The CEO of one of South Africa's leading real estate franchise groups, Realty 1 International Property Group, says buyers of units in new residential developments should get clarity on occupation dates before booking their removal companies.
According to Mike Bester, occupation dates are going to be delayed in many instances after Eskom's announcement last week that applications for new power connections to anything larger than a house could take up to six months to approve.
According to Bester, developers, builders and off-plan buyers will be among those hardest hit by the delays. "Like it or not, completion and moving-in dates for residential developments are probably going to have to be extended. This is especially true of Gauteng where the drain on the country's power supply is particularly high, causing regular power cuts and accordingly delays to construction," he said.
He pointed out further that holding costs to developers, already high, would rise, making it imperative that all parties - including Eskom – work together to whittle delays down to the minimum.
While the temptation was there to criticise, and understandably so, Bester said people should not lose site of the fact that Eskom was at least making more information available, which would assist them with their planning.
"Better communication will allow developers and builders to revise their schedules and then provide purchasers with realistic occupation dates."
Predicting that the situation would fuel rental demand for similar properties, Bester said buy-to-let investors might shortly find themselves able to achieve higher-than-expected rentals - provided they remained within the parameters of current market affordability.
To this he added that prospective buyers would be under increasing pressure to make decisions, considering the long wait in front of them for new units. This was likely to up the numbers of people in the buying queues of new developments, both end-users and investors.
He also pointed out that the current power situation was a medium-term obstacle and that Eskom would be spending more than R340b on
upgrading and building new power stations over the next five years as per Finance Minister Trevor Manuel's Budget for 2008/09.
For more information please visit Realty 1 IPG at www.realty-1.co.za.