One of those trends is a notable increase in home renovations, which is transforming many False Bay suburbs and Adrienne von Ess, Area Specialist for Lew Geffen Sotheby’s International Realty in Kalk Bay, St James, Marina da Gama and Muizenberg, attributes the trend to several key factors.
“The first reason is a simple matter of affordability as buyers are increasingly constrained by the stricter lending criteria of financial institutions as well as their own shrinking budgets that can limit their property options to the more accessibly priced entry level homes which are often in need of modernisation.
“Another driving force is the fact that existing home owners, especially in sought-after areas, appreciate the value of their properties and understand that it would be difficult to replace their current lifestyles should they sell up and move elsewhere so they upgrade rather than sell as the need arises.
“Economic downturns also present excellent opportunities for investors who are able to take advantage of the market slump by buying up older homes to quickly and significantly boost the value of their investments through savvy upgrades and renovations.”
Von Ess adds, in older established suburbs like Kalk Bay and St James where original homes still dominate the property landscape, owners tend to live in their houses for many years and only sell when the time comes to downsize or move to a retirement facility.
“Most of the elderly owners who are now selling haven’t upgraded their homes over the years and they are now capitalising on the demand for these properties by upping the asking price and selling to younger buyers with full purses and budgets to renovate.”
In addition to older properties usually being cheaper, many buyers prefer to purchase fixer-uppers as they can put their own stamp on the property and transform it into their dream home. And in sought-after areas, they also anticipate high returns when the time comes to sell.
Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty cautions that in order to successfully renovate and capitalise on investment, it is essential to do one’s homework, especially novices who have never undertaken a renovation project before.
“Although no two projects are the same and it’s often a case of learning from your mistakes, enthusiasm will not safeguard against the potential stumbling blocks that can be avoided if one has a good idea of what the project entails and what to look out for when choosing a property.
“It’s not uncommon for uninformed buyers to encounter numerous new problems during the course of the renovation and rectifying them can prove costly or even break the budget.”
Geffen says that the most common pitfall to guard against is over-capitalisation, which can significantly diminish the eventual return on investment.
“Always take into consideration the current value of your home as well as property in your area as neighbourhoods will generally have a ceiling value, meaning a certain threshold buyers and renters are willing to pay.”
Steve Thomas, franchise manager for Lew Geffen Sotheby’s International Realty in False Bay and Noordhoek advises that it’s also essential to consider current trends and popular home features in your area if you are renovating to add value to your home.
“The features most commonly at the top of prospective buyers’ wish lists countrywide are open plan living areas, security features, lots of natural light and, increasingly, eco-friendly systems which save water and reduce the cost of energy.”
Thomas warns that another oversight that could land home owners in court is not familiarising themselves with the local city council’s building regulations, as many alterations will require local authority approval and failure to do so could prove very costly and time consuming.
“A stop order will be issued on unauthorised building and work cannot commence until plan approval is attained. An inspector will check regularly that building is not continuing and if it is found to be in progress in spite of the stop order, then a summons to appear in court will be issued.
“Another repercussion of making unapproved alterations is that sellers are likely to also run into problems down the line if their homes do not match the building plans that the council has on record when they decide to sell their home.
“This can stall or even sink a sale, because sellers have to disclose this before their house goes on the market. They then have to have new plans drawn up and go through the council approvals process, which can be costly if something non-compliant has already been built.
A final word of caution from Von Ess is that, whilst historical homes are very appealing, they are usually more expensive to renovate as more stringent restrictions apply to these properties because they fall under the Heritage Act.
“Only the interior can be modernised while the exterior has to remain the same and can only be restored. Therefore features like gables can never be removed and if fixtures like shutters, door and windows need to be replaced, a similar wood must be used that can be very expensive as no modern alternatives like aluminium are permitted in terms of Heritage regulations.”
