we were four months ago," he said.
Jawitz noted that, aside from the financial factors like interest rates and consumer prices, sentiment plays a huge part in the residential market.
"We may be nearing the bottom of the property market. It's not certain when the turn will come but at least we will have bottomed out," he added.
Jenny Dugmore, director of Colliers Residential Dugmore, agreed, saying: "This signifies the beginning of an economic turnaround, and will have a significant impact on sentiment."
Jeanne van Jaarsveldt, marketing and finance director of RE/MAX of South Africa, described the interest rate decision as the "first, but small, step toward a property market recovery."
He expects "little effect" on property sales but "does believe it will "lift some of the clouds overhanging property sales and introduce much needed rebuilding of confidence in property ownership, especially among investors".
"The coupling of still too high interest rates and tight credit restrictions will continue to hamstring first time buyers," said Van Jaarsveldt.
Dr Andrew Golding, chief executive officer of the Pam Golding Property Group, said: "From a residential property market perspective it is evident that while the National Credit Act has bedded down in terms of curbing credit, it takes quite some length of time for the stringent measures of higher interest rates to filter through and take effect."
It is likely, added Golding, "that we shall still be experiencing these (effects) for some time to come".
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.noordhoekproperties.co.za or www.coastalrealestate.co.za.
Wednesday, August 13, 2008
FNB Responds to Ombudsman's Public Criticism
FNB Discusses Reasons for Withdrawal of Home Loan Approvals
Recently, it was reported that the Ombudsman for Banking Services fired a warning shot at FNB for its decision to withdraw home loan approvals on a large scale. An article by Realestateweb discusses the bank’s reaction to a “frank” meeting with the Ombudsman, in a bid to clarify which home loans are to be pulled.
A Big Four bank, FNB has assured developers that it will try and help those who are in financial trouble as it withdraws loan approvals for properties under construction. It also said that it will not reassess recently approved home loans that would normally take three to four months to register.
These assurances come in the wake of a “frank” meeting with the Banking Ombudsman, who recently fired a public warning at the bank, which has largely been seen as an unprecedented move. FNB’s decision to withdraw home loans on a large scale, as reported in an earlier article, will have major implications for developers, intermediaries and other players in the residential property industry.
After meeting with the Ombudsman, advocate Clive Pillay, the bank said that its “original statement on its reassessment decision may not have been clear and may have inadvertently caused unnecessary confusion and concern”. It went on to say that FNB and Pillay have since “agreed that the bank’s criteria, as now spelt out, for reassessing home loans approved in principle more than a year ago are ‘fair and equitable’”.
According to FNB, the home loan applications to be reassessed are those that take up to a year or longer to register and are of a development-type nature (excluding building bonds), not those that usually take three to four months for transfer and registration. Its intention is to “prevent customers from taking on more debt they are unable to service, resulting in an over-indebtedness position”.
The bank will only reassess applications should the following criteria apply:
- Where FNB guarantees have not already been issued;
- Any judgments or defaults evident with credit bureaus arise between the original granting of the home loan and prior to registration of the property;
- Customers confirm they are unable to afford the home loan subsequent to the original approval.
Each home loan will be reassessed “on a one-on-one basis with the intention of granting final approval for as many of the affected customers as possible. The bank will only decline applicants in cases where the client will be severely over-indebted should the transaction go ahead,” the bank said.
Customers who failed to provide their updated financial information are required to confirm their intention to go forward with the deal, otherwise FNB will contact each of the identified customers with the intention to proceed with the home loan, unless any of the above criteria are applicable.
Also, FNB is aware of the “impact its decision may have on any one developer and their financial institutions and will accordingly engage with them to find an amicable solution to mitigate any undue losses that may arise”.
The information in this article is courtesy of Realestateweb (“FNB: most new home loans “safe”, 12 August 2008).
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.capetownpropertyinfo.co.za or www.falsebayproperty.co.za.
Recently, it was reported that the Ombudsman for Banking Services fired a warning shot at FNB for its decision to withdraw home loan approvals on a large scale. An article by Realestateweb discusses the bank’s reaction to a “frank” meeting with the Ombudsman, in a bid to clarify which home loans are to be pulled.
A Big Four bank, FNB has assured developers that it will try and help those who are in financial trouble as it withdraws loan approvals for properties under construction. It also said that it will not reassess recently approved home loans that would normally take three to four months to register.
These assurances come in the wake of a “frank” meeting with the Banking Ombudsman, who recently fired a public warning at the bank, which has largely been seen as an unprecedented move. FNB’s decision to withdraw home loans on a large scale, as reported in an earlier article, will have major implications for developers, intermediaries and other players in the residential property industry.
After meeting with the Ombudsman, advocate Clive Pillay, the bank said that its “original statement on its reassessment decision may not have been clear and may have inadvertently caused unnecessary confusion and concern”. It went on to say that FNB and Pillay have since “agreed that the bank’s criteria, as now spelt out, for reassessing home loans approved in principle more than a year ago are ‘fair and equitable’”.
According to FNB, the home loan applications to be reassessed are those that take up to a year or longer to register and are of a development-type nature (excluding building bonds), not those that usually take three to four months for transfer and registration. Its intention is to “prevent customers from taking on more debt they are unable to service, resulting in an over-indebtedness position”.
The bank will only reassess applications should the following criteria apply:
- Where FNB guarantees have not already been issued;
- Any judgments or defaults evident with credit bureaus arise between the original granting of the home loan and prior to registration of the property;
- Customers confirm they are unable to afford the home loan subsequent to the original approval.
Each home loan will be reassessed “on a one-on-one basis with the intention of granting final approval for as many of the affected customers as possible. The bank will only decline applicants in cases where the client will be severely over-indebted should the transaction go ahead,” the bank said.
Customers who failed to provide their updated financial information are required to confirm their intention to go forward with the deal, otherwise FNB will contact each of the identified customers with the intention to proceed with the home loan, unless any of the above criteria are applicable.
Also, FNB is aware of the “impact its decision may have on any one developer and their financial institutions and will accordingly engage with them to find an amicable solution to mitigate any undue losses that may arise”.
The information in this article is courtesy of Realestateweb (“FNB: most new home loans “safe”, 12 August 2008).
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.capetownpropertyinfo.co.za or www.falsebayproperty.co.za.
Sunday, August 10, 2008
South Africa Going Green
An Engineering News article has drawn attention to the recent trend in South Africa where property investors are set to place more emphasis on green building. This comes after the United Nations identified property development as one of the primary contributors to global warming.
According to the UN, buildings consume between 40% and 50% of the world’s energy, 30% of raw materials and 20% of its water resources. However, it has also been identified as the one sector that has the potential to make the biggest impact on reducing energy consumption.
The adoption of green building practices, such as water recycling, solar heating, more energy-efficient air conditioning systems, could reduce energy consumption from 30% up to 70%. The property development sector’s unique position to effectively reduce the effects of climate change suggests that corporate property will now come under increased scrutiny for environmental performance.
IPD Occupiers UK director, Christopher Hedley addressed delegates at the sixth annual IPD/Sapoa Property Investment Conference held in Cape Town last week and explained that not many property investors were now tackling the issue of green building, as they placed more emphasis on investment returns than environmental sustainability.
In fact, statistics revealed that just half of property investment companies in South Africa were addressing the issue of climate change and green building. However, things are soon to change, as property investors will begin to receive pressure for greener buildings from tenants, governments and stakeholders, pushing them to integrate environmental sustainability into their future investment projects.
Old Mutual Property Investments business development executive, Brent Wilshire agreed with Hedley and argued that investors should think of climate change as a market transition, rather than an environmental issue. He added that it was essential for property investors to integrate green building practices into their investment portfolios because energy and utility costs are set to “explode”, infrastructure will be scarcer and the South African government may introduce green legislation in the future.
The green building initiative has been gathering momentum around the globe for the past five years. According to Bruce Kerswill, executive chairperson of the Green Building Council of South Africa, the real impetus for this initiative has been global warming. South Africa has not received the same pressure as other world nations to tackle the issue and is thus lagging behind the rest of the world in terms of implementing green building practices.
The recent electricity supply crisis in the country has given the green building movement in South Africa a push in the right direction, as this has forced property owners to seek out new ways of conserving energy in building techniques. Another factor playing an important role is that large multinational tenants have now started to demand environmentally friendly buildings and are willing to pay a premium to lease them, said Kerswill.
Also, Kerswill explained that the growing operational costs of transitional buildings have ensured that green building continues to gain in popularity. The operational costs of green buildings are significantly less, which is due to the lower electricity and water consumption, so the construction of such buildings is increasingly being seen as a better alternative in the long term.
The information in this article is courtesy of Jade Davenport (“Property investors urged to place more emphasis on green building”, Engineering News, 8 August 2008).
Visit www.noordhoekproperties.co.za or www.scarboroughproperty.co.za if you would like to buy or sell property in Cape Town's False Bay area.
According to the UN, buildings consume between 40% and 50% of the world’s energy, 30% of raw materials and 20% of its water resources. However, it has also been identified as the one sector that has the potential to make the biggest impact on reducing energy consumption.
The adoption of green building practices, such as water recycling, solar heating, more energy-efficient air conditioning systems, could reduce energy consumption from 30% up to 70%. The property development sector’s unique position to effectively reduce the effects of climate change suggests that corporate property will now come under increased scrutiny for environmental performance.
IPD Occupiers UK director, Christopher Hedley addressed delegates at the sixth annual IPD/Sapoa Property Investment Conference held in Cape Town last week and explained that not many property investors were now tackling the issue of green building, as they placed more emphasis on investment returns than environmental sustainability.
In fact, statistics revealed that just half of property investment companies in South Africa were addressing the issue of climate change and green building. However, things are soon to change, as property investors will begin to receive pressure for greener buildings from tenants, governments and stakeholders, pushing them to integrate environmental sustainability into their future investment projects.
Old Mutual Property Investments business development executive, Brent Wilshire agreed with Hedley and argued that investors should think of climate change as a market transition, rather than an environmental issue. He added that it was essential for property investors to integrate green building practices into their investment portfolios because energy and utility costs are set to “explode”, infrastructure will be scarcer and the South African government may introduce green legislation in the future.
The green building initiative has been gathering momentum around the globe for the past five years. According to Bruce Kerswill, executive chairperson of the Green Building Council of South Africa, the real impetus for this initiative has been global warming. South Africa has not received the same pressure as other world nations to tackle the issue and is thus lagging behind the rest of the world in terms of implementing green building practices.
The recent electricity supply crisis in the country has given the green building movement in South Africa a push in the right direction, as this has forced property owners to seek out new ways of conserving energy in building techniques. Another factor playing an important role is that large multinational tenants have now started to demand environmentally friendly buildings and are willing to pay a premium to lease them, said Kerswill.
Also, Kerswill explained that the growing operational costs of transitional buildings have ensured that green building continues to gain in popularity. The operational costs of green buildings are significantly less, which is due to the lower electricity and water consumption, so the construction of such buildings is increasingly being seen as a better alternative in the long term.
The information in this article is courtesy of Jade Davenport (“Property investors urged to place more emphasis on green building”, Engineering News, 8 August 2008).
Visit www.noordhoekproperties.co.za or www.scarboroughproperty.co.za if you would like to buy or sell property in Cape Town's False Bay area.
Thursday, August 7, 2008
South African Building Soon to Go Green
SA Soon to Have Green Star Rating Tool
An Engineering News article draws attention to the expected launch of South Africa’s green building rating tool in Cape Town in November. The Green Star rating tool will be launched at the inaugural Green Building Council of South Africa (GBCSA) convention and exhibition.
The rating tool applies to green building in offices and will be followed by specific tools that apply to retail, multi-unit residential and other building types, in order of market demand. Part of the GBCSA’s mandate is the running of its first Green Star SA Accredited Professional Course on November 5 this year, which is after the close of the main convention.
Established in 2007, the GBCSA recently launched for general membership and is an emerging member of the World Green Building Council. The council’s mission is the promotion of green building practice, to act as a resource centre for the industry, the development and operation of the green building rating system and the provision of training and education to ensure developers and investors are quickly brought up to speed on the various practices, this according to Bruce Kerswill, chairperson for the GBCSA.
The Green Star rating tools have been adapted from the rating system in Australia and similar tools have marked the mainstream adoption of green building in a number of markets overseas, which would be a crucial step in the GBCSA’s mission in South Africa, the council indicated.
The accreditation of new and refurbished developments in line with green building practices is a challenge that has already been taken up by property developers and investors around the globe, which is due largely to the demand from tenants for more productive spaces.
According to Kerswill, “The challenge to the South African commercial and industrial development industry is to see how quickly and effectively they are able to embrace the need for green accreditation”. The council noted that, “Detailed, practical guidance on green building techniques will also be showcased as a key element of the convention, using both local and international case studies”.
There are a number of international speakers lined up for the convention, including Che Wall, past chairperson of the World Green Building Council and managing director of Lincolne Scott, a building services consultancy practicing in Australia and Asia Pacific; Richard Fedrizzi, president, CEO and founding chairperson of the US Green Building Council; as well as Andrew Borger, managing director of Leighton Properties, who will have key members of his consulting team to present a case study on the 5 Star Green Star project in Queensland.
Speakers specializing locally include Indresen Pillay, managing director of Davis Langdon SA and a member of the same company’s global international Sustainability Group, who is scheduled to discuss the costs involved with green building. The GBCSA will also present a range of green building technologies, products and services, alongside the convention.
The information in this article is courtesy of Christy van der Merwe (“Green building rating tool to be launched in November”, Engineering News, 5 August 2008).
Visit www.simonstownproperties.co.za or www.noordhoekproperties.co.za if you would like to buy or sell property in Cape Town's False Bay region.
An Engineering News article draws attention to the expected launch of South Africa’s green building rating tool in Cape Town in November. The Green Star rating tool will be launched at the inaugural Green Building Council of South Africa (GBCSA) convention and exhibition.
The rating tool applies to green building in offices and will be followed by specific tools that apply to retail, multi-unit residential and other building types, in order of market demand. Part of the GBCSA’s mandate is the running of its first Green Star SA Accredited Professional Course on November 5 this year, which is after the close of the main convention.
Established in 2007, the GBCSA recently launched for general membership and is an emerging member of the World Green Building Council. The council’s mission is the promotion of green building practice, to act as a resource centre for the industry, the development and operation of the green building rating system and the provision of training and education to ensure developers and investors are quickly brought up to speed on the various practices, this according to Bruce Kerswill, chairperson for the GBCSA.
The Green Star rating tools have been adapted from the rating system in Australia and similar tools have marked the mainstream adoption of green building in a number of markets overseas, which would be a crucial step in the GBCSA’s mission in South Africa, the council indicated.
The accreditation of new and refurbished developments in line with green building practices is a challenge that has already been taken up by property developers and investors around the globe, which is due largely to the demand from tenants for more productive spaces.
According to Kerswill, “The challenge to the South African commercial and industrial development industry is to see how quickly and effectively they are able to embrace the need for green accreditation”. The council noted that, “Detailed, practical guidance on green building techniques will also be showcased as a key element of the convention, using both local and international case studies”.
There are a number of international speakers lined up for the convention, including Che Wall, past chairperson of the World Green Building Council and managing director of Lincolne Scott, a building services consultancy practicing in Australia and Asia Pacific; Richard Fedrizzi, president, CEO and founding chairperson of the US Green Building Council; as well as Andrew Borger, managing director of Leighton Properties, who will have key members of his consulting team to present a case study on the 5 Star Green Star project in Queensland.
Speakers specializing locally include Indresen Pillay, managing director of Davis Langdon SA and a member of the same company’s global international Sustainability Group, who is scheduled to discuss the costs involved with green building. The GBCSA will also present a range of green building technologies, products and services, alongside the convention.
The information in this article is courtesy of Christy van der Merwe (“Green building rating tool to be launched in November”, Engineering News, 5 August 2008).
Visit www.simonstownproperties.co.za or www.noordhoekproperties.co.za if you would like to buy or sell property in Cape Town's False Bay region.
Monday, August 4, 2008
Things to Know Before You Buy Property
Owning Property Can Be Expensive
An article published on the property iafrica website indicates that the there is more than meets the eye when it comes to owning property. The current gap between asking prices and selling prices continues to widen, but while this may create more value for money investment opportunities in the residential property market, it does not necessarily mean that you can afford to buy that dream home. This is because the cost of home ownership could be a lot more than you might think.
Marketing director at Betterbond, Deon Lessing says that many people renting property often think that they could easily buy a home and pay the money that would have gone towards rent as their monthly bond. “But what prospective buyers need to understand is that the true cost of home ownership involves a lot more than just a monthly bond payment,” he adds. “Underestimating the true costs of owning and maintaining a house and the land on which it sits is one mistake first-time buyers often make,” Lessing asserts.
Putting interest rate increases aside; there are a number of expenses that homeowners need to take into consideration:
Homeowners insurance: This is a prerequisite when it comes to applying for a home loan. Homeowners insurance cover (HOC) protects owners of property from damage caused to the actual building and all the fixtures and fittings therein. The cover includes fire damage, lightning, explosions, storms, earthquakes, water, hail and even accidental damage to sinks, toilet bowls or other sanitary ware.
Rates and taxes/levies: Homes that are free-standing are subject to rates and taxes determined by the municipality, which cover the collection of rubbish, electricity and water, while sectional title units or complexes charge each unit a levy to cover these costs. Often these levies may include water, but exclude electricity.
Household contents insurance: While this form of insurance is optional, it covers all your personal belongings contained in your home and with the ever-increasing level of crime in South Africa, many households opt for this kind of insurance cover.
Security: Putting in burglar bars or paying an alarm company to fit a security system linked to armed response is considered a necessity, even if your home is located within a security complex.
Maintenance costs: When you own a home, it becomes your responsibility to take care of all the repair work and maintenance costs. There will no longer be a landlord to help you on this. While the cost of maintaining your home may vary depending on the size, Lessing suggests that putting aside R1000 a month is generally a good average amount. Remember that if you do not keep up with the maintenance then the costs could grow exponentially. A house that is in less than perfect condition tends to be on the market longer and sells for less than a house that has been impeccably maintained. Other areas of a home that require maintenance include the garden, swimming pool, painting, carpet repair and replacement, as well as other incidentals that are bound to come up through the ownership cycle.
According to Lessing, “When calculating your total cost of home ownership, you should add up to 40 percent to your base bond payment and that is the amount that you will eventually have to pay. The best way to be ready for the cost of owning and maintaining your home is to plan for it”.
The information in this article is courtesy of Property iAfrica (“True cost of ownership”, 4 August 2008).
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.falsebayproperty.co.za or www.coastalrealestate.co.za.
An article published on the property iafrica website indicates that the there is more than meets the eye when it comes to owning property. The current gap between asking prices and selling prices continues to widen, but while this may create more value for money investment opportunities in the residential property market, it does not necessarily mean that you can afford to buy that dream home. This is because the cost of home ownership could be a lot more than you might think.
Marketing director at Betterbond, Deon Lessing says that many people renting property often think that they could easily buy a home and pay the money that would have gone towards rent as their monthly bond. “But what prospective buyers need to understand is that the true cost of home ownership involves a lot more than just a monthly bond payment,” he adds. “Underestimating the true costs of owning and maintaining a house and the land on which it sits is one mistake first-time buyers often make,” Lessing asserts.
Putting interest rate increases aside; there are a number of expenses that homeowners need to take into consideration:
Homeowners insurance: This is a prerequisite when it comes to applying for a home loan. Homeowners insurance cover (HOC) protects owners of property from damage caused to the actual building and all the fixtures and fittings therein. The cover includes fire damage, lightning, explosions, storms, earthquakes, water, hail and even accidental damage to sinks, toilet bowls or other sanitary ware.
Rates and taxes/levies: Homes that are free-standing are subject to rates and taxes determined by the municipality, which cover the collection of rubbish, electricity and water, while sectional title units or complexes charge each unit a levy to cover these costs. Often these levies may include water, but exclude electricity.
Household contents insurance: While this form of insurance is optional, it covers all your personal belongings contained in your home and with the ever-increasing level of crime in South Africa, many households opt for this kind of insurance cover.
Security: Putting in burglar bars or paying an alarm company to fit a security system linked to armed response is considered a necessity, even if your home is located within a security complex.
Maintenance costs: When you own a home, it becomes your responsibility to take care of all the repair work and maintenance costs. There will no longer be a landlord to help you on this. While the cost of maintaining your home may vary depending on the size, Lessing suggests that putting aside R1000 a month is generally a good average amount. Remember that if you do not keep up with the maintenance then the costs could grow exponentially. A house that is in less than perfect condition tends to be on the market longer and sells for less than a house that has been impeccably maintained. Other areas of a home that require maintenance include the garden, swimming pool, painting, carpet repair and replacement, as well as other incidentals that are bound to come up through the ownership cycle.
According to Lessing, “When calculating your total cost of home ownership, you should add up to 40 percent to your base bond payment and that is the amount that you will eventually have to pay. The best way to be ready for the cost of owning and maintaining your home is to plan for it”.
The information in this article is courtesy of Property iAfrica (“True cost of ownership”, 4 August 2008).
If you would like to buy or sell property in Cape Town's False Bay area, please visit www.falsebayproperty.co.za or www.coastalrealestate.co.za.
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