Tips and trends on the property market

Sponsored by WH Properties

In this article, WH Properties speaks to Janine Ryan about the trends currently being seen on the property market.

Tips and trends on the property market
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Who is WH Properties and what do you specialise in?

WH Properties is a specialist property brokerage and auctioneering company. We are a member of the South African Institute of Auctioneers and our stakeholders have over 50 years’ combined experience in the auction industry.

Our specialist property team are experts in auctioneering, brokerage, rentals, and appraisals of property providing accurate and in-depth knowledge, advice and service to both buyers and sellers of property.

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WH Properties specialises in agricultural farms, commercial, industrial, retail, and residential property disposals on both auction and private treaty platforms.

Please could you give an overview of the current trends in farm sales.

From our recent experience we have seen trade predominantly in productive farms with ample water rights. Aside from the crops/trees that are grown on farms, the biggest value add is the amount of water available as well as the associated water rights attached to the farm.

Existing water rights and infrastructure enable new buyers to operate the farm almost immediately upon transfer. We have seen recent success in citrus farms, Sharon fruit farms, grape farms, and irrigation farms.

Unfortunately, rising input costs in terms of electricity, water, fuel and fertilisers as well as extremely high interest rates have resulted in a number of farms struggling to keep their heads above water.

Other issues faced in the industry are delays in terms of transport due to the lack of a reliable railway and issues at South Africa’s ports regarding cold storage failures due to loadshedding.

While the farming and agriculture sector is generally one of the strongest performing industries in South Africa, from our recent experience we have seen the most trade in the distressed market where farms have either been liquidated or gone into business rescue.

Like any asset, one of the biggest drivers in sales is quality and price. We find that 90% of the time, quality farms at the right price will sell.

Can you provide us with some tips for anyone wishing to become a property auctioneer?

There are auctioneering courses that people can sign up for where one can learn how to bid call. Auctioneers need to understand the legal aspects of selling properties and be compliant in regard to legislation such as the Property Practitioners Act No. 22 of 2019, the Consumer Protection Act 68 of 2008 and the Financial Intelligence Centre Act 38 of 2001. Furthermore, an auctioneer needs to be registered as a property practitioner.

Finally, one must have a complete understanding of the assets that one is selling. Be completely transparent in how one advertises the property and explain all aspects of the asset – good and bad.

Can you provide us with some bidding tips?

Bidders must make sure to calculate their maximum bid price prior to bidding and to ensure that they can afford the property. An auction creates a lot of excitement which can often push buyers further than they initially anticipated.

Be careful to stop at your maximum price point.

If a bidder fails to perform due to affordability, they will be liable for the auctioneer’s costs and damages to the seller. Bidders must also understand that an auction is an unconditional sale and not subject to any suspensive conditions such as finance. Bidders must ensure they can afford what they are bidding for.

What insurance or preapproval processes should people be aware of when bidding on a property?

When properties are sold on auction, they are not sold subject to finance, meaning that they are deemed to be ‘cash’ deals. Purchasers need to ensure that when bidding on auction, they have calculated their maximum affordability range and have the requisite funds available and or access to finance to enable them to perform and purchase the property.

Buyers are given ample time prior to the auction date to conduct their own due diligence process to make sure of their pricing and that they can afford to bid at the auction.

It is also important for bidders to know that their bid price at the auction excludes commission, VAT or Transfer Duty, Conveyancing Fees, and certificates of compliance.