The renovation revelation

Whilst property prices continue to climb in many of South Africa’s residential areas, there has been an increasing trend towards refurbishment and renovation of existing homes as well. So says Kevin Cimring of Bridgeway, which is a bridging finance company focused on property finance in the residential sector.

Cimring says that many of Bridgeway’s clients are those people who have applied for second bonds in order to renovate their properties. It seems that people who would have ordinarily sold their homes and moved to newer or bigger homes have realised that there may be more value in staying put and improving their existing homes. This is driven in part by the huge surge in asking prices in many areas, says Cimring.

Cimring says that many clients who have been granted a second bond approach Bridgeway in order to obtain the bond proceeds at a much earlier stage, instead of waiting until registration of the second bond. Once people have made the decision to renovate their homes and have been granted the bond, says Cimring, then they are eager to get the project underway almost immediately. Bridgeway advances the proceeds of the second bond to the client so that they have access to the funds almost immediately. Some homeowners are also concerned about the rising costs of building, and would prefer to proceed with their renovations sooner rather than later.

Although Cimring believes that there appears to be a flattening out of property prices on the horizon, the surge in demand still continues unabated in certain key areas. Apart from the coastal hot-spots, Cimring says that recent developments in areas such as Johannesburg’s Melrose North have sold-out at very “full” prices, and very quickly too.

One of Bridgeway’s other services involves the early payment to sellers of their proceeds of the sale. Bridgeway also finances the payment of rates and taxes for sellers, as well as the payment of transfer duties and costs for purchasers. “It would appear to us that the property market is, in general, still buoyant and although a flattening of prices may be on the horizon we do not foresee a “bursting of the bubble” for some time to come”, says Cimring. Interesting developments in the next few weeks include a potential interest-rate cut as well as the much talked-about relaxation of exchange control regulations. Cimring believes these will have a positive effect on our property market.

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Article by: Bridgeway