There are strong signs of a positive about turn for South Africa’s property sector during 2024 with key indicators pointing to a shift from a buyers’ to a sellers’ market, according to Tyson Properties’ chief executive, Chris Tyson.
READ: Selling: A closer look at an agent’s role
Speaking in the wake of the recent decision by the Reserve Bank’s Monetary Policy Committee to leave interest rates unchanged – the fourth such decision in a row - Tyson is confident that a drop in interest rates is on the cards later this year. This will, inevitably, lead to an uptick in property transactions.
Already, Tyson believes, there were positive undercurrents within what might have seemed to have been a fairly downbeat 2023.
Although the 2023 market was down 29% on average, the Lightstone Report points to the fact that 38% of all transactions were first time buyers indicating an appetite for home ownership is bubbling under.
Already, he says, Tyson Properties has seen increased numbers of enquiries nationally, indicating that change is coming.
“In fact, I believe the shift started on New Year’s Day and will gradually continue over the next 24 months. We entered 2023 with a negative outlook. We were expecting interest rates to increase and even talked of the power grid collapsing. At the beginning of 2024, we are entering the year with a more positive outlook. The sentiment in the market is exciting,” he notes.
The major economic indicators are there for all to see. Despite the Reserve Bank’s warnings, it seems inflation is returning to more acceptable levels as it has in key global markets such as the US and Europe. This suggests that the upward phase of the global interest rate cycle has ended and that local interest rates could follow global interest rates downwards.
Although Lightstone observes that still absent political and economic certainty are key factors when it comes to stabilising the property market, Tyson believes that both are set to settle during this election year which will provide clear answers and end fence sitting.
Improvements to load shedding and more visible work on infrastructure and service delivery are also likely to have a positive impact, Tyson believes. Even the slightest improvement in economic growth and employment will spark this potential upward trajectory.
Although the market in KwaZulu-Natal is doing well, Johannesburg is showing renewed positivity and more activity and the Cape remains buoyant, Tyson acknowledges that one of the major indicators of an upturn remains unchanged at this point.
“For the most part, property prices remain flatlined in many areas which cannot last under present conditions,” he says.
READ: The role of a real estate agent : What you need to know
He adds that there is evidence that investors are already in the market looking for bargains ahead of the market’s strengthening with the buy-to-let market showing positive growth, particularly in Cape Town where potential buyers are waiting for new builds.
Semigration – not only in Cape Town but also in many coastal areas – continues and is driving sales in specific locations. During 2023, the Lightstone Report confirmed that the influx into the Western Cape continued. There were 1971 purchases in Gauteng and 1034 in KwaZulu-Natal but 6406 in the Western Cape.
Lightstone also indicates that 21% of buyers were relocating to another town or province or downsizing due to lifestyle changes – a trend that Tyson says will continuously increase in the coming years.
Along with this comes a demand for greener homes in 2024. Availability and the cost of both electricity and water are expected to make homes offering alternative energy such as solar and water saving systems more attractive to buyers as does good security which remains top of both Lightstone and Chris Tyson’s property shopping list.
READ: 7 Upgrades that will improve your home's kerb appeal dramatically
According to Arnold Maritz, Co-Principal of Lew Geffen Sotheby’s international Realty, last month, shared 10 proactive steps you can take as a home seller and explained there are essentially two primary types of delays when selling a home; the first relating to the confirmation of the sale and those that occur once the sale has been confirmed and hold up the transfer.
“Once the potential minefield of multiple complex steps, reams of documentation along with suspensive conditions and contractual obligations has been successfully navigated and the deal is finally done, many people breathe a sigh of relief.
“But the deal isn’t quite done yet and the expected downhill cruise to transfer can still become an uphill battle if one isn’t careful.”
He says that many of these delays can quite easily be avoided or resolved through good communication and prompt co-operation with the transferring attorney and agent but if sellers have addressed the following points, they can offset many problems before they occur:
1. Have Approved House Plans Ready:
If you've made structural changes to your home, such as adding a room or renovating the kitchen, ensure that you have all the necessary permits and approved house plans ready for potential buyers.
Buyers often want to see these documents to verify that the work was done correctly and legally and getting plans approved with the Council can take many months which is probably a lot longer than most buyers would be willing to wait.
2. Get Your Certificates of Compliance Done:
If you are even thinking about selling your home at some point in the near future, it’s a good idea to get a head start on your compliance certificates.
Property owners are required by law to ensure that the property is legally fit for sale and before the transfer can take place, the transfer attorney must be in possession of the relevant COCs and, although the process is quick and simple, if there are any major issues to be addressed, it could delay or even scupper the sale.
Additional information:
Agreements of sale may provide for up to five different types of compliance certificates to be obtained by the seller (unless otherwise agreed upon). These certificates must be provided to the conveyancer before the property transfer is registered.
Conveyancing and Property Law attorneys at Abrahams & Gross has put together a list of some important aspects in respect of compliance certificates.
Electrical compliance
- Certifies that the electrical installation on the property complies with the required safety standards (governed by the occupational health and safety Act)
- Often remedial work is required which may take some time (best to attend as soon as possible)
- The certificate is valid for two years unless alterations are made prior to the expiration date
- Parties cannot contract out of/agree to waive
Beetle certificates
Certifies that the accessible wood of permanent structures, on the property, does not contain any wood destroying beetles
- Usually valid for 3 to 6 months
- Not governed by any specific law, but has become practise upon change of ownership of property
- If parties agree that no certificate is necessary and the bank requires it for the purchaser’s bond, then this is for the purchaser’s expenses
READ: Selling? Your complete guide to compliance certificates
Gas certificates
Certifies that the gas installation on the property complies with the Occupational Health and Safety Act and requires safety standards
- A certificate must be obtained on installation
- If any change or amendment is made, a new certificate must be obtained
- Cannot contract out of or agree to waive
Plumbing certificates
Only applicable to transfers within the municipal jurisdiction of the City of Cape Town
- Certifies that the water installation at the property is in line with the City of Cape Town Water By-laws
- A new certificate must be obtained upon every change of ownership
- Parties cannot contract out of this or agree to waive
- NB! Does not confirm all plumbing works in perfect condition!
READ: Building plans and compliances - get your home in order before selling
What does the plumbing certificate confirm?
- the water installation conforms to the national building regulations;
- the property’s water meter is in working order;
- there are no defects that can cause water to run to waste; and
- no rainwater leaks into the sewerage system
Electric fence
Certifies that the electric fence installation complies with the required safety standards in terms of the Occupational Health and Safety Act
- An existing certificate may be transferred by the seller to the purchaser
- A seller need only provide a new certificate to the purchaser if a change was made to the installation after the current certificate was issued
- If sectional title, obtain from the body corporate
- Parties cannot contract out of/agree to waive
READ: Exploring property transactions: an A-Z guide
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