During the financial year ended February 2008 a leading SA property group achieved record sales turnover of R21bn.

This includes transactions concluded by all operations, including the residential and commercial arms.

Dr Andrew Golding, chief executive of the Pam Golding Property (PGP) group, says this performance was achieved despite the dampening effect of the National Credit Act (NCA) which was implemented on 1 June 2007 coupled with rising interest rates, as well as the energy crisis and political uncertainty during the final quarter of the financial year.

"All regions and operations performed well and the group concluded transactions for 26,000 clients," says Dr Golding.

The group's residential sales comprised R18bn, reflecting growth of 9% over the previous financial year. The company's average house price was R1,4m, up from R1,1m last year. While a large number of residential sales were in the R1m to R2m price bracket, the bulk of homes sold were priced between R1m and R6m. An increasing number of transactions took place in the R20m plus price range, with sales of properties of R35m to R40m not uncommon.

While sales to overseas buyers represented only 3% of total residential units sold by PGP, these were to purchasers from some 26 countries around the globe, with the bulk of sales to British buyers, followed by those from America, Germany, Holland, Belgium and France.

"This still represents an extremely low level of sales to foreign buyers and it is noteworthy that an increasing number of these are seeking to relocate permanently to South Africa. It is interesting to see the increasing demand among American buyers, and following our successful international property exhibitions held in Russia, China and India last year (2007) we are also experiencing growing interest from those countries," Golding says.

A recent highlight in the Gauteng region was the launch of La Residence, a R1,6bn prestige residential development in the heart of Sandton, with R300m in off-plan sales achieved before the turning of the first sod. This will be followed next month (May) with the launch of a new, close to R1bn, luxury residential development in Pretoria where prices will range between R25k and R35k a square metre.

For investors the areas in Gauteng to watch are those in close proximity to the Gautrain stations, as well as areas of Johannesburg being rezoned with a view to creating a higher density of housing. This is evident in areas such as Hyde Park where one acre plots are being converted to cluster housing.

In the Western Cape and in the Cape Town metropolitan area PGP reported a high level of confidence in the top end of the market with cash or low loan to value sales dominating, as well as marked movement among families relocating from Gauteng to Cape Town.

In prime, sought after areas such as the Atlantic Seaboard and Southern Suburbs sales over R12m remain strong, with top prices of R16,5m for a home and R6m for a single residential stand achieved in Camps Bay, and more recently two homes in Bishopscourt and Constantia Upper sold for R19m each.

Gauteng buyers are similarly showing increasing interest in the Western Cape Boland and Overberg regions, particularly areas such as Stellenbosch, Paarl and Somerset West, with the emphasis on security developments and golf course estates.

Top prices are also being achieved with recent sales including the highest priced residential property sold for R8,5m in Stellenbosch, an Arniston beachfront property which fetched just over R7m and two lifestyle smallholdings sold for in excess of R30m each.

In the Central or inland regions, PGP reported an ongoing, steady demand for homes under R1m, particularly areas such as the East Rand, as well as a trend towards higher prices being achieved for land and agricultural properties.

Notable sales included a Bela Bela game farm sold for R9,5m and residential game farm estate sold for R14m, while PGP also concluded a R21m farm restitution sale and farm reform sale of R18,8m, as well as a R15m transaction for prime land for development in White River.

Growth shown by many of the smaller towns reflects an increasing trend towards decentralisation. Examples include the Lydenburg/Burgersfort area which has mushroomed as a result of the platinum mines, and Klerksdorp and Krugersdorp which have expanded due to the gold mines - thereby creating an increasing demand for homes.

The KwaZulu-Natal region continues to reflect a strong demand for homes in the north and south coast areas, with the forthcoming King Shaka International Airport and Dube TradePort at La Mercy already beginning to have a major positive impact on both the residential and commercial property market in the area.

The company reports growing interest in the central city area, further boosted by the Urban Redevelopment Programme. In addition, the company recently concluded a transaction for R12,5m, an excellent residential price for the Berea/Morningside area. Hot areas to watch in the coming year are the Durban beachfront and CBD as investors are confident regarding plans to upgrade and redevelop these areas.

Despite the current trading conditions, the Eastern Cape and Garden Route regions continue to reflect strong lifestyle appeal for home buyers as well as significant growth in wildlife entities i.e. game reserves and eco-tourism on a similar if not greater scale than that of the Kruger National Park.

Industrial growth in the region is underpinned by the ports and the strategic growth nodes of East London and Port Elizabeth - particularly the latter with its sizeable government investment - are experiencing an influx of businesses and those seeking homes. Areas receiving interest from upcountry investors and those relocating are mainly in the vicinity of larger centres such as these as well as Knysna, George, Mossel Bay and Plettenberg Bay.

Pam Golding Commercial concluded sales of R3bn for the financial year, incorporating transactions through leasing and sales, commercial auctions, international investments and the hospitality division.

Highlights include the auction of Mount Richmore Village Estate near Salt Rock, KwaZulu-Natal for R50m and sales to date to the value of R70 million at Bridge City, a R4bn mixed use shopping and residential centre development in KwaZulu-Natal.

Pam Golding Hotels facilitated a number of hotel transactions amounting to R540m. They are also currently engaged in the facilitation of seven new hotels throughout South Africa as well as various mixed use developments; Pam Golding Lodges and Guesthouses facilitated R134m of sales with a strong demand among foreigners.

The newly created Pam Golding Hospitality & Tourism Consulting business was in high demand and engaged in numerous feasibility studies for regional and foreign investors regarding new hotel projects, while a recent addition is the Pam Golding Restaurant Division.

In addition, the Pam Golding Commercial/Athanor JV currently manages commercial property in the UK and Europe with a total value of GBP152m (approximately R2,3b), while Pam Golding Sectional Title Administrators manages buildings with a combined capital value of R7bn.

"While the market is clearly in for a challenging year, there is no doubt that even in the medium and certainly the long term, property as an asset class will continue to provide sound investment returns," Golding says.

For more information contact Andrew Golding on 021 710 1700.

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