Essential to check new municipal valuations
Although the City Council has been conscientious about publicising the new valuations on homes, many of the homeowners, says Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency, remain unaware that their homes have been revalued.
If they do know this, says Steward, they quite possibly do not realise that the valuation can and should be checked.
This can be done online at www.capetown.gov.za.en.propertyvaluations or at one of the municipalitys 19 inspection venues. The public have until 30th April to do this and to lodge objections.
On every revaluation, says Steward, the Municipality try to arrive at a genuine market value. They use both individual inspections and CAMA (Computer Assisted Mass Appraisal).
Both systems, says Steward, are generally acknowledged to be reliable, but it is essential to check the valuation, possibly with the help of a professionally qualified estate agent. Anne Porter Knight Frank is one of several agencies who will provide this service free.
Why does Steward see this checking process as so important?
The reason, she says, is that if a property is valued above its true market price, if and when the seller comes to sell he will find that his transfer tax is calculated on the higher valuation, not the actual price achieved.
The purchaser or his agent will then either have to accept this or submit documents verifying the fact that the valuation does not reflect market conditions. Whatever the outcome, this will delay the transfer by up to three months.
Along with, and linked to, the valuation issue, says Steward, is the question of the rising cost of todays services and utilities. Quoting FNBs Residential Property Economist, John Loos, Steward says,
Todays affordability issues will be less about simple house prices and the cost of credit and increasingly about home assessment rates and utility costs passed on from state monopolies.
John Loos, says Steward, has been quoted as saying that the January Consumer Price Index shows that housing and utilities costs are inflating by 7% per annum. Coming on top of Eskoms 24,8% price hike, this inflationary component in the CPI must be a cause of concern, particularly as these costs comprise 22,56% of the total CPI.
The far tougher conditions faced by todays homeowners, Steward pointed out, are already reflected in the current housing market: stand sizes of property sold today are the lowest since the 1950s and the number of houses with swimming pools and/or servants quarters has also dropped significantly since that period. New house sizes are the lowest since the slump in 1995 to 1999.
The cost of utilities and services, adds Steward, will increasingly affect peoples choice on where and what size home to buy.
In the past no one factored these costs into their buying decisions, she says, but that is changing. Such costs have to be taken into account and, as Loos has said, are causing the smaller residential units to be in far greater demand than the larger ones.
Article by: www.anneporter.co.za