Buyers advised to research new developments.
News > news - 22 May 2007
Correctly researching and implementing new property developments is the key to meeting demand in a softer market, particularly in terms of emerging buyers.

So says Andre van Rooyen, recently appointed as Homenet regional manager responsible for Mpumalanga, Limpopo and northern Gauteng, who notes that demand in these areas is still solid, particularly at the lower end of the market and that there is good value growth across the price spectrum.

Van Rooyen comes to the group with a strong background in property development, chiefly in Eastern Pretoria. Before his property career he completed his articles in law and dealt with property foreclosures and conveyancing. "I'm passionate about property investment and I love new challenges," he says.

"There are however certain disturbing issues in the market and in particular I am concerned about the structural quality of some of the new stock coming on to the market.

"In smaller towns, contractors seek to protect their reputations with good workmanship, but in the bigger centres, this may not always be the case."

This issue has a lot to do with rushed demand for new housing stock: "New entrants to the market in my region account for a large percentage of the estimated 400 000 new property owners recorded countrywide during 2006. These new buyers are not necessarily well informed about structural standards and not all developers are conscientious about standards."

Van Rooyen does note that there are numerous developers who are doing their best to produce excellent products within the parameters of affordability. He believes that estate agents have a role to play in educating buyers on quality issues and that the banks are the ultimate arbiters of the value of a property and should be strict in this respect.

He explains: "In a worst case scenario, let's say a development of today has structural problems five or 10 years down the line and the buyer, with a 20-year bond in place, therefore runs the risk of being saddled with a depreciating asset. That's obviously not good news in terms of realising the benefits of wealth creation via property.

Notwithstanding these concerns however, van Rooyen says that the industry is vibrant and exciting.
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