WORDS: MIRIAM MANNAK & KIT HEATHCOCK IMAGES: SUPPLIED
Many property buyers prefer to purchase a new home over a second-hand property. A key drawcard is that this allows them to choose their finishes and sometimes even the entire layout and stand. Buying townhouses, homes, apartments and retirement units off plan is becoming increasingly popular. This type of property has several financial and practical advantages.
“In our experience, getting ahead of the curve by buying off plan with a reputable developer, has proven to be greatly beneficial for the investor. Not only does it give you the financial benefit of locking in a price and not being subject to transfer duty, but you’re also able to select – from the available range – the finishes you prefer. From a developers’ point of view, it’s these personal touches we can provide to early buyers, which add additional value,” says John Chapman, director, Rabie.
The older convention of a plot-and-plan sale means that a buyer purchases a plot, draws up plans and building quotes and applies for finance. Western Cape agency Harcourts Platinum says once finance is approved, the buyer takes transfer of the plot and enters into a building contract with a builder. As the building progresses, the builder is paid out in stages or draws funds, either from the buyer or the bank, until the property is completed. Harcourts says the benefits of such a purchase are that buyers can build the house to a budget, with their desired finishes.
The negative is that the buyer has to carry the cost of servicing a bond while the property is under construction. In addition, manage the whole process – the builder, payments, resolve unexpected issues, and carry the risk of delivery.
With off-plan purchases, financial benefits include not having to pay transfer fees. Off-plan costs are also fixed, unlike when building your own house.
“Building with your own contractors can cause escalating costs,” says Jessica Hofmeyr, sales, rentals, marketing and operations executive, Century Property Developments. “With an established developer, the off-plan process is less stressful than building your own home and is almost always quicker.”
Dealing with reputable developer members of the National Home Builders Registration Council may also trim costs. “This ensures a guarantee of three months regarding general defects, one year for roof problems, and five years for structural guarantees,” says Westbrook Property Developments MD Clifford Oosthuizen.
Off-plan apartments are popular with more South Africans chasing a lock-up-and-go lifestyle in luxury developments such as Tree Tops Houghton in Joburg. Featuring a luxury penthouse, lap pool, gym, garden and entertainment area, the complex comprises one-, two- and three-bedroom apartments starting at R1,65m. Buyers can choose between a classic or platinum package for appliances, flooring, wall specifications, and other finishes.
Listed developer Attacq has partnered with development company Tricolt to launch the first high-rise luxury apartments in Waterfall City – Ellipse Waterfall. Kent Gush Properties is selling this off plan.
Its luxury one-bedroom and two-bedroom apartments start from R1,625m for a one-bedroom unit and several duplex penthouses, which feature private rooftop gardens and heated swimming pools. Each apartment comes with modern finishes, eco-friendly features, high ceilings and high windows with Joburg skyline views. Ellipse Waterfall amenities include concierge services, 24-hour security, a business centre, a children’s game room, a library, restaurants, a gym, and a spa.
Cape Town, too, offers ample off-plan options. “We have off-plan apartments available at TENONQ in Sea Point and FORTY ON L in Bo-Kaap. These offer compact apartment living and shared amenities such as entertainment decks, gyms and pools.
The Aster in Oranjezicht at the foot of Table Mountain, has 21 off-plan units. The development by Horizon Capital Residential is smaller and more intimate than most. “It offers excellent security, a roof terrace, braai facilities and swimming pool,” says MD David Sedgwick. Apartments sell from R2,495m with completion due end of next year.
The Winelands is also worth exploring. Pam Golding Properties’ Bosmans Club in Stellenbosch comprises 46 apartments priced from R1,4m, and two new developments are The Niche, 51 apartments from R1,5m, and Beau Vie, 18 units directly opposite the engineering faculty from R1,995m. Accommodation in this university town is always in demand, which results in good investment opportunities.
“In 2015 a 70m2 two-bedroom unit in our Andringa Walk development sold for R2,85m. In 2016 such a unit fetched R3,75m,” says Louise Varga, area manager, Pam Golding Properties Stellenbosch. “The highest price achieved so far for a two-bedroom apartment resale was R4,7m.”
There’s a healthy appetite for plot-and-plan townhouses in Gauteng. Zotos Property Group reports excellent sales for developments such as Westside and Solmeri in Bryanston and Monarch on Kings, which is now fully sold out. They’ve just launched a new development of three-bedroom duplex townhouses in Bryanston called Skywood.
A much sought-after townhouse development in the Western Cape is Acorn Creek Lifestyle Estate. Situated near Somerset West, this tranquil eco-friendly estate by MSP Developments was designed to harmonise with its natural surroundings. “Many people are scaling down and want the ideal lock-up-and-go scenario, knowing that if they’re away for business or a holiday, their property is safe,” says development sales manager Werner Scheffer.
Developed by Century Property Developments, Blue Hills Equestrian Estate in Midrand takes the off-plan concept to a new level by allowing buyers to design their entire freehold home from scratch. “Each house has its own look and feel,” Hofmeyr says. “The average home is more than 1,000m2 and prospective buyers should calculate the build cost to be about R13,000/m2.” Century has recently bowed to pressure from property seekers and released some of their rental stock at The Oval, The Sheds and Waterfall Crescent developments into the property market. Current tenants will get the first option to purchase the property in which they reside.
In Port Elizabeth, the Amdec Group completed The Ridge in August, the first residential village of their Westbrook development, which includes 150 freehold homes, a medical facility, retail space, a school, business park, parklands, and cycling lanes. “Choosing to buy into an estate should be about more than just the bricks and mortar,” says Westbrook Property Developments MD Clifford Oosthuizen. The second Westbrook village, Riverdale, is now in development with off-plan sales starting soon from R1,3m.
Estates such as Paardevlei Lifestyle Estate in Somerset West by Balwin and Buh-Rein in Cape Town’s northern suburbs have gained traction, particularly among off-plan buyers. MSP Developments’ Buh-Rein caters to all market segments and offers various off-plan options enveloped by a sports field, family restaurant, cycling and jogging paths and an open-air gymnasium.
Gauteng offers plenty off-plan estate options, including The Polofields Waterfall. Developed by Balwin, the estate’s apartments feature practical finishes, are fibre-ready, and provide a range of amenities including a lifestyle centre, yoga deck, spa, gym and outdoor cinema.
La Como Lifestyle Estate and Serengeti Estates, both near Kempton Park, and The Hills Game Reserve Estate in Pretoria East, are also worth investigating. Century Property Developments’ The Hills Game Reserve Estate comprises three- and four-bedroom homes featuring staff accommodation, double garage, and garden. “Our building packages have worked extremely well as our homes typically sell within three weeks of being on the market,” says Hofmeyr.
With an established developer, the off-plan process is less stressful than building your own home and is almost always quicker JESSICA HOFMEYR, MARKETING EXECUTIVE, CENTURY PROPERTY DEVELOPMENTS
FIVE TIPS FOR BUYING OFF PLAN
- Plots on low-lying land may flood during storms and plots on steep slopes result in additional excavation, piling and retention costs.
- Ensure surrounding plots are also zoned for residential. You don’t want to live next to the clubhouse.
- Avoid corner plots that back up on noisy main roadways.
- Ensure the development has architectural height restrictions to prevent your view from being blocked by future homes.
- Irregular shapes make it difficult to site a home correctly and achieve maximum use of garden space.
Source: RealNet estate agency group MD Gerhard Kotzé
ON CLOSER INSPECTION
- Ensure that the developer has a track record and is NHBRC-approved.
- Ensure that all deposits are held by the conveyancing attorneys in their trust account and not paid to the developer.
- Read the fine-print, especially the timelines and occupation dates. Most developments require a certain amount of pre-sales before the development finance kicks in.
Source: Rui Magalhaes, First Wave Holdings