Lew Geffen – Finding Value in SA

FINDING VALUE IN SA

Finding Value in SA. Where savvy global investors are buying. Foreign buyers bought almost R6.5 billion worth of properties in South Africa last year and the percentage of residential property sales to foreigners has doubled from 2% to 4%. Real Estate Investor Magazine spoke to Lew Geffen, Chairman of Lew Geffen Sotheby`s International Realty, about this trend.Q: What is driving increased foreign buyer activity?LG: Foreign buyers are attracted to the South African property market for a number of reasons. The first is the substantial depreciation of the Rand, which continues to make South African property an even more attractive international investment prospect. If you`re buying in Euros or Pounds, you`ll get far more for your money in South Africa than you would in most sunny places in Europe.Secondly, South Africa is a stable country that offers first-world infrastructure and amenities, coupled with breathtaking scenery and beautiful properties, offering foreign buyers exceptional value.It must also be said that these foreign buyers are astute investors with a keen eye for a good deal, and when surveying real estate opportunities globally, an investment in South Africa`s most prestigious property locations present a solid investment choice. For example, in Avenue Des Huguenots in Fresnaye, a property was bought for Euro 224,717 during 2005 and sold during 2013 for Euro 1.43m, showing a nominal return on investment of 26% per annum over 8 years. Another property in Head Road was bought during 2003 for R3.2m and also sold last year for R26m, showing a nominal return on investment of 22% per annum over approximately 10 years.These two properties were renovated by the owners before they were resold. While the days of `flipping`Lew Geffenproperties at huge profits are mostly over for now, investors are happy to buy the best land, renovate and then live in there for a few years while their investment grows.Q: Where are the hotspots for foreign buyers and what are they looking for in a property?LG: Cape Town is a desirable holiday destination, and was ranked as the top holiday destination for 2014 by British newspaper The Guardian and the US`s The New York Times. The city, and the Atlantic Seaboard in particular, is also an immensely attractive investment prospect for foreigners who want to come here again and again, or for those looking for a retirement destination. In this area, we find mainly leisure buyers who are looking for modern, upmarket properties. Buyers prefer to invest in the best location with the best views when they look for residential purchases on the Atlantic Seaboard.For this reason, many properties in this area sellingfor well over R100,000/m2, which is unheard of anywhere else in the country, even in Johannesburg where luxury homes now cost about R20,000/m2. And as long as there is demand for properties on the Atlantic Seaboard, prices will keep going up. The upmarket suburbs of Johannesburg, such as Houghton and Hyde Park, also attract the interest of foreign buyers with business interests in the country and in Africa. These buyers prefer large properties with immaculate gardens, suitable for entertaining business associates and connections.Q: Which foreign nationals are most active in the South African property market?LG: Our survey of all free-standing house sales on the Atlantic Seaboard in the past 18 months has, for the first time, given a comprehensive snapshot of precisely where buyers originate.The main buyer market is African at 79% of sales or 125 buyers, who spent R1.36 billion. A further analysis of the African market shows that 95% (or 120 buyers) were South Africans who purchased property to the value of almost R1.26 billion. These are often South Africans who are bringing back offshore money. The other 5% comprised buyers from Angola, Congo, Zambia and Nigeria, who spent R69.4 million.Mainland Europe remains a significant international source market for property sales on the Atlantic Seaboard. European property investors have spent Euro 21.9million on homes in this area. Mainland European buyers made up 12% and purchased property for Euro 13.8million (R203m) and the United Kingdom accounted for 7% for the buyers, spending Euro 8.1m (R119.33m). The remaining 2% are from the UAE (1%) spending R21.15m and the Far East, spending R12.375m.As far as the European countries are concerned, French buyers are tops with 31% of the region`s spend, which translates to Euro 4.3m (R63.4m) in sales. Next is Switzerland at 16% buying property worth Euro 2.19m (R32.25m), followed closely by Belgium at 15% (Euro 2.16m or R31.75m) and Germany at 12% (Euro 1.61m or R23.7m).The remaining 26% of mainland Europe`s buyers come from Denmark, Italy, Sweden and the Netherlands, and they collectively spent Euro 3.5m (R51.9m).The majority – in fact, more than 80% of the buyers – are also cash buyers. This is unprecedented in the SA residential property market. j|<lew_geffen_sothebys_real_estate_investor.lew_geffen.ornico>

REAL ESTATE INVESTOR  30 Sep 2014

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Lew Geffen – Stellenbosch Sectional Titles Booming

The value of sectional titles in the Stellenbosch area appears to be on a sharply upward trend this year, after a comparatively poor showing in recent years.

This one bedroom apartment inStellenbosch Central offers an open plan kitchen and living room. It is selling for R1 045 990 – click here to view.

According to a Lightstone property report which collects information from all registered sales in the area, there has been 90 sectional title sales in the period of 1 January to date, which brought in an average of R1.2 million, whereas the sale of sectional titles sold in the same area during 2013 only managed an average of R831 250.

Meanwhile, according to Propstats.co.za, the statistical data service set up by the Western Capebranch of the Institute of Estate Agents, between January and September in 2012, sectional title sales in Stellenbosch raked in an average of R1 million, while in 2011 the sale of sectional titles sold for an average price of R1.25 million, up from an average of R1.07 million during the same period in 2010.

Schools in Stellenbosch come with a long and proud history. The town has one of the country’s top universities and no fewer than 19 primary and secondary schools.

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says the University of Stellenbosch is recognised as one of the top four research universities in South AfricaStellenbosch has developed into a vibrant university town.

This four bedroom apartment in Stellenbosch Central, Stellenbosch, has two bathrooms, an open plan lounge and a laundry. It is on the market for R2.5 million – click here to view.

“The sectional title sector of the market in Stellenbosch still offers excellent investment potential in the market. For the students, in addition to the buzz of campus life, the academic stimulation and the sports facilities surrounded by mountain scenery, there are sidewalk cafés and friendly meet-and-eat pubs – all within walking distance,” says Geffen.

The last few months of the year tend to be especially busy with parents trying to find suitable accommodation to buy or rent for their children in time for the first term in January the following year. Other buyers in the area include professionals working in the town.

Stephan Maree, sectional title agent for Lew Geffen Sotheby’s International Realty, says there is incredible demand for apartments in Stellenbosch. “We currently have ten apartments for sale in Stellenbosch Central, ranging in price and size from a bachelor or studio right on campus that is going for R750 000, to a three bedroom apartment in historical Dorp street in the heart of Stellenbosch going for R5.99 million.”

“While property prices saw a steady but gradual decline from 2004 to around 2009, they have picked up and we seem on track to overtake the 2011 record high of R1.25 million with the current average,” says Marelise Visagie, a platinum select agent for Lew Geffen Sotheby’s International Realty, who grew up in Stellenbosch and has a great knowledge of property trends in the area.

This two bedroom apartment in Stellenbosch Central has two en suite bathrooms, an open plan kitchen and air conditioner. It is priced at R1.8 million – click here to view.

Maree says student housing tends to be one of the most talked-about type of property in Stellenbosch Central.

“We have to make it clear that investors are not allowed to buy for-student housing in the residential suburbs, and one occupant of the property has to be a blood relative of the owner.”

He says the area of Die Weides is now earmarked primarily for student housing, but there is strong opposition to student housing in all other suburbs. Investors are best advised to look at apartments or townhouse developments slightly outside the town, which have been developed to accommodate the demand for student housing.

Stellenbosch is 50 kilometres to the east of Cape Town, and is – after Cape Town – the oldest town in South Africa. According to Census 2011, Stellenbosch local municipality has a total population of 155 733 people.

As the second oldest European settlement in the province, the town has become known as theCity of Oaks, due to the many oak trees that were planted by the town’s founder, Simon van der Stel, who was also the Governor of the Cape Colony at the time, and named the town after himself.

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Lew Geffen – Don’t Overprice

Keep calm and don’t overprice
Sotheby’s Realty – South Africa
The exuberance that was evident in the property market a year ago is coming to an end, and home sellers in most parts of SA now need to moderate their price expectations accordingly accoding to the advice of Lew Geffen, chairman of Sotheby’s International Realty in SA, who says that although summer is here and the prime home-buying season is picking up momentum, the heat has gone out of the market in the past few months and the rate of price growth is slowing down.

“Since 2012, when the market really began to turn after the 2008/ 09 recession, we have seen the average home sale price in our group rise by around 26%, and at this level we are seeing indications of buyer resistance in most of the country except Cape Town, where demand is still very high.”

Geffen says he is aware that his point of view may be at odds with what some other high-profile commentators may be saying about the state of the real estate market, “but the fact is that there has been a weakening of consumer sentiment this year in the face of violent strikes, major political shifts, rising inflation and, of course, a couple of interest rate increases.

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Lew Geffen SA Residential Property Market is Cooling

Lew Geffen: SA residential property market is cooling

Posted on October 16, 2014 in Property
residential propertyAlthough some estate agents are reporting an uptick in sales of luxury properties, particularly in coastal areas, property industry doyen Lew Geffen warns here that the South African residential property market shows signs of cooling. He says sales volumes have fallen off by about 6% in recent months and urges sellers not to overprice their homes. Seeff chairman Samuel Seeff told the Financial Mail recently that he expects strong demand from local and international buyers from November to February, which is traditionally a busy sales period. The Pam Golding Group has said it is also seeing the return of property buyers in coastal areas in the Western Cape and KwaZulu-Natal. Meanwhile, FNB property strategist John Loos – like Geffen – has cautioned that we shouldn’t expect too much from what has looked like a recovery, given that these are tough economic times and interest rates could rise. – JCBy Lew Geffen*

The exuberance that was evident in the property market a year ago is coming to an end, and home sellers in most parts of SA now need to moderate their price expectations accordingly.

Although summer is here and the prime home-buying season is picking up momentum, the heat has gone out of the market in the past few months and the rate of price growth is slowing down.

Since 2012, when the market really began to turn after the 2008/09 recession, we have seen the average home sale price in our group rise by around 26%, and at this level we are seeing indications of buyer resistance in most of the country except Cape Town, where demand is still very high.

I am aware that his point of view may be at odds with what some other high-profile commentators may be saying about the state of the real estate market. But, the fact is that there has been a weakening of consumer sentiment this year in the face of violent strikes, major political shifts, rising inflation and, of course, a couple of interest rate increases.

And at the same time the banks are still extremely conservative when valuing properties for home loan purposes.

As a consequence, sales volumes countrywide have fallen off by about 6% in recent months, and there has not been as much price movement as one might have expected given the stock shortages that currently exist in many sought-after areas.

In short, we are back in a normal market that is in the process of balancing itself, and this will soon be the case in Cape Town, too. Sellers need to calm down and price their properties fairly in order to achieve a sale, bearing in mind that further interest rate rises are anticipated.

Prospective buyers should not be sitting on the fence at this stage and waiting for prices to go down. I want to be clear: Home prices are now back where they were before the ‘bust’ of 2008, and are set to keep rising, although possibly more slowly for the next couple of years.

And this, plus the fact that interest rates are on an upward path, is going to make it ever more difficult to qualify for a home loan to acquire the property you want, whether you’re just getting into the market, upgrading, downsizing or investing. Now is the time to make a move.

* Lew Geffen is chairman of Sotheby’s International Realty in SA.

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Lew Geffen – Seller’s to tread carefully on pricing

Sellers To Tread Carefully on Pricing

Posted by PropertyJunction Company 22/10/2014, 12:25
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Sellers_Market

Buyer resistance is starting to kick in is most parts of the country except Cape Town, and sellers need to be really careful now to price their homes correctly, says Lew Geffen, chairman of Sotheby’s International Realtyin SA.

He says he is aware that his point of view may be at odds with what some other high-profile commentators may be saying about the state of the real estate market, “but the fact is that there has been a weakening of consumer sentiment this year in the face of violent strikes, major political shifts, rising inflation and, of course, a couple of interest rate increases.

“And at the same time the banks are still extremely conservative when valuing properties for home loan purposes.”

Consequently, he says, the exuberance that was evident in the property market a year ago is coming to an end, and home sellers in most parts of SA now need to moderate their price expectations accordingly.

“Since 2012, when the market really began to turn after the 2008/ 09 recession, we have seen the average home sale price in our group rise by around 26%, and at this level we are now seeing indications of buyer resistance in most of the country except Cape Town, where demand is still very high.”

Indeed, Geffen says, sales volumes countrywide have fallen off by about 6% in recent months, and there has not been as much price movement as one might have expected given the stock shortages that currently exist in many sought-after areas.

“In short, we are back in a normal market that is in the process of balancing itself, and this will soon be the case in Cape Town, too. Sellers need to calm down and price their properties fairly in order to achieve a sale, bearing in mind that further interest rate rises are anticipated.”

Geffen says, however, that prospective buyers should not be sitting on the fence at this stage and waiting for prices to go down. “I want to be clear: Home prices are now back where they were before the ‘bust’ of 2008, and are set to keep rising, although possibly more slowly for the next couple of years.

“AND THIS, PLUS THE FACT THAT INTEREST RATES ARE ON AN UPWARD PATH, IS GOING TO MAKE IT EVER MORE DIFFICULT TO QUALIFY FOR A HOME LOAN TO ACQUIRE THE PROPERTY YOU WANT, WHETHER YOU’RE JUST GETTING INTO THE MARKET, UPGRADING, DOWNSIZING OR INVESTING. NOW IS THE TIME TO MAKE A MOVE.”

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Lew Geffen – SA property Market Slowing Down

The exuberance that was evident in the property market a year ago is coming to an end, and home sellers in most parts of SA now need to moderate their price expectations accordingly.

“Sellers need to calm down and price their properties fairly in order to achieve a sale, bearing in mind that further interest rate rises are anticipated.”

That’s the advice of Lew Geffen, chairman of Sotheby’s International Realty in SA, who says that although summer is here and the prime home-buying season is picking up momentum, the heat has gone out of the market in the past few months and the rate of price growth is slowing down.

“Since 2012, when the market really began to turn after the 2008 and 2009 recession, we have seen the average home sale price in our group rise by around 26%, and at this level we are seeing indications of buyer resistance in most of the country except Cape Town, where demand is still very high.”

Geffen says he is aware that his point of view may be at odds with what some other high-profile commentators may be saying about the state of the real estate market, but the fact is that there has been a weakening of consumer sentiment this year in the face of violent strikes, major political shifts, rising inflation and, of course, a couple of interest rate increases.

“And at the same time the banks are still extremely conservative when valuing properties for home loan purposes.”

As a consequence, he says, sales volumes countrywide have fallen off by about 6% in recent months, and there has not been as much price movement as one might have expected given the stock shortages that currently exist in many sought-after areas.

“In short, we are back in a normal market that is in the process of balancing itself, and this will soon be the case in Cape Town too. Sellers need to calm down and price their properties fairly in order to achieve a sale, bearing in mind that further interest rate rises are anticipated.”

Geffen says, however, that prospective buyers should not be sitting on the fence at this stage and waiting for prices to go down. “I want to be clear: home prices are now back where they were before the ‘bust’ of 2008, and are set to keep rising, although possibly more slowly for the next couple of years.

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Keep Calm and Don’t Overprice

KEEP CALM AND DON`T OVERPRICE

Keyword: LEW GEFFEN SOTHEBYS Keep calm and don`t overpriceCommercial Features writerTHE exuberance that was evident in the property market a year ago is coming to an end, and home sellers in most parts of SA now need to moderate their price expectations accordingly.That`s the advice of Lew Geffen, chairman of Sotheby`s International Realty in SA, who says that although summer is here and the prime home-buying season is picking up momentum, the heat has gone out of the market in the past few months and the rate of price growth is slowing down.”Since 2012, when the market really began to turn after the 2008/ 09 recession, we have seen the average home sale price in our group rise by around 26%, and at`Although summer is hereand the prime home-buying season is pickingup momentum, the heat has gone out of the market in the past few months`this level we are seeing indications of buyer resistance in most of the country except Cape Town, where demand is still high.”Geffen says he is aware that his point of view may be at odds with what someother high-profile commentators may be saying about the state of the real estate market, “but the fact is that there has been a weakening of consumer sentiment this year in the face of violent strikes, major political shifts, rising inflation and, of course, a couple of interest rate increases.”And, at the same time, the banks are still extremely conservative when valuing properties for home loan purposes”As a consequence, he says, sales volumes countrywide have fallen off by about 6% in recent months, and there has not been as much price movement as one might have expected, given the stock shortages that currently exist in many sought-after areas.”In short we are back in a normal market that is in the process of balancing itself,There has been a weakening of consumer sentiment this year in theface of violent strikes, major political shifts, rising inflation, and, of course, a couple of interest rate increases`and this will soon be the case in Cape Town, too.”Sellers need to calm down and pricetheir properties fairly in order to achieve a sale, bearing in mind that further interest rate rises are anticipated.”Geffen says, however, that prospective buyers should not be sitting on the fence at this stage and waiting for prices to go down.”I want to be clear: home prices are now back where they were before the `bust` of 2008, and are set to keep rising, although possibly more slowly for the next couple of years.”And this, plus the fact that interest rates are on an upward path, is going to make it ever more difficult to qualify for a home loan to acquire the property you want whether youVe just getting into the market upgrading, downsizing or investing. Now is the time to make a move.”<lew_geffen_sothebys_plainsman.lew_geffen.ornico>

PLAINSMAN  26 Oct 2014

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