Dear Property Pre-launch Member;
2012 promises to be a successful year with the property market starting to turn and investor confidence on the increase. In this latest newsletter update, we focus on:
Property market turning | Century Racing 2012 Dakar | Waterfall Valley progress | Fiduciary & taxation specialists | Going green tip - energy and cost saving
Firstly, I want to say thank you to all those of you who followed the progress of the Century Racing Team during the recent Dakar Rally in South America, and for sending in your messages of encouragement and support. I can't tell how this kept our spirits afloat during what is without doubt the most gruelling and intense competition I have ever had the privilege to participate in. It was exhilarating, and at times equally heart-stopping and frustrating, but nothing compares to the sheer joy of competing – and completing – the world's premier rally. For those of you with an interest in motor sports and the Dakar Rally, we've included a small summary of the team's performance in this newsletter.
It's great to be back in South Africa at the start of what I believe is an auspicious 2012. After a nearly four year slump that commenced with the financial crisis of 2008, segments of the residential property market are starting to show signs of recovery.
In fact, there were already early warning signs of a recovery in certain segments of the residential property market in 2011. For example, the number and value of building plans approved towards the end of last year was well up on the previous year. So, too, was the number of new residential units completed. While the majority of these units were in the affordable segment of the market, our experience also shows a steady drift by buyers towards secure, lifestyle estates.
Plans approved for residential development up 2,2% in the third quarter of 2011 over the same quarter in 2010. Completion of new residential units countrywide increased 6,9% in the third quarter of 2011, with Gauteng – underlining its dominance as the economic engine of the sub-continent – accounting for a disproportionate amount of these units.
There is no doubt that the four year slump in the residential market was aggravated by the 2008 financial crisis and the subsequent tightening in lending policies by the banks. Many consumers still suffer from adverse credit ratings which throttles their access to the credit markets, but there are signs that the banks are relaxing their lending criteria which should allow for a modest increase in mortgage lending growth in 2012.
In recent months we have noticed greater willingness by the banks to extent mortgage finance and a steady relaxation in their lending criteria. This was inevitable, as the banks are sitting on large cash holdings earning relatively small returns. Demand for mortgage lending is coming from new entrants to the property market, untainted by adverse credit ratings, and existing home owners seeking their ideal homes. It is among this last group that the concept of secure, lifestyle estate living is really catching on.
Research by Absa Bank shows nominal growth of 2,2% in middle-segment home values in 2012, down from 7,3% in 2010. While interest rate cuts of 450 basis points in 2009 helped shore up demand, by 2010 the drop in interest rates was just 150 basis points, while rates remained unchanged in 2011. “This, together with rising inflation, relatively high levels of debt, damaged credit records and tight labour market conditions, weighed on consumers and confidence levels during last year, impacting the demand for housing and mortgage finance, as well as house price growth,” says Absa in its latest property research newsletter.
Driven by increasing food prices, transport and property running costs, headline consumer price inflation moved above 6% late last year. Absa says this caused house prices to deflate by a real 2,7% in 2011. The average real price of middle-segment houses, calculated at constant 2008 prices, was in November almost 14% below its peak of August 2007, which was the result of average nominal house price growth being below the average headline consumer price inflation rate over the past four and a half years.
My advice to property buyers is to buy when prices are low. Residential property prices are low right now and experience tells us that the downtrend this cannot last forever. At Century Property Developments, our philosophy as a group has always been contra-cyclical. For example, we resisted buying land at the height of the property frenzy in the mid-2000s, when prices went mad. Over the last three to four years, however, we have been buying aggressively because prices returned to saner levels.
We have yet to experience a year of negative growth on any of our developments. In the last quarter of 2012 we experienced a noticeable rise in the number of new properties sold and bonds approved. This tells us that optimism is returning to the residential property market, particularly the kind of secure, lifestyle estate we offer. This is no accident: we carry out extensive research into property trends to establish what buyers are looking for. Then we model our developments accordingly, and price our properties aggressively so that buyers receive an immediate lift in home equity within the first year of buying.
Our research tells us that buyers are far more value conscious than was the case four years ago; they are better informed about property trends and values; and there is a noticeable trend towards greener living in a secure estate offering a range of amenities and outdoor activities. Our research also suggests there is a fundamental shift in the motivation of new home buyers. People are tending to live longer in the same residence, and are seeking a return to basic values: more time with the family, lower costs of living, and greener lifestyles. Roughly 30% of our buyers cite the desire for a greener lifestyle as the primary motivation for purchasing a property within the Century family of estates.
The lifestyle choices people are making are different to those of four or five years ago. Parents would rather spend an extra hour with the children every day rather than go through the daily grind of taxiing them to school. So having a school within the estate – as we have at Waterfall in Midrand with the opening of our new Reddam House school – allows parents to let their kids cycle to school in safety on our bicycle tracks, without ever meeting a vehicle. People have had enough of the suburban crime story and want to be able to live without having to worry about alarms and intruders. This is why we invested a lot of money to come up with a security system that is unequalled in any residential estate in South Africa.
Another feature of the property market likely to develop over the coming year is the return of foreign investment. The weaker rand – coupled with cheaper local property prices – will attract foreign money in search of superior long term growth. In these fraught economic times, there is a discernible move towards assets with a proven ability to maintain and grow value over the longer term.
Based on the sales we achieved in 2011 and the pipeline for 2012, I can say with some confidence that the residential property market in South Africa has turned the corner.
Mark Corbett (CEO of Century Property Developments) and Francois Jordaan were greeted by hundreds of supporters and several news crews as they arrived back at Johannesburg's OR Tambo Airport on 17 January from their successful completion of the 2012 Dakar Rally in South America.
The Century Racing Team achieved a remarkable 24th placing overall, and second in class.
Watch the impressive welcome of the Century Racing team at OR Tambo airport
Top (l-r) Rudi Balzer - Chief Mechanic, Gaye Corbett - Communications, Julien Hardy - Chief Engineer and Team Manager, Ernest Corbett - Support vehicle, Mark Corbett - Driver, Francois Jordaan - Navigator, Juan Mohr - Support vehicle, Bottom (l-r) Colin Matthews - Support Truck
The 2012 Dakar Rally started in the Argentine seaside resort of Mar del Plata on the Atlantic coast of South America on January 1 and finished almost 9 000 km later in the Peruvian capital Lima on the Pacific coast on January 15. The rally comprised five racing special stages in Argentina, a crossing of the Andes Mountains, five stages in Chile (including a crossing of the Atacama Desert) before a rest day on January 8 in the Chilean town of Copiapo. Then, for the first time, the rally entered Peru for four stages and a ceremonial finish.
Watch the Century Racing 2012 Dakar experience
“Mark Corbett pulled off a great achievement when he crossed the finish line of the Dakar Rally in the Peruvian capital Lima on Sunday afternoon,” said SuperSport.com. “Driving a privately-funded and privately-built, two-wheel-drive buggy powered by a V8 Toyota engine, Corbett and co-driver Francois Jordaan conquered the world's longest and toughest motor race at their first attempt together, finishing a remarkable 24th overall after 13 special stages.”
The South African privateers started the ultra-marathon in Mar del Plata in Argentina on 1 January in 60th place and ran as high as 17th overall after special stage three in Argentina. The incessant punishment meted out by the harsh conditions took its toll over the 15 days. These included high-speed stages through desert scrubland, dry river beds and canyons, maximum temperatures above 40 degrees Celsius in the Atacama Desert and a high altitude (4 700 metres above sea level) crossing of the Andes Mountains in sub-zero temperatures.
CR4 competing in the 2012 Dakar rally
It wasn't all plain sailing, as Motor Sport reported: “It was another tough day at the office for South African Dakar Rally competitors Mark Corbett and Francois Jordaan (Century Racing CR4) on Wednesday. Problems with a broken wheel bearing on the Toyota-engined two-wheel drive buggy forced them to stop repeatedly throughout the 377-kilometre special stage 10 between Iquique and Arica in Chile. They finally reached the overnight bivouac with the 56th-fastest time of the day among the cars after losing around three hours.”
According to Supersport, the CR4 buggy stood up to the punishment remarkably well. “Team manager Julien Hardy, designer of the car, was full of praise for the driver and co-driver as well as the small technical team of fellow South Africans that serviced the car at the end of each stage and prepared it for the next day's challenge.
"Words like 'relentless', 'gruelling', 'tough' and 'tenacity' take on a whole new meaning on the Dakar," said a delighted Corbett at the finish in the Plaza de Armas in Lima. "I've watched the Dakar Rally on television for many years and it's always been my dream to compete in this great race. It has been a privilege and an unforgettable experience. To finish the Dakar is an achievement all on its own, but to do so in our own car with our own support team is something of which I am immensely proud. We couldn't have done it without our wonderful back-up crew, which included my father, Ernest, and mother, Gaye. Francois did a great job of keeping us on the route, which was a difficult task with our having to find hidden waypoints each day. This has been almost a life-changing experience and I can't wait to come back and do it all again."
Taking on the infamous fesh fesh
Well done to the Century Racing Team on a truly remarkable performance!
For more information, visit www.century.co.za/centuryracing
The 244-stand Waterfall Valley Mature Lifestyle Community, situated within the prestigious Waterfall community of developments between Sandton and Kyalami, is being readied for its first occupants by mid-2012. The showhouses are being completed and will be ready to view by next week.
More than 65 houses are now under construction, while roughly 120 houses are designed. Century Property Development sales executive, Dan Brown, says the estate is expected to sell out even faster than its sister development, Waterfall Hills, which was similarly targeted a the mature lifestyle market. “We sold out Waterfall Hills in 18 months in the teeth of the property recession, and all indications are that we will match or even beat that performance at Waterfall Valley,” he says. “We were particularly encouraged by the high rate of sales in January 2012, which leads us to believe there is a definite turn in the property market.”
Waterfall Valley gatehouse
Construction of Waterfall Valley houses
Construction of the impressive Waterfall Valley clubhouse
Waterfall Valley – like its sister development Waterfall Hills – is a far cry from the disinfectant-scented old-age facilities that typically cater to the seniors market in South Africa. “Our market is not afraid of growing old,” says Brown. “They're smart, successful people who are looking for a place where they can enjoy their retirement and maintain an active lifestyle, while at the same time they want access to five-star medical facilities when these are needed.”
Like Waterfall Hills, there are no walls or fences in sight at Waterfall Valley, which facilitates neighbourly interaction. None of this would be possible without extraordinarily robust security, which includes four-metre high perimeter walls, reinforced with concrete and topped with motion sensing cameras that detect any potential intrusion before it happens. The gatehouse will be manned 24 hours a day by highly trained, courteous security personnel. Access control is state-of-the-art, with all traffic being logged, cleared and monitored from the security surveillance centre. In short, says Brown, this is the type of security you would typically find at US embassies.
Phase 1; the award winning Waterfall Hills
development
The highlight of the development is undoubtedly the sumptuous clubhouse, which will serve as the focus of community interaction. The clubhouse will be nearing completion in the next four months, in time to welcome the first residents. It includes an auditorium/theatre where residents will be able to watch their favourite movies as well as the latest blockbusters, a hairdresser and health spa, news agent and deli store, a gourmet restaurant offering breakfast, lunch and supper, a fully comprehensive gym catering to varying levels of fitness and mobility, an outdoor swimming pool, a business centre, a billiard room with card tables, a cigar lounge and pub, and an on-site travel agent. There is a horticultural centre for those with green fingers, and walking trails along the estate's green belts for those with a taste for the outdoors. The facilities at Waterfall Hills and Waterfall Hills and Waterfall Valley will be integrated and will enjoy full reciprocity to ensure the widest possible spectrum of activities for residents of both estates.
Unlike other developments catering to the mature market, homes can be built according to a variety of different designs, with plenty scope for customisation within these designs. Piped gas will be supplied to all homes for heating and cooking purposes. This not only makes for a greener lifestyle, it also substantially reduces energy bills and frees residents to a large extent from Eskom power outages.
All homes have access to DStv, internet, internal and external telephony as well as dedicated internal TV channels that will advise the community of upcoming events and activities.
Spacious landscaped gardens at Waterfall Hills
“We have taken the formula we developed at Waterfall Hills and built on this at Waterfall Valley,” says Brown. The level of construction supervision and quality control is one area where Waterfall Valley residents are already noticing the benefits with WBHO (Wilson Bayly Holmes Ovcon) having been appointed as main contractor. Waterfall Valley residents will notice other differences: in some of the finishes used, the fact that gas is reticulation to all homes (supplied by Sasol Home Gas), wider verges and more efficient use of space, with over 300 acres of greenbelt, 37km of walking trails and various bird hides and rest areas all located within a secure perimeter.
“We are encouraged by the level of sales so far, and we expect the trend to improve in the coming months,” says Brown.
Sanlam Private Investments has announced the addition of a specialist fiduciary and tax team to their expanding business. They specialize in local and international taxation, fiduciary and advisory matters for ultra high net worth individuals which includes estate planning, drafting of Wills, executorship, setting-up trusts, tax, emigration, immigration and exchange control advice.
They can be contacted on fiduciary@spi.sanlam.com
From back left to right, they are Anton Maskowitz (fiduciary specialist), Ken Newport (fiduciary assistant). Front left to right, Chanel Kempff (fiduciary specialist) and Marteen Michau (Head of the team).
There are a few simple things you can do to immediately reduce your carbon output and save money at the same time.
Switching to gas as a source of energy for heating and cooking is one such option. Not only does this reduce your reliance on the electricity grid – which is increasingly vulnerable to outages – but it will also translate into substantial cost savings. Using LP (liquid petroleum) Gas for your heating and cooking requirements takes care of roughly 60% of your energy usage.
This is why Century Gas, in conjunction with Century Property Developments, decided to partner with Sasol Homegas to supply LP Gas at its Waterfall and Helderfontein estates. Waterfall Estates is now the largest LPG piped system in South Africa. The gas in supplied and stored in bulk underground tanks, strategically placed throughout the estates, and distributed to the individual properties. Homeowners are able to purchase the gas through a pre-paid metering system, and are encouraged to install gas appliances for heating and cooking to take full advantage on this benefit. Residents will also see a 30% saving due to the gas price we offer.
Electricity vs Gas cost predictions
Using LP Gas will reduce your carbon footprint and reduce your energy bills. So let's take a look at some other steps you can take to improve energy consumption. Obviously, if you are designing a new house, you have far greater flexibility in optimising energy conservation, using a system known as reverse mass consumption, for example. This is where you place heavy, solid construction in the centre of the home, and position the lighter, well-insulated construction at the outer parts of the home. The sun heats up the solid, central core during the day, allowing this latent heat to radiate into the rest of the home at night, when it is kept inside by the insulated outer shell.
If you have an existing home, there are several things you can do to better insulate your home and reduce energy consumption. Firstly, install insulation in your roof to trap heat rather than waste it. Secondly, look at your window dressings, such as curtains and blinds. Chose a heavier, heat-retaining curtain (or blind) rather than a lighter material. Let the sun stream in through the windows during the winter months, and close the curtains at night to help retain the heat indoors.
If you have tiled floors, use carpets or rugs that can create warmth in the cold areas, but can be stored during the summer months to keep the areas cool.
Then consciously reduce your energy consumption by switching off lights when there is no-one in the room, or, better still, install a sensor which will detect when no-one is in the room and switch off the lights for you.
Garden landscaping can also reduce your energy consumption. Depending on the orientation of the building and windows, you can plant evergreen and deciduous depending on your shade requirements for winter and summer months. What you want to is to have shade in the summer months, and sun in the winter months. So plant trees that will sprout leaves to give you shade outside big windows in summer, and shed leaves in winter to give you sun. This gives you natural heating and cooling all year round.
In future issues we will provide more examples of ways to green your home and save on energy bills, so stay tuned.
Developments curently On Show:
Helderfontein Estate - Fourways
202 stands ranging from 700m² to 1600m² each selling from R855,000
- explore now
Waterfall Country Estate/Village - Kyalami/Woodmead
800 stands at 1200m² and 1200 stands at 650m² each selling from R818,000
- explore now
Waterfall Valley Mature Lifestyle Estate - Sunninghill
244 bespoke retirement homes selling from R2,100,000
- explore now
Waterfall Equestrian Estate - Sunninghill
120 stands at 8500m² each selling from R5,600,000
- explore now
Crowthorne Village - Midrand
24 freestanding homes, 14 garden apartments and 14 loft apartments each selling from R869,000
- explore now
Just a reminder that our sales offices are open daily from 09h00 until 17h00
- Waterfall Valley Sales Office
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Waterfall Sales Office
- Helderfontein Sales Office
