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Property research articles


Rode’s Property research articles

How to value real estate when the road curves

Let us assume South Africa was a 4×2 bakkie. The two front wheels are already over the (fiscal) cliff; the two rear wheels are still on terra firma. The driver is still behind the steering wheel and is frantically engaging reverse gear – but it is a front-wheel-drive vehicle. This is where the SA economy is.

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The drivers of house prices revisited

The normal short-term factors that drive house-price inflation are economic growth (real growth in disposable household income) and interest rates, as both affect affordability. Economic growth also tends to create new jobs, which boosts the demand for housing, and if the supply side (new developments) cannot keep up, prices accelerate. In a booming economy, this lag time is a real problem as the gestation period of new residential estates is about four years

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The drivers of house prices

The house market is not a global market like commodity markets. Thus, if house prices in Cape Town are cheap relative to Melbourne, potential buyers of houses in Melbourne do not flock to Cape Town, thereby pushing up prices in Cape Town. Put differently, fixed properties – with the emphasis on ‘fixed’ – are not globally tradeable or transportable like crude. Because one cannot live in Cape Town and commute daily to Melbourne, prices in Cape Town will not eventually – through arbitrage – equate those in Melbourne. But one can buy Saudi-Arabian crude (a transportable commodity) and deliver it in South Africa.

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Office buildings: Some thoughts on the decentralization trend in SA

Worldwide, the tertiary or services sector of the economy — manned to a large extent by knowledge workers — is growing much faster than the manufacturing of goods (secondary sector) and the production of raw materials in the primary sector (agriculture and mining). South Africa is no exception, which goes a long way explaining the widening income gap between the poor and well-off. It’s all about knowledge and education.

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Why do you need an engineer

If you submit plans to a municipality for approval to build a new house, undertake a major renovation or construct a new office building or shopping centre, then more than likely you are required to have a Professional Engineer involved in your project. The obligation to use an engineer emanates from the National Building Regulations and Building Standards Act 103 of 1977 and the National Standard SANS 10400: Code of Practice for the application of the National Building Regulations.

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