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Monday Feb 12, 2018

Cape drought drives new buyer, tenant choices

Cape Town's ongoing drought and impending Day Zero is fast creating a "new normal" in the residential property market as tenants, homeowners and prospective buyers look at homes in a different light.

The crisis in the Western Cape has not only forced a mindset shift for Capetonians, but should also sound a clear warning to the rest of the country.

"South Africa is a water-scarce country and no one should believe they have water in abundance," warns Dorah Modise, chief executive of the Green Building Council of South Africa (GBCSA).

"The impacts of climate change are upon us."

The crisis has definitely changed the way people think about their homes, and the issue of water has become a topic of discussion at all levels.

"People are really starting to consider innovative ways of conserving water," says Modise. "I am working on eliminating a swimming pool in my garden and a number of close acquaintances are going through a similar process. The fact that Day Zero now has a date that is within a few months, even if it has been postponed, urges most of us to act, irrespective of location.

"Unfortunately, there are still those who have not yet changed their behaviour, but we hope they will do so soon."

Developers are also taking heed of the crisis and are ensuring they do as much as possible to save water on their properties, says Rowan Alexander of Alexander Swart Properties.

"I am involved with many developers who are adjusting their products to properties with smaller gardens requiring less maintenance. These changes have been positively accepted by the market, which realises that water scarcity is the new norm in Cape Town. Both owner occupiers and investor buyers have responded positively to smaller, lower maintenance gardens."

There also seems to be a big drive among sellers trying to promote their properties' water-saving installations and/or alternative water sources, such as wellpoints and boreholes. Sellers believe their properties should attract a higher price due to their water efficiency and/or alternative water sources, Alexander says.

"Many sellers have paid a premium for water-saving devices and hope to recoup this cost from the sale of their properties."

However, he warned homeowners not to spend recklessly on boreholes and wellpoints as they have become extremely expensive, and their use has new restrictions.

"Since the official declaration that the Western Cape is now a disaster area, legislation about the use of boreholes and wellpoints has drastically tightened," says Alexander.

"Those with these facilities are now limited to using this water for garden maintenance and other outdoor purposes for only one hour on only two days a week. Furthermore, this has to be done before 9am or after 6pm on the two allotted days. In addition, it is now obligatory to have meters on these water supplies and to keep water-use records which must be immediately available to inspectors."

Despite these new rulings, or perhaps because they are not aware of them, Alexander says Cape Town residents seem willing to pay ever higher prices for boreholes and wellpoint installations.

"In Brackenfell certain boreholes have to go down 60m and people are paying up to R1 200 a metre. The outlay can be massive."

Affordability and convenience are still factors to consider when looking for a home, but Schalk van der Merwe, franchisee for the Rawson Properties Helderberg, says buyers are more water-conscious than ever before, and are constantly asking about a property's water-saving potential, municipal rates and nearest wellpoints.

Buyers are also concerned about whether it is permitted to drill a borehole to access water, and what the water pressure is like in the area.

Properties with grey-water garden irrigation systems, boreholes or enough space to fit more than one rain water tank are mostly on buyers' checklists, while luxury facilities such as pools, water features and Jacuzzis are considerably less appealing.

"While the market remains strong for now, it would be naïve to assume things will continue as normal come Day Zero," Van der Merwe says.

"There could be a possibility of a slow down in sales in the middle to upper end of the property market, and semigration - a huge driving factor in this segment over the last few years - is unlikely to continue at the same rate until we resolve our water situation.

"That means we're not going to have as many affluent Joburgers and Durbanites driving demand for luxury properties, and prices could briefly take a slight knock.

"Most Capetonians may find themselves hanging on to their properties and doing their best to implement water-wise solutions, or perhaps in some cases, having to downscale and move into smaller homes."

The water crisis is also affecting commuter patterns.

Paul Stevens, chief executive of Just Property, says some large companies are encouraging their Cape Town-based staff to stay with friends and families in Gauteng and work remotely until the pressure on the water supply lifts.

"We may see an impact on rental properties up-country if this trend develops."

The looming Day Zero has also had long-term effects on the way Cape Town residents think.

Interior designer Will Engelbrecht of WillDesign says: "I think we're now so vigilant about saving water that we will never go back to long showers and the other things we did in the past."

Bonny Fourie
Property
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