Best places to buy and sell
The German capital of Berlin has become the most profitable residential property market in the world, with average house prices up a hefty 21% last year.
Knight Frank’s latest annual Global Residential Cities Index, which tracks price movements in 50 markets worldwide, has three other German cities in its top 10 rankings for 2017 — Hamburg (14.1%), Munich (13.8%) and Frankfurt (13.4%).
It is the first time the index has included German cities in its rankings. The four cities mentioned are part of a relatively small group of global housing markets that still managed to record double-digit price growth last year.
Others include Izmir in Turkey, Reykjavik in Iceland, Vancouver in the US, Budapest in Hungary and Hong Kong.
Kate Everett-Allen, Knight Frank’s head of international residential research, notes that house prices have slowed globally in 2017, with the Knight Frank index recording average growth of only 4.5% in the fourth quarter of 2017, down from nearly 7% a year earlier.
The slowdown in China’s housing market had a notable influence on the index’s overall performance. Everett-Allen says the 15 Chinese cities tracked by the index averaged growth of 23% year on year in 2016. In 2017, the same 15 cities averaged only 1.6%.
Cape Town and Johannesburg are placed 26th and 89th, with average growth of 9.4% and 3.5% respectively, in 2017.
Local is lekker again
Property punters who placed their bets on SA-focused real estate investment trusts (Reits) at the beginning of the year are squarely in the money. That’s in sharp contrast with last year, when real estate counters with SA portfolios were out of favour and generally lagged behind their offshore counterparts.
The SA listed property index as a whole is down around 16% in the year to date (to April 12). However, the sector’s overall performance has been skewed by the huge drop in a handful of larger counters. The latter include the Resilient stable of companies (Resilient Reit, Fortress Reit, Nepi Rockcastle and Greenbay) as well as a few rand-hedge stocks such as MAS Real Estate, Intu Properties, Capital & Counties Properties and Investec Australia Property Fund. If these are stripped out of the equation, the performance of the sector has not been too shabby.
Figures from Anchor Stockbrokers show that the sector’s 10 best performers in the year to date (to April 12) all generate the bulk of their earnings in SA.
Moreover, the top stocks are primarily smaller companies with market caps generally below R7bn. Most of these counters appeared cheap at the start of the year and typically traded at attractive yields north of 10%, which suggests there has been a clear shift recently towards value.
The winning stocks include residential developer Balwin Properties with a share price jump of 22% in the year to date, followed by Fairvest (21%), — which owns a portfolio of small and mid-sized malls that cater to for lower-income shoppers — Fourways Mall owner Accelerate Property Fund (20%), rental housing plays Indluplace Properties (17%) and Octodec Investments (12%), Emira Property Fund (15%), and retail-focused Rebosis Property Fund (12%).
Analysts expect that property stocks with a focus on SA will continue their outperformance over the next six to 12 months due to rising investor sentiment under the leadership of President Cyril Ramaphosa and more favourable local economic growth prospects.
Last stands at Blair Atholl
Blair Atholl Golf & Equestrian Estate near Lanseria International Airport on Johannesburg’s western outskirts, widely regarded as one of Gauteng’s most exclusive residential addresses, earlier this month released its last 80 vacant stands for sale. Generously sized between 2,542 m2 and 5,607m2, the stands are priced from R1.565m to R3m. The estate, which was launched in 2007 and spans about 600 ha, was the former homestead of golfing legend Gary Player.
Like many other golfing estates that were launched at the height of SA’s previous housing boom, Blair Atholl ran into difficulties following the financial crisis and subsequent recession in 2009-2010. However, the estate is now solvent following the transfer of the ownership of all the common property from the developer to the homeowners association.
The estate offers an 18-hole golf course, a clubhouse, a fitness centre, a spa, an equestrian centre, tennis courts, a restaurant as well as extensive mountain biking, running and walking trails.
About 150 homes have already been completed at Blair Atholl, which Peet Strauss, Pam Golding Properties’ development manager for Johannesburg, says has an average value of R11.2m (according to latest Lightstone figures).
Strauss says this places Blair Atholl as Gauteng’s most expensive suburb.
The clubhouse at the 600 ha Blair Atholl estate.