Today Charles Thompson, the Director of the Devmco group went live with his first video in a series of live Facebook videos which will cover a range of topics relating to not only the property industry but also investment and the economy. The broad topic focused on what Devmco Group are doing to overcome the immediate challenges ahead with a series of questions from the audience.
Where should I invest my money?
· Property remains a good investment, but location is very important. Property that is well located will see good capital growth and a good rental return as well. Property priced at R2.5 million, with a 10% deposit can earn capital gains of 8% per annum and a 5-7% overall on the value of the entire asset. I encourage people to start and to continue to invest- property is my pension plan.
· Location always comes first when deciding where to invest. The Sibaya Coastal Precinct is a good bet as it offers sea frontage, accessible coastal forest belt with residential developments which have privately-installed services infrastructure. We know that seaside homes hold their value, but one cannot overlook things like security, service infrastructure, roads and facilities; these are now non-negotiable. Within the Sibaya Coastal Precinct I would tell anyone to make sure they invest on the sea side of the M4.
· At the moment banks are offering some loan and credit amnesty to people and there looks to be another interest rate drop on the cards, so conditions are good for lending or getting a home loan.
Should I be investing in these uncertain times?
· If the price is right, and the product is good then there is no reason not to invest in property now but be wise and do the due diligence so that you don’t over-capitalise. The current COVID-19 crisis has put a delay on development, but I don’t believe a month delay will have a huge effect on buyers and we have felt the impact of this but at Gold Coast Estate we have the means to be able to catch-up on lost time.
· Once your property deposit is paid you can have as much as 2 years of capital appreciation on your purchase without having to put down the full bond value. We expect to see a spike in property acquisition as well. There is no safer investment option than property right now; stocks are too volatile, and the global economy is not helping the stock markets either.
Will KZN property see growth over the next few years?
· KZN property, especially between Umhlanga and Ballito, will continue to see growth; we are about a decade behind areas like Cape Town but I believe that what KZN offers between Umhlanga and outer Ballito is unmatchable especially in the Sibaya Coastal Precinct: sea frontage, a usable forest reserve, access to an international airport and Umhlanga (roughly 5 kilometres in either direction) as well as the upcoming Aerotropolis.
· Unfortunately, freestanding house price growth has stagnated, but we are seeing that well-priced residential estates are continuing to see price growth and there is enough demand to keep this going and an even greater demand for facets like good security and amenities.
What is your advice to first-time buyers?
My advice to potential first-time buyers is to get into property as soon as possible, there is no sense in waiting. But it must be affordable so do your homework; and also remember renting a property long-term just isn’t feasible and doesn’t make good financial sense.
How is the rental market doing?
The rental market has seen continued growth and lots of investors are making good returns on their properties which they let through platforms like Airbnb. One of our owners at Pebble Beach has done phenomenally well and has already earned 8% on the value of his property.
What are your thoughts on retirement?
There is such a massive demand for retirement products here in KZN; but the market is very niche, and many buyers are likely buying their last home so it’s an emotional purchase for them. We are mindful of this and have to be very price sensitive and offer as much as we can within that price bracket with offerings suited to that lifestyle. The market wants small gardens, the ability to take walks or walk dogs in safety amongst other things.
Why does it pay off to invest into an area like the Sibaya Coastal Precinct now?
· When investing it makes send to not only look at the per-square-metre-rate but also the total square-meterage; we work on an 80/20 split in most of our developments, that is 80% internal and 20% external. The rate within the Sibaya Coastal Precinct is in the range of R28 000 – R33 000 per square metre straight from the developer and resales within these developments have already achieved up to R40 000 per square metre. This rate will continue to grow within Sibaya so it’s best to get in as early as possible. The market in Sibaya is booming and as the precinct develops, demand will grow.
· Sibaya is a new node offering that Sandton-feel without the hustle and bustle; it has sea frontage, coastal forest and high accessibility both in and out with the M4 and N2 nearby. I know that early investors will see good capital growth.
How is the Sibaya Coastal forest managed?
Many people are concerned about safety and rightly so. The forest is an invaluable asset to the precinct itself, to all the homeowners and to us and we are pooling our efforts to actively improve this natural asset. The forest is protected and looked after by the Sibaya Management Association. Right now, the forest is being put into a natural reserve and estate levies are being used to cleaning, removing alien plants, restoring natural biomes, security and making the environment a safe one. The forest is an asset of paramount importance- it not only adds massive value to your property investment in the precinct, but it adds great value in terms of your lifestyle too.
Where to next for the Devmco Group?
· We have always endeavoured to create communities that are engaging with communal facilities and it has worked well so far; we are really wanting to reignite that community culture of the past and to provide convenience and a lifestyle but to a very high level.
· We have a large-scale development which will be revealed towards the end of the year and will be a blend of lower-middle and middle-upper opportunities, and due to the overwhelming demand, we have seen, it will also include a freestanding retirement offering.
· The apartment market is saturated, so we are now looking at developing freestanding estate homes which enjoy the same kind of amenities and lifestyle that other high-end estates.
· Retail development will start in 2021- we are already engaging with our key anchor tenants and permissions are already underway; there is a big demand for easy-to-access retail that’s close to home.