The Facilitators (Your Ultimate NHBRC Solution)

Builders must get NHBRC exemption before construction starts

2009-05-11T11:06:00.005+02:00

All potential owner builders that qualify for exemption from the NHBRC, must take note that they have to get exemption before construction starts.

If you start with construction of a newly built home without an enrolment certificate or a letter that exempts you from enrolling your home you are breaking the law and will then have to enrol your home as a late enrolment.

For more information, please visit The Facilitators FAQ's Page.

Steel Buildings Are Taking Off

2009-05-07T18:00:00.000+02:00

IN just a few years the light steel frame building (LSFB) industry has grown into a useful technology. This is largely due to the efforts of the Southern African Light Steel Frame Building Association (SASFA), a division of the Southern African Institute of Steel Construction (SAISC). “Such are the advantages of this construction technology it is increasingly becoming an accepted alternative for the local building industry,” says SASFA director John Barnard.

He says the ability of practitioners to learn quickly the gamut of skills required in LSF building, including understanding overall cost and energy savings available through this building method, have added to the success of this new industry.

“Of course, with a burgeoning new construction technique one has to ensure that standards are maintained. Training is fundamental to this process,” says Barnard.

He says that while there will be several training initiatives in areas such as erection and cladding, courses for designers and builders, SASFA will concentrate initially on building inspectors - i.e. municipal and NHBRC inspectors and financial institution evaluators - to ensure they have the skills to monitor that the LSFB industry is complying with the standards set down in SASFA’s building code.

In the meantime, SASFA is in the process of rolling out an industry accreditation scheme, which will assess the four main stages of the LSFB process i.e. the LSFB system utilised e.g. Scottsdale, FrameMaster, Hayes, Howick, Mitec and Dezzo; design and manufacturing processes; steel frame erection and building completion. “We see an inextricable link between the SASFA Accreditation Scheme and our training initiative. They work hand-in-hand to ensure consistently good standards in our industry”, says Barnard.

SASFA is planning several key training programmes, which will be presented in the major centres across the country, as well as Namibia. “We are trying to provide training in all the facets to ensure that the potential of this building method is reached in Southern Africa.”

There are currently 29 South African profiling companies manufacturing light steel frames.

They have a combined annual manufacturing capacity (single shift basis) of 43 million linear metres of light steel sections, or 39 000 tons of galvanised steel per year. Some 36% of the capacity is dedicated light steel truss manufacturing facilities.

“Conservatively, this means that light steel frames can be supplied for 1.5 million sq m of LSFB structures (wall frames and trusses) and trusses only for a further 1.8 million sq m per year of floor area of building

Barnard says that because the light steel frame building offers a wide range of benefits for fast track construction logistical cost advantages and thermal efficiency, offering cost savings of up to 20% or more compared to conventional building methods, the industry is growing rapidly.

Cape Business News - Cape Town,South Africa

First beneficiaries move into unfinished houses

2009-04-30T11:03:00.000+02:00

The first residents of the Refentse Low Cost Housing Project in Rietfontein have move into eight homes at the site even though the contractors are still at work completing the houses and no water or sanitation infrastructure have been installed.
According to some of the residents they were informed by the community officer of the Local Municipality of Madibeng that they could move into their houses and they told Kormorant that the municipality assisted them to move there last Saturday.

The residents said that they were the first ones to receive houses at the low cost housing project and that they had been waiting for their homes since they put their names on the beneficiary list in 2000. According to what they understood they were the first to receive houses because of the age of the beneficiary and that the position on the original list was not used to determine this.

Mostly, the residents expressed their joy at being able to move into their houses but during a tour of the two bedroom houses they indicated that although installed, the toilets are not working yet and there are no water taps or basins in the houses.
A portable toilet was placed in the area of the eight occupied houses and the residents indicated that they get water from taps which are situated approximately 100m away.

According to the residents the contractors are still working on site and indicated that they would clear the veld between the houses during this week. The tall, dry grass holds a danger of fire as the residents still make fires outside the houses to cook on.

Asked whether they needed to pay any money to be able to move in, the residents said no. This followed rumours that residents of the informal settlement were told that they could pay R30 and receive an ANC membership card which would allow them to move into the houses before the election last week.

Mr. Patrick Morathi, communication and marketing coordinator for the Local Municipality of Madibeng said in response to enquiries that although the project has not been handed over to the municipality by the contractors there are eight families occupying houses on the site.

He said that all the services have not been installed at the project yet and that the project will continue after a forensic audit by the Department of Local Government and Housing and the NHBRC.

Morathi said in all 50 houses were inspected and minor problems were found.
“The basis for allocation was to allocate houses to the most needy people but obviously there were categories identified and prioritised. We must indicate that we have 461 approved beneficiaries for the project of 167 houses. This was the result of having initially targeted 1000 and scaled down to 500 and finally 167 after objections and the Environmental Impact Assessment process,” Morathi said.
He confirmed that transport was arranged to help the families move because some of the families were relocated from Kommandonek.

Morathi said that more families will not be moved to Refentse in the near future.
“We have installed five mobile toilets for the current occupants and will extend the service as and when the need arises. As for water, we are currently providing water tankers and will extend such a service on the basis of need,” Morathi explained.
He denied that the residents were asked to pay R30 for an ANC membership card.
He said that although some people have been approved as beneficiaries the prioritisation was designed in terms of need. “Our first priority was the elderly, followed by child headed households as a result of parents passing away, then the rest will follow.

We are currently engaging developers around the Dam to accommodate low cost housing projects in their respective developments to accommodate the rest of the approved beneficiaries,” Mortahi said.

Kormorant - Hartbeespoort,South Africa

Centurion drawing first-time buyers

2009-04-21T15:44:00.001+02:00

Centurion's plethora of sectional title properties has been drawing a steady stream of buy-to-let investors and first-time buyers in recent years.

Paul Greyling, principal of the local Chas Everitt International franchise, says many are now coming back on to the market at good prices because the rentals that can be achieved do not cover the monthly home loan instalments at current interest rates.

Four residential nodes are currently proving particularly popular with the young set, he says, including the lifestyle estates of Celtisdal and Brooklyn which offer one and two-bedroom units ranging in price from R480k to R800k. Carports and pools come standard and Brooklyn residents also have the use of a tennis court and clubhouse.

Thatchfield estate and the suburb of Eldoraigne have also become fashionable. Units on offer are larger at prices ranging between R800k and R2m.

"Some developers have also now realised that there is demand for bachelor style accommodation, and open-plan apartments catering to this market are starting to make an appearance, at prices from around R400k," says Greyling.

However, he advises that those who want to get on to the property ladder do need to be well-prepared financially. "The majority of banks now require a deposit of at least 10% and on top of that there are transfer costs, which means you need to have quite a large amount of cash on hand.

"Banks also need to know that you can afford your bond and they prefer that your instalment does not absorb more than a third of your monthly income. So if you want to purchase a property for R500k, with a monthly bond repayment of R6k, you would need to prove household earnings of about R18k pm to qualify for a home loan."

And then, he says, potential buyers need to budget for rates and taxes as well as sectional title levies. In Centurion, rates range between R300 and R600 a month depending on the area. Levies range from as little as R300 a month to as much as R1k in some older developments.

www.property24.com

An eye for luxury property

2009-04-21T15:24:00.001+02:00

Cash-flush Europeans splash out in KwaZulu-Natal as prices fall

BRITISH and German jet-setters are bucking the global credit crunch and splashing out in euros for prime coastal homes and estates that have seen asking prices slashed.

Estate agents in Durban this week said they had recorded a flood of cash sales of between R3-million and R6-million for modest homes and sea-facing apartments since December. Rolling out the red carpet and stuffing buyers with lobster and champagne, the estate agents said other cash-flush Europeans, between the ages of 40 and 55 years, were snapping up homes priced between R1-million and R5-million.

One property that has attracted interest from foreign buyers is a R22-million beachfront penthouse located in Pearl Tides in Umhlanga, KwaZulu-Natal.

Boasting 180-degree ocean views, the 600m² double-level penthouse features three en-suite bedrooms, an open-plan living area and a private rim-flow pool.

Pam Golding Properties’ Elwyn Schenk, whose branch recently sold a four-bedroom apartment in Umhlanga for R11-million, said sales in the suburb were increasing month on month.

Foreign buyers include investors, corporate executives, celebrities, socialites and civil servants eager to cash in on South Africa’s property slump.

In June last year, The Times revealed that Hollywood stars Nicolas Cage, Leonardo DiCaprio, and Jude Law’s former wife, Sadie Frost, were just a few of the international celebrities discreetly hunting for houses in Umhlanga.

At the time, property analysts said international buyers were at last finding Cape Town’s seafront suburbs — where prices range from R5-million for a one-bedroom apartment to R60-million for a beach bungalow — too expensive, and were turning their attention to prime property along the KwaZulu- Natal coast.

Last week PGP said it had recently showcased homes, stretching from Umhlanga to Clifton in the Western Cape, to high-net-worth individuals at the Sud-Afrika Tage 2009 show in Germany.

The show, which attracts exhibitors ranging from tour operators and immigration experts to property brokers of luxury hotels and wine farms, was staged in Mainz, on the outskirts of Frankfurt, in Neuss in the Koln, Dusseldorf region and in Hamburg.

Dina Porteous, who runs PGP’s operations in Margate, said: “Our exhibit attracted a great deal of interest. It is clear that what attracted interested buyers is our abundance of sunshine, coupled with our friendly people and beautiful homes.”

Gaby Moessner, manager of PGP group’s German office, said: “This is a discerning market and overseas buyers are extremely well informed about the South African property market. The advantage of acquiring lock-up-and-go apartments and homes was also a major drawcard.”

He said potential German buyers in general preferred stand-alone homes rather than those in golfing or townhouse developments.

“In Germany space is at a premium so this is a top priority when it comes to buying property in South Africa,” said Moessner.

The Times - Johannesburg, Gauteng, South Africa

Property sector plans post-election lekgotla

2009-04-21T15:22:00.001+02:00

South Africa’s fast-changing political environment and its impact on the country’s economic outlook would receive attention at the South African Property Owners Association’s (Sapoa’s) forty-first International Convention and Property Exhibition, to be held in Sandton in early June.

It was particularly keen to understand whether there would be a so-called “shift to the left” and a rise in “antibusiness sentiment”, which would be the theme of an input by Free Market Foundation executive director Leon Louw.

Further, Redefine Income Fund CEO Brian Azizollahoff would debate the question of "business unusual” as part of the convention’s scheduled panel discussion on South Africa’s economic outlook.

This would be preceded by an economic trend analysis presented by economist JP Landman.

Various panels would also discuss other challenges facing the property sector in Africa, as well as the global outlook for the property sector.

Creamer Media's Engineering News - Garden View, South Africa
Terence Creamer

Timing is the key to property market killing

2009-04-19T15:29:00.001+02:00

Auction house boss says strike now for the housing bargain of a lifetime, writes David Pincus

A question doing the rounds, particularly among those who have finance or can raise it, is: does one buy residential property now that prices have fallen so much? They have been declining since the middle of 2008 and dropped 4.2% year-on-year in March, according to mortgage originator ooba, formerly MortgageSA.

It is not an easy decision. Many believe the price of residential property will continue to drop for quite a while, and many others believe the market is close to bottoming.

Rael Levitt of the Alliance Group, which will auction more than 600 properties in April and May, believes the time to buy is now.

He said: “In the last downturn banks couldn’t give away distressed properties. They had to keep them on their books as properties in possession. But unprecedented volumes of houses are now hitting auction floors, and many buyers who have access to financing see the current period as a window of opportunity and are picking up properties at low prices.

“They’re getting high rentals at the moment, which means that while they wait for the market to rise their purchases are turning into great investments.”

But when will the market rise? Levitt believes it may start to bottom late in 2009, “which means there is no better time than now to pick up real estate at lows that haven’t been experienced in South Africa in decades”.

Your trusty calculator may help to provide the answer: if the market turns up in, say, September, it means those who delay purchasing until then will buy for less, but will lose four or five months’ rental.

Levitt will not find estate agents clamouring to join his fan club when he says buying on auction is the way to go.

“You have to look at international trends to see that, in sharp contrast to the snail’s pace of private transactions, property going under the gavel is increasing at an exponential rate,” he says.

But, Levitt concedes, “buying on auction is often misunderstood, and can be daunting”.

From houses to horses: if you are into horse breeding and have been toying with the idea of setting yourself up in the Cape, the ClareMart Auction Group’s sale of the more than 300ha Oaklands Farm near Wellington at midday on Friday should be of interest to you.

It has everything, such as stabling, foaling barns, paddocks, stud facilities, two manager’s houses, as well as river and borehole water.

Phone Andrew Koch on 082-494-9631 to find out how to get to the sale.

Inland dwellers toying with relocating to Jeffreys Bay, or having a holiday home there, could consider the three-bedroom home in Hoepoe Street, Aston Bay, “with lovely views and a self-contained flat with a separate entrance” being auctioned by Colliers International Auctions tomorrow at midday.

It is labelled a bank auction, which may mean it’s a repossessed home, so it may go for a reasonable price.

On Tuesday at 10.30am Park Village Auctions will start disposing of plant and equipment from the liquidated Masingita Mining and Minerals of SA at Jan van der Merwe’s farm, 121km from Last Stop on Brits along the R511.

The equipment includes a dump truck, a front-end loader, a bulldozer, two shovel excavators and a special purpose flammable liquid trailer.

The new car market is taking strain but as prices achieved at auctions show, the used-car market is faring better.

It is bolstered by moneyed folk who buy what they want for less than if they were to buy it new — but not at give-away prices.

Last week Park Village Auctions knocked down a 2007 Lamborghini Gallardo for R2.375-million. That’s more than twice the R1.06-million it got for a four-bedroom (all en-suite) house with four carports, and a face-brick building with nine bedrooms, all en suite, on the same property.

And, as Aucor showed at its used truck sale in Bapsfontein last Tuesday, buyers are prepared to pay for late-model trucks built by reputable manufacturers that have been well maintained.

A 2008 Freightliner Argosy CAT C15-515 6x4 Horse went for R770000 and a 2007 model of the same vehicle went for R610000.

The Times - Johannesburg, Gauteng, South Africa

South Africa's slums grow, despite housing drive

2009-04-19T15:26:00.000+02:00

CAPE TOWN (AFP) — Even as the government has built millions of homes since apartheid ended, the shantytowns keep growing, turning housing into one of the key issues in general elections due Wednesday.

Under apartheid, blacks had been forced to live on the edge of cities, where overcrowded and poor slums grew.

Elizabeth Toll has a million dollar view.

But as the sun dips behind the mountains enclosing the picturesque cove where she lives, she shivers inside her tiny wooden shack, the raging wind whistling through her corrugated iron roof.

Above, more shacks balance precariously against the mountain, just a stone's throw from a popular tourist spot outside Cape Town.

The 49-year-old has lived on this prime patch of land for 15 years, fought a legal battle to avoid eviction, and is still "waiting, waiting, waiting" for a house from government.

"I applied many years ago, but nothing has happened. I haven't given up hope," she says, coughing with a cold as she clutches a small worn slip with a reference number and a housing department stamp.

Toll is one of millions of South Africans still living in shacks.

Kailash Bhana, chief executive of the Development Action Group (DAG), a housing advocacy group, says that while the government has built an impressive 2.8 million houses in 15 years, the situation is still dire.

"Overall the South African government has performed in terms of numbers. No one can deny that given the backlog that they started off with. It is the quality of the housing and the access to services that is being questioned."

Critics argue that the government's housing scheme has reinforced apartheid-era urban planning, keeping the poor on cheap land in inferior houses far from urban employment, schools, healthcare and other services.

Moegsien Hendricks, the group's programme manager, warned South Africa could end up with giant slums such as those in India and Latin America.

"All the evidence is there to suggest we are on our way to having mega slums," he said.

Itumeleng Kotsoane, director general of the housing department, told AFP only 1.1 million South African families now live in shacks, but DAG figures show the backlog growing at 200,000 households a year.

Kotsoane admits that the government's initial drive to build a million houses in only five years resulted in shoddy workmanship and poor planning.

"Before we were looking at numbers, now we are looking at housing opportunities," he told AFP, saying policy had shifted to creating better neighbourhoods and discouraging urban sprawl.

Rising property prices are one of the main challenges, forcing even teachers and nurses to live in informal settlements as they cannot afford to rent close to the city.

"Unless the state intervenes in the land and property market it is never going to meet the backlog," said Hendricks.

A small community 40 kilometres (25 miles) outside of Cape Town in the vast dusty expanse called Mitchells Plain are living in houses brightly painted in red, pink, yellow, and blue after 17 years on housing waiting lists.

But the numbers of people milling around in the heat of the day show the high level of unemployment, with many unable to afford the 15 rand (1.60 dollar, 1.28 euro) taxi fare into the city to search for work.

Already graffitied expletives mark the walls of the new community centre, theft is rife and single mothers with up to seven small children live on their own with no income.

"The South African housing scheme is unsustainable outside a broader economic strategy. People live beyond housing," said Aaron Hobongwana, a development specialist.

"Even if people don't have permanent jobs, if they lived in the CBD they could wash someone's car ... It's a vicious cycle."

AFP

On Verge of Penetrating SA Housing Market

2009-04-14T15:12:00.000+02:00

WINDHOEK – A top official of the National Home Builders Registration Council (NHBRC) in South Africa recently held intense discussions with a Namibian construction company, Trans Atlantic Enterprises, to enhance its chances of formally operating and competing in the housing construction industry in the neighbouring country.

Dr Jeffery Mahachi, executive director of Technical and IT in the NHBRC in Johannesburg, held fruitful discussions with Heinrich Schroeder, founder of Trans Atlantic Enterprises, and James Arm, Kavango Block Brick marketing manager in the capital.

“Discussions were held to streamline and finalise acceptance of our company’s innovative Kavango Block Brick construction system to fit in with the South African National Building Regulations,” said Heinrich Schroeder.
The NHBRC, which provides a 5-year warranty against housing structural defects, is a South African legislative statutory body with a mandate to regulate the home building industry and to protect the housing consumer.

“To us NHBRC approval will open many doors in the building industry as financial institutions would gladly finance housing construction projects using the Kavango Block Brick system. This in effect will mean that our building system will comply with the stringent quality control and proven accepted building standards specified by the National Building Regulations,” said James Arm.

It is a regulation in South Africa that all homebuilders are NHBRC registered prior to delivering domestic housing.

“The Kavango Block Brick has received major interest and recognition from South African communities over the past few years. Our company is currently finalising an application for NHBRC approval in order to deliver housing in South Africa. We are confident that final approval will be issued in the near future, considered to be a milestone for our Namibian company. This will allow us to compete across our border in South Africa. It is my opinion that the time is set for a Namibian company to export its technology to SADC, making a significant contribution towards addressing the housing backlog in the SADC Region,” said Schroeder.
According to Arm, Kavango Block Brick has achieved a major milestone during the past six months, the completion of a Kavango Block Brick house near Cape Town for public viewing.

“Further projects the company will be involved with include the ABSA/NHBRC International Housing Innovation and Sustainable Energy Efficiency competition to take place in the Western Cape, and participation in this year’s Southern African Housing Foundation Innovative show village in Swakopmund in July,” said Arm.

New Era - Windhoek, Namibia
Frederick Philander

Couple win gruelling case against builder

2009-04-10T15:14:00.000+02:00

A GRUELLING civil court case between a couple from Gordon's Bay and their builder ended this week after eight years. Builder Pierre Kotze was instructed to pay damages after his work was found to be sub-standard and unsafe.

Mr Kotze started work on alterations to the Solomons' multi-storey house against the mountainside in Gordon's Bay in January 2001. The contract ran late and Mr Kotze's company was eventually ordered off the site after a consulting engineer told the Solomons the standard of workmanship was poor and unsafe.

In his verdict, Mr Van Reenen dealt with a number of issues relating to the dispute, among them Mr Kotze's claim to the Solomons that he was registered with the National Home Builder's Registration Council (NHBRC). The magistrate said that when challenged in court, Mr Kotze was at a loss to confirm this.

Mr Van Reenen said he was particularly impressed by the testimony of an expert witness for the Solomons, whose own report in his capacity as consulting civil engineer, had condemned the builder's work.

As for Mr Kotze's expert witness, engineer Lourens van der Westhuizen, the magistrate said he himself had conceded the workmanship had been poor, lending support to the plaintiff's case.

Mr Van Reenen did not agree with Mr Kotze's attorney that Mrs Solomon had been an untrustworthy witness and said Mr Solomon's e-mail communication to the builder had been "clearly diplomatic, even though he was not happy [with the state of affairs]"."He wanted to keep Mr Kotze focused on the project," Mr Van Reenen said, adding that it was a pity the Solomon's offer that the dispute be taken to arbitration had not gone ahead. "This would have saved much time and money."

The magistrate said Mr Kotze had been an aggressive witness and that on numerous occasions had been instructed in court to contain his temper.

"At times when [the Solomon's attorney Ludolph Joubert] asserted Mr Kotze had contradicted himself, he simply refused to answer the questions.

"One of the problems here was that I believe Mr Kotze underquoted on the project and realised mid-way into the work that he had done himself in," Mr Van Reenen said. "Mr Kotze was clearly not up to the job."

In an unrelated case, an investigation is underway into the questionable tactics of a builder, who operates in the Helderberg and Stellenbosch area.

He is notorious for not showing up after a deposit has been paid into his banking account, and because the work is of such bad quality - often the result that clients chase him away. The senior public prosecutor requires more evidence for a successful prosecution. It is believed that several clients have become victims of this man. Anyone who believes they've been a victim, is requested to phone Leon Alhadeff on (021) 557-8669 or (021) 556-4690.

www.news24.com
Clifford Roberts

Rate cuts not only focus - Mboweni

2009-03-25T15:36:00.000+02:00

As he cut the Reserve Bank's official repo rate by a full percentage point yesterday, governor Tito Mboweni said: "The world has changed radically." He warned: "Nobody must think the cure for the rapidly changing global and domestic situation is just monetary policy."

Pressed on how quickly interest rates might fall, he said South Africa needed more than monetary and fiscal stimulus.

"There is a danger that in the current debate many countries might forget one of the critical issues confronting economic policy is structural change. It would be folly for us in South Africa to forget that we have a lot of work to do in terms of industrial policy and focus only on the financial market crisis."

Mboweni reported that South Africa's current account deficit had fallen to 5.8 percent of gross domestic product (GDP) in the fourth quarter from a revised 7.8 percent in the third. The deficit - the gap between export revenue and import costs - is the lowest since the third quarter of 2006, when it was 5.5 percent. It averaged 7.4 percent last year, reaching a quarterly peak of 9.2 percent in the first quarter.

Mboweni warned, however, that the R17.4 billion trade deficit in January was a sign that the fourth-quarter improvement might not last.

Currency traders paid more attention to the warning than the fourth-quarter figure. After initially strengthening, the rand lost ground to close at R9.4625 to the dollar.

Jeff Gable, the head of research at Absa Capital, said that if the contraction in the current account deficit continued, the risks to the rand would be much reduced.
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The cut in the bank's repo rate to 9.5 percent brought relief to hard-pressed consumers as benchmark prime and mortgage rates fell to 13 percent from a peak of 15.5 percent in December. For a home owner who had borrowed R1 million, it will cut the monthly mortgage repayment by R719 to R11 716. Since rate cuts started in December the monthly repayment on a R1 million loan has fallen by R1 823.

John Loos, a property strategist at First National Bank, estimated the cost of servicing debt at about 11.7 percent of household income, "based on the assumption that the average interest rate on all loans is prime rate and average term of loan is 10 years". However, if capital repayments were included, "the ratio rises to nearly 15 percent".

Mboweni warned the public not to assume that the increase in monetary policy committee meetings from once every two months to once a month meant rates would be cut at each meeting. He again referred to the widening in the output gap - the difference between the potential and the actual output of the economy.

South Africa has 4.5 percent potential for growth and the economy shrank nearly 2 percent in the fourth quarter of last year. In the circumstances, pressure on inflation is much less than when actual growth was more than 5 percent.

It will need cuts of a further 2.5 percentage points to take consumers back to the start of the rate rising cycle in June 2006. Even then, it will be quite some time before consumers recover their confidence and resume spending.

www.busrep.co.za
Ethel Hazelhurst

House prices: dipping or diving?

2009-02-16T15:32:00.001+02:00

"South Africa is now joining an international landslide in this sector". That was the stark warning about the country's residential property market, issued by the Alliance Group's chief executive Rael Levitt this week after the release of his company's Distressed Asset Index results.

But estate agents have been issuing statements, suggesting we are not far from the bottom of the cycle. Who is right? Should you buy now?

House prices "diving" - the auctioneer's view

Home repossessions, insolvencies and distressed residential property sales "jumped alarmingly" in the last quarter of 2008, Levitt notes.

He says the residential property market is now in the third quarter of a technical recession. The index, which tracks various distressed asset classes, shows that the residential property market is in a deepening recession, house prices are continuing to fall and interest rates cuts are having a muted effect on mortgage arrears.

"Despite sunny optimism from many residential agencies, the reality of the housing market is that it is going through a startling downward correction," he says.

Levitt says housing price deflation is being fuelled by banks that are reassessing their exposure to the home loans market and being cautious in granting new mortgage loans.

"As bad debts spiral, banks are writing down their balance sheets and have made access to new home loan financing as tight as was last experienced in the early 1980s. There is little comfort to be taken from the current raft of available figures, with a shrinking economy, rising unemployment and falling house prices," says Levitt.

The Alliance Group believes negative housing equity - where your home is worth less than you owe on it - is now most probably at 1 in 15 South African homes.

"Those who are in mortgage arrears and are in the position where their outstanding finance is above their house's current market value and they are caught in a debt trap. Many people are sadly trapped in a home worth less than the loan they took out to pay for it," says Levitt.

The Alliance Group Distressed Asset Index tracks mortgage stress, which it has defined as mortgage holders who have been in arrears for two months or less. Mortgage stress has sharply increased from 75 000 in the third quarter of 2008 to 130 000 in the last quarter of the year.

"The rapid escalation of those in mortgage stress has picked up pace into 2009 despite interest rate cuts and we expect some very poor results in the first quarter of this year". More concerning, says Levitt, is severe mortgage stress where bondholders are over four months in arrears and likely to lose their homes. Severe mortgage stress catapulted from 8 000 in the second quarter of 2008 to over 35 000 in the last quarter.

Levitt says: "Despite a downward trend in interest rates, we are seeing severe mortgage stress continue to grow. Currently there are approximately 1 200 houses per month which are being sold forcibly through legal channels which include sales in execution, insolvency sales and banks' voluntary distressed sales channels.

"One of the positive indicators that the residential property market is still active is that buying activity of distressed houses has surged. Distressed auction floors across the country are burgeoning and there are hordes of opportunistic buyers looking to pick up properties at lower prices. In the last downturn banks couldn't give away distressed properties and had to keep them on their books as properties in possession. Now, there are multitudes of buyers who have access to financing and see the current period as a period of opportunity as unprecedented volumes of houses hit auction floors."

According to Levitt, the only factor that can alleviate severe mortgage stress will be aggressive interest rate cutting. "The Reserve bank will have to follow international central banks in applying far more severe rate cutting. What we have seen to date from their Monetary Policy Committee is too re-active and too slow. Financially distressed South African households are crying out for significant interest rate cuts and while the Reserve Bank concerns itself with targeting inflation, many families are simply interested in targeting to retain a roof over their heads".

Unfortunately interest rates cuts are having a limited effect on property values, says Levitt, who points to the UK and USA, where interest rates are heading towards zero yet house repossessions have remained at historic levels.

Internationally distressed housing markets have continued to grow and are fuelled by a collapse of household balance sheets and the inability to raise new financing. According to Levitt, over the last two decades, South Africans have become used to recessions but these have been alleviated by reductions in interest rates which have created credit-induced spending and caused house prices to grow.

"But this recession is different", says Levitt. "With a triple whammy of a deepening global recession, job losses and a constrained financial sector, this downturn is differentiated from previous forms which were largely interest rate-driven".

"Worryingly, the knock-on effect of a housing market in recession is the inevitable cutback in households which are rapidly cutting back on consumption and the demand for new housing". There has also been a sharp spike in company liquidations of residential property developments and allied services. "Many residential property developments are in real threat of hitting the wall and recently we have seen liquidations of well known property developers which cannot sustain themselves".

"Throughout most of last year, the sector of the residential market that was most affected were the single residential units, previously valued in the R1m - R3m category with particular problems in the secondary and leisure housing markets. By the last quarter of 2008 residential developments, development land and incomplete developments were the sectors which were experiencing most of the pain. In mid-2008 the upper end of the residential market and particularly the luxury market over R10mi was not affected by the downturn as wealthy buyers continued investing in affluent areas. Now there is no doubt that these markets are being affected and whilst there is still muted buyer demand, buyers are now dictating prices".

"House price deflation may start to bottom out in late in 2009, but unless we see significant rate cuts this year, distressed homeowners will lag the market by two quarters. However, continued contraction in credit availability, lower loan-to-value ratios and increases in funding costs for borrowers will continue to put downward pressure on values. What the credit boom gave, the crunch may take away."

House prices dipping - the estate agents' view

Mike Greeff, CEO of Greeff Properties, like many other estate agency bosses takes comfort from the latest figures from Absa Homeloans. He says these "indicate clearly that in 2008 house price growth slowed noticeably in all price categories and across most of South Africa - but the overall picture is nowhere near as bleak as many property watchers would have us think."

"Absa's prediction is a 2,5% nominal house price drop in 2009, but it should be noted that the Western Cape, with a 5,2% overall price rise, was in 2008 the outstanding performer in SA. Cape Town itself should see a 2,4% nominal price increase."

"It has to be remembered that from 2004 to 2006 prices rose roughly 30% per annum. Any purchase before this date is, therefore, still showing an exceptional capital gain and will probably see a doubling of his home's value by late 2010.

"With an anticipated drop of 3,5% by October 2009 now would, in my view, be a good time to get into residential property. The current period must be close to the imminent bottoming out of the market," he says.

Like Greeff, Laurie Wener of Pam Golding Properties says "it's not all doom and gloom". "It is undeniable that there has been a downward trend in the property market and a reduction in transaction volumes, resulting in downward pressure on prices," says that group's MD for the Western Cape metro region.

"Certain suburbs as well as specific types of homes are bucking the trend, and continuing to attract high levels of demand and even top prices. A handful of top-end properties which are iconic or individualistic in terms of design, position and finishes, sometimes defy market trends, as they can only be acquired at a price acceptable to the seller. These sellers are often prepared to wait for the right price, or especially for a cash buyer. This trend generally occurs in upmarket areas such as Clifton, Bantry Bay, Camps Bay, Upper Constantia and Bishopscourt. "

Figure were up for Wener's organisation for January, with more sales, more interest from potential buyers, and better attendance of show-houses. "There has also been significant improvement in the lower-priced segments which were initially hardest hit when the market started cooling, but are now picking up noticeably."

This is especially true, says Wener, of the lower-end price ranges in the Atlantic Seaboard and Southern Suburbs (up to R2m, and particularly in sectional title sales) and in the Northern Suburbs (residential sales up to R3m).

There is "no denying that some areas have been hard hit by the downturn, particularly where buyers typically have high mortgages relative to value.

Wener says in areas where there has been high investor activity over the past 18 months or so, like Cape Town's inner city, owners may now find it difficult to recover their costs in the current market. "Our advice to investors/owners would be that if it is at all financially feasible for them, they should try to hold onto their properties and rent them out until the market recovers, rather than sell now at a loss. The market will recover and they will see capital growth again."

Cash buyers remain at a significant advantage in the current market, adds Wener, as banks continue to tighten their lending conditions even further. "Whilst the latest reduction in interest rates announced on 5 February is a welcome step for home-owners," she says, "the ongoing conservative approach being taken by banks towards their loan criteria and reduced mortgage loan budgets will dilute its positive effects to some degree."

Realestateweb.co.za

Bad builders: what to do?

2008-12-04T17:05:00.001+02:00

Before you sign a contract with any builder, check references as banks do not protect clients from unscrupulous builders, says home loan executive.

Property owners are often ripped off by builders. Some do not complete building the house, others build poor quality and sub-standard houses, said Luthando Vutula, managing executive of Absa Home Loans.

Vutula said where a property owner finds him or herself in such a situation, banks do not protect the owner from the builder.

The contractual obligation that banks have with the client is in terms of the mortgage loan agreement, said Vutula.

He advises that before an owner employs the services of a builder, he or she needs to ensure that they fully understand the content of the building contracts that they sign.

In particular, pay attention to payment clauses, the building specifications and time clauses.

"Always conduct reference checks on the building contractor before signing agreements," he said.

Where the owner is not satisfied with the standard and quality of work, speak directly to the builder or developer (whichever is applicable).

This engagement will give the builder the opportunity to address concerns expressed by the owner and rectify the problem.

If no resolution is reached , as a last resort the owner can instruct the bank to make no further payment on the building until the work has been done to the owner's satisfaction and concerns fully dealt with, said Vutula.

Banks are not party to the building contract signed between the client and the builder.

For this reason, any disputes between the two parties should be taken to the National Home Builders Regulatory Council (NHBRC), a body which protects the interest of consumers and regulate the home building industry.

Vutula said the NHBRC protects consumers from builders who either build to an unacceptable quality standard or builders who refuse to get involved in the rectification of built-in defects in the home.

Although the bank cannot recommend builders to its clients, the legislation stipulates that all builders involved with building projects that are subject to a mortgage loan should be registered with the NHBRC.

Information on registered builders can be obtained form the NHBRC, said Vutula.

While building contractors are not the same, it remains the owner's responsibility to carefully peruse the contract before signing. It is advisable to obtain legal advice for clarity on the contract terms and conditions to avoid unpleasantness with the builder at a later stage, he said.

For example, said Vutula, the client is obliged to pay the builder for work that is satisfactorily completed and the builder has obligations to provide his services as per stipulations in the building contract.

When a client applies for loan on building works on their property, the bank appoints a valuer whose does checks on the construction or building site to ensure work is being carried out in accordance with the minimum building requirements and plans submitted to the bank.

"The client has a right to withhold payment from the builder if the work done is not up to standard," said Vutula.

If this happens, the client should first familiarise themselves with the contract and also be aware of their legal position regarding withholding funds, said Vutula.

He added that the bank can only act on instructions from the client to not to proceed with payments to the builder.

Denise Mhlanga
Realestateweb.co.za - Johannesburg,Gauteng,South Africa

Mhlahlo engineers a turnaround in housing.

2008-12-04T17:00:00.000+02:00

AFTER taking office in August, Housing MEC Thobile Mhlahlo vowed not to allow a cent of his R1,2-billion in conditional grants to remain unspent, and set the department a target of building 15000 new homes before the end of this financial year.

He said the department would recall allocated budgets from all municipalities that were not spending them, so they could be redistributed to other projects.

“At the beginning of this term I called public and private sector financial institutions together at a breakfast meeting to introduce my ambitious multi- million-rand housing turnaround delivery plan.”

He said major banks, including Absa, FNB, Standard Bank and Nedbank, as well as other public and government financial institutions such as the Development Bank of Southern Africa (DBSA), the National Housing Finance Corporation (NHFC) and the National Urban Reconstruction and Housing Agency (Nurcha) were already working with his department on housing projects.

About R464-million of the conditional grants have already been spent, and Mhlahlo has approved funding amounting to R285-million for other housing projects in the province.

“The consultative breakfast meeting was a culmination of meetings that I had with contractors, municipalities and NHBRC as part of my intervention plan to remove stumbling blocks (projects that had stalled due to lack of finance) in the province.

“After the meeting with all the banks I had individual one-on-one meetings with Absa, FNB and Nedbank.

“FNB has purchased a pineapple field near the Da Gama Textiles factory on the way to East London that is big enough to build 6000 houses on and I have appointed a task team to facilitate the process of engaging other stakeholders like Buffalo City to come on board.”

Mhlahlo has handed over 500 houses from the Sundays River municipality, 300 in the Nomathamsanqa township in Addo and 200 in Kirkwood.

Some 5475 houses will be handed over in Nelson Mandela Bay shortly. Of these, 900 will be handed over in Joe Slovo before Christmas, while others will be handed over in areas like Bethelsdorp, Matthew Goniwe and Chatty before the end of this financial year.

“Some of the beneficiaries of these houses are seasonal farm workers who depend on old age grants, domestic workers and other people who earn less than R1000 a month,” he said.

Mhlahlo also introduced the Sakhi‘themba graduate development programme in October.

“The project is aimed at creating employment opportunities for young people and also to address the challenge of lack of monitoring.

“It will also be reviewed after two years.”

Some of the problems Mhlahlo said he had faced during his 100 days of office included:

Contractors assuming developer status with limited capacity and resources.

Slow implementation of projects by implementing agents.

Slow processes of municipalities – especially on blocked projects.

Poor performance of contractors.

Lack of monitoring and evaluation of projects.

Land availability.

“We have tried to solve some of these problems, but now the biggest challenge we are facing is that of municipalities not spending the monies allocated to them.

“We have found that they do want to spend the money but many did not know how. My department is assisting those municipalities that want to be helped,” he said.

Khanyi Ndabeni
The Herald Eastern Cape - Port Elizabeth,Eastern Cape,South Africa

Residents live in fear of collapsing mansion

2008-11-13T08:02:00.000+02:00

This is the hillside mansion residents live in fear of. Now the City of Johannesburg wants the High Court to order its demolition.

But residents of Quellerina, in Roodepoort, fear the order will come too late.

Perched atop a ridge, the triple-storey house is cracked and a large part of its retaining wall has collapsed.

Several properties lie below the house, all in serious danger should it collapse.

The problem, the municipality and other building officials have said, was evidence of shoddy workmanship.

Poor design, poor-quality building materials and poor workmanship have all been blamed for the situation.

Council spokesperson Nthatise Modingoane said the council had compiled a report which would prove the house was "an imminent danger".

He refused to reveal who the house's owner was or why the council had allowed the building to be put up.

"The matter is being dealt with by the city's development planning and urban management department, and it is at an advanced stage," he said.

However, residents are scared now that it's the rainy season.

"We find ourselves thinking that it is going to collapse (every time it rains), but the council won't do anything about it until people are dead or property is damaged," said resident Natalie Pereira.

"Walls started coming down seven months ago and we immediately notified the council, but we're still waiting."

Local councillor Steve Kotze said it was surprising that the structure had been allowed to go up while the council was supposed to have been monitoring safety and quality standards.

"Looking at those cracks, one wonders if the council had approved the house plans at all. If people are killed, what sort of excuse are we going to have from the council?" he said.

"This is a matter of life and death and I think something needs to be done to save lives and property while awaiting the court order."

The Star took the matter to the National Home Builders' Registration Council (NHBRC), which protects the interests of builders and homeowners, regulates the industry and monitors standards.

After visiting the property in Maluti Street, an NHBRC official's report agreed that poor workmanship was at fault, and it also identified other problems.

"The property poses a serious threat to life as well as to other properties downhill. Serious measures must be taken urgently in order to protect lives," the report found.

NHBRC head Phetola Makgathe said either the contractor or the engineer could be blamed for the problem.

"The engineering fill was not properly compacted, hence the retainer wall falling. The engineer who approved the structure could have monitored the compaction," he said.

"The builder has deviated from normal building standards in that he did not use any brickforce in walls, and slabs were not properly reinforced."

Makgathe said one option besides demolishing the house was to seek an engineering solution. This meant finding a qualified and approved engineer who would redesign the whole structure.

"This could mean half of this house must be reconstructed, and that could cost three times more than the original building cost.

"A structural engineer would also be needed to monitor reconstruction of the house, especially the retaining walls," Makgathe said.

All attempts to contact the owner of the house, who is known to The Star, failed.

A reliable source within the municipality said the owner was attempting to halt the demolition of the house, saying he would repair the dwelling and sell it to recoup his losses.

Meanwhile, Quellerina residents hope the house stays intact until a demolition order has been obtained.

By Poloko Tau
www.iol.co.za

Gang of 15 caught in the act on CCTV

2008-10-23T14:27:00.000+02:00

These hoodlums were captured on security cameras cleaning out the offices of the National Home Builders Registration Council (NHBRC).

Now police are looking for them.

The footage, which was handed to the Randburg police, shows a group of about 15 men entering the NHBRC offices in Bryanston on the night of July 27.

Security manager at the facility Willie Meela said the group gained entry to the premises by telling the staff at the gate that they were delivering parcels.

On the video footage one of the thugs can be seen entering the reception area with a parcel marked NHBRC.

While security personnel prepare to fill in a parcel register a second man, also armed with a phoney parcel, enters.

One of them draws a gun and instructs the two officers to kneel down. Once they have tied them up other accomplices can be seen entering the building.

Without any hesitation the two thieves dismantle a Plasma TV hanging on the wall, while the rest go to the storeroom and begin removing new computers, laptops, LDC monitors, Sonny projectors and servers worth R671000.

Another thief can be seen opening a gate leading to the basement so that a bakkie and a car can enter. The two cars swiftly pull off after being loaded with goods.

Their luck ran out when, a few weeks later, police spotted the van used in the operation loaded with computers stolen from another company.

Meela said: “After effecting an arrest police discovered that the owner of the van was being held at the Hillbrow police station in connection with an unrelated crime.

He said four suspects, believed to be members of a syndicate, are foreign nationals. Anyone with information can contact detective Moloko Motau on 072-675-4540 or Willie Meela on 079-529-6218.

Cecil Motsepe
www.sowetan.co.za

New foundation technique gives hope for RDP houses

2008-10-02T08:34:00.000+02:00

A BRAND new civil engineering franchise in the Eastern Cape claims to have the answer to building good quality RDP houses.

GeoBUILD Eastern Cape last week demonstrated to Nelson Mandela Bay officials and contractors an innovative method of constructing foundations which could save money and time, as well as improve the quality of houses. On a recent visit to the metro, Housing, Safety and Liaison MEC Thobile Mhlahlo highlighted various problems contractors faced delivering high-quality RDP houses, including high costs, time constraints and problematic surfaces such as clay at the sites for these houses.

GeoBUILD uses a construction product, approved by the National Home Building Regulation Council (NHBRC), called Multi Modula.

Small hollow pods made from recycled polypropylene are packed over a levelled footprint area. Concrete is then poured over them. Structural engineer and GeoBUILD director Henk Fourie said the method used 47 per cent less concrete and 35% less steel than traditional methods, was easy to implement, and sorted out problems related to clay.

The method has been used around the world for the last 22 years and in South Africa for the past 18 months, during which 13000 RDP houses have been completed using the method.

Municipal spokesman Lourens Schoeman said the metro would be discussing GeoBUILD‘s construction method.

Yolandé Hayward HERALD REPORTER
www.theherald.co.za

Nearly 20000 EC houses identified as defective

2008-09-16T08:24:00.000+02:00

NEARLY 20000 houses in the Eastern Cape have been identified as defective, Housing Minister Lindiwe Sisulu has told the National Council of Provinces.

Replying to a written question from Watty Watson (DA), the minister said that 19953 houses that had been built in the Eastern Cape were defective, with 150 units at “various states of completion”. The total cost of repairing the houses is about R99,7-million.

Sisulu said provincial housing departments had initiated a process to determine the number of housing units with building defects.

Various methodologies such as surveys and requests for beneficiary applications had been used to determine the projects involved and the number of units with defects that needed to be repaired.

The services of the National Home Builders Registration Council (NHBRC) were being used “to ensure that the same contractor who initially built the units, is not appointed to do the rectification and that contractors appointed adhere to the necessary requirements”.

She said the verification process to date had revealed a number of projects with some sub-standard workmanship and the findings had been forwarded to the relevant provincial departments “for further investigation”.

Patrick Cull - POLITICAL CORRESPONDENT
The Herald

Builders' Gripe with NHBRC

2008-08-26T14:58:00.001+02:00

IN light of recent issues highlighted by key industry bodies, the Master Builders Association of South Africa (MBSA) as well as a number of construction industry associations and industry professionals - including engineers and architects - met last month in Cape Town to discuss the role of the National Home Builders Registration Council (NHBRC).

According to Rob Johnson, executive director of the Master Builders Association of the Western Cape (MBAWC), the meeting was called to examine recurring issues faced by individuals and organisations when dealing with the NHBRC and to discuss a way forward to avoid such occurrences in future. “We decided it was about time that the relevant parties joined forces to resolve the ongoing problems that have been highlighted by a number of our members. The aim of the meeting was to discuss the issues at hand and decide on a constructive way forward.”

Topics brought to the attention of the chair included, among others, the lack of service delivery, inadequate communication from the NHBRC, unfair enrolment procedures and problems with the handling of non-compliances.

The meeting was attended by representatives of the NHBRC, including the chairperson Sibongile Nene who addressed the audience and said that she was happy that the forum had been called and that a united step forward was the only way to resolve current issues.

Johnson explains that a task team will now be established to present the issues discussed at the meeting directly to the NHBRC in an attempt to facilitate a resolution. “We are aware that the problems cannot be resolved overnight, but we feel that this is a step in the right direction and both the NHBRC and the MBSA are committed to positive change and the improvement of procedures to strengthen our industry,” says Johnson.

The Master Builders and Allied Trades’ Association (MBA), Western Cape, is a registered trade association for employers in the building industry. Its membership comprises some 400 companies, most of whom are either builders, building subcontractors, building merchants or manufacturers of building products.

Membership of the MBA is on a voluntary basis. Its members handle some 70% of all the building work in Cape Town and employ a similar percentage of the total building industry workforce.

Apart from campaigning for continually higher standards, the association also plays an active role in industrial relations, the drawing up and adaptation of the building contract law, safety procedures and, most importantly, training.

“In the last field, particularly, the MBA, Western Cape has for many years been the acknowledged leader.”

“Some 50% of all the training done for the building industry nationwide takes place in the Western Cape - and we have a proud tradition of producing skilled and semi-skilled people who have worked on major projects all over Southern Africa,” says Johnson.

Article by: Cape Business News
www.cbn.co.za

South Africa: Poor Residents Again Face Eviction from Poorly Built ...

2008-07-18T09:55:00.000+02:00

Hanover Park – In 1994, then president Nelson Mandela promised to build one-million homes. In 2000 the Cape Town Community Housing Company (CTCHC), a private company, was entrusted to help make this promise of Mandela a reality by becoming a housing delivery vehicle for the government. In the process, they build 2,193 houses on a 'rent to buy' basis in 9 communities across the Western Cape.

In order to make the houses affordable to the poor, families were requested to save between R150 – R350 per month over a period of six months before moving into their new homes. They claimed that this amount would be equal to their monthly rental...

However, during the course of the remedial programme, we have established that the NHBRC Forensic Audit and Assessment is flawed and full of shortcuts...(Read Full Article)

Anarkismo.net

Builders on hold due to council's backlog

2008-06-09T11:38:00.000+02:00

The National Home Builders' Registration Council (NHBRC), which regulates the home building industry and protects the interests of housing consumers, has a backlog of housing unit enrolment applications due to a recent strike by the council's staff and Eskom's load shedding. This has put cash flow pressure on some construction companies.

Some builders claimed the delay by the NHBRC in issuing certificates affected their cash flow as banks refused to release any loan funds for housing units until presented with an NHBRC certificate.

The delay in conducting inspections was also a problem as it meant the next phase in building could not commence.

Phetola Makgathe, the NHBRC's chief executive, confirmed on Friday that the organisation had a backlog in enrolment data it had to capture but was unable to quantify it or say how long it would take to eradicate.

However, Makgathe said it outsourced inspections and inspectors were not on strike.

Makgathe said the NHBRC did a quality assurance audit on the inspectorate and this had not taken place during the strike, but the backlog in inspections was small.
Click here!

He confirmed the generation of new enrolment certificates was affected by the strike and recent load shedding, and was of concern. But he said the strike did not affect all nine provinces and the NHBRC had acquired its own generator to deal with load shedding.

The NHBRC had written to banks to request them to relax their requirements on enrolment certificates to allow construction to commence.

Makgathe said the NHBRC was dealing with the backlog but he was unsure how much progress had been made.

He said the strike by members of the National Education, Health and Allied Workers' Union (Nehawu) members at the NHBRC had lasted for about a week and had ended on May 26.

Makgathe said Nehawu members were striking about a performance bonus grading system. The union had given in and the offer by the NHBRC stood.

By Roy Cokayne
www.busrep.co.za

NHBRC Strike

2008-06-02T08:35:00.000+02:00

We have been informed that all offices are open.

NHBRC Strike.

2008-05-30T09:56:00.001+02:00

The Facilitators have been informed that Gauteng (Bryanston and Tshwane) has gone on strike again.

We can confirm that Witbank, P.E. and Cape Town did work today, but we have not been able to confirm with the other regions.

As always, we will keep you informed of this unfortunate situation.

NHBRC Strike is over.

2008-05-27T15:55:00.000+02:00

The Facilitators have been informed that the strike is over and that staff has returned to work.

We have been advised that the NHBRC have put procedures in place to deal with the back log as a matter of urgency. We will keep you up to date with any further developments.

NHBRC Strike

2008-05-22T15:54:00.000+02:00

The NHBRC has been on strike since the 14th of may over a pay dispute. This means that they are unable to process any submissions.

We advise that you contact us in advance and as soon as possible for any new submissions so we can prepare the documentation as we are expecting delays due to the back log of Enrolment and Registration applications.

We will keep you informed on any further developments as we receive further information. We apologise for the inconvenience, rest assured we will be following up regularly and will inform you of any further developments.