De­vel­op­ments in re­cov­ery

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POS­I­TIVE PHASE There are a few early signs of re­cov­ery in the de­vel­op­ment mar­ket, af­ter this sec­tor’s en­dur­ing a par­tic­u­larly dif­fi­cult time over the past 18 months, says Lau­rie Wener, Pam Gold­ing Prop­er­ties’ MD for the West­ern Cape metro re­gion. But she cau­tions that there is still a long way to go.

“The re­ces­sion took its toll on de­vel­op­ments, es­pe­cially in the off-plan pur­chase cat­e­gory, which con­sti­tutes the ma­jor­ity of its sales,” says Wener. “One of the main ad­van­tages to buy­ing off-plan is that, in a steadily grow­ing mar­ket, one ben­e­fits from the buy-now-pay-later prin­ci­ple, where buy­ers pay a 10% de­posit and the bal­ance on trans­fer at com­ple­tion — by which time the prop­erty would have al­ready grown in value. But of course with the mar­ket in a neg­a­tive phase, this ben­e­fit was lost, and with it a sig­nif­i­cant pro­por­tion of the ap­petite for off-plan pur­chasers.

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