Deeds office closures snag for industry
Durban - Business is booming for KwaZulu-Natal estate agents, some who have experienced their busiest month on record, but they are concerned that repeated closures of the deeds office due to Covid-19 infections is severely hampering property transactions.
Wakefields Real Estate chief executive Myles Wakefield said the latest figures released by bond originator ooba had shown a rise in first-time buyers and that banks had an appetite to grant bonds. He said there had also been an uptick in investment buyers.
“Ooba’s snapshot of KwaZulu-Natal’s property landscape reveals the buoyancy of the first-time homeowner market during April to June 2020. In May when current circumstances would suggest the reverse, there was a surge in first-time home buyers - 62.04% of buyers fell into that category,” Wakefield said.
He said the purchase price of first-time buyer properties rose from R698750 to R790000 to R860000 over the period, probably due to the lowest prime interest rate in 47 years.
He said the bond approval rate, which for many banks averaged 77.34%, was “encouraging”.
“The amount granted to first-time homeowners, too, has risen from R790419 in April, to R869335 in May, to R995791 in June,” he said.
However, Wakefield said the “stop-start” inconsistency of the Pietermaritzburg deeds office had had a negative impact on cash flow.
“It has a dramatic knock-on effect throughout the entire property chain, and for some, like a seller who needs to move house, the normally well-oiled system grinds to a near-halt. It’s put a great strain on property consultants, whose commission-dependent income is entirely dependent on timely property registrations,” he said.
However, he said downtime and communication had improved.
“We’d be delighted if they could speed it up further, but we appreciate they will be following imposed protocols. If there are ways, means and chemicals which can enable them to reopen safely and sooner, we’d be fully supportive. Essentially, a registration of a property which took up to three months, can now take five. That has a major impact on the entire industry,” he said.
Tyson Properties Durban co-owner Kim Woods said demand for property was strong in the R1 million to R2m price range.
“Everyone had come back thinking it was going to be quiet and yet my agents are all so busy. In June we had the best month we have had the whole year but it has been terrible with the deeds office being closed like this. Since March 15 we have had eight property registrations and are sitting with a backlog of 46 and all my agents are only on commission,” she said.
RE/MAX Panache La Lucia broker-owner Gavin Grant said the firm had experienced the best month for sales in its history in June.
“It’s probably also due to the fact that in April and May buyers were not able to buy but even July is going to be a better than average month for us,” he said.
However, he said deeds office closures were hindering transactions.
“As we start to get a trickle going through they close again. It is the one thing I didn’t think would be a problem, we all just assumed let’s go back to work but all businesses are sensitive to infection,” he said.
Pietermaritzburg conveyancer Daan Steenkamp said the deeds office had closed three times for three-day periods since reopening under lockdown. He said the office was scheduled to reopen yesterday after the latest closure.
Steenkamp questioned why the procedure took as long as three days and suggested the office consider alternative commercially available methods of sanitisation that did not require chemicals to “settle” for 48 hours
KZN Department of Rural Development and Land Reform spokesperson Sipho Dlamini said the deeds office was simply following Covid-19 protocols.
“We are following government protocols that are issued by the department of health. We are following the guidelines and if they say we need to wait for 48 hours after decontamination then that is what we have to comply with,” he said.