In spite of the strengthening of the Rand (possibly because of it), demand by overseas buyers for good property in the Garden Route has hit an all time high during this summer. I say possibly because of the strengthening Rand, as no one wants to invest in an asset only to find that the value is eroding because of the depreciation of the currency. What did put a small dampener on sales was the 'Asset/ Income Requirement', which the Department of Home Affairs attempted to impose (unsuccessfully for the time being) on retirees coming to live in South Africa.

The regulation which was unconstitutionally promulgated, imposed on foreign retirees a requirement that they have R15 million in assets providing an income of R25 000 per month, whilst a permanent's requirement was to be increased from R1.5 million in assets to a net worth of R20 million.

In addition a fee of R100 000 was promulgated simply to make the application. This was up from R13 282. Only the esteemed Department understands the logic. However, after the challenge in the Constitutional Court, the regulations are currently on hold.

We understand that the intention is to make the acquisition of property by foreigners more difficult as they are causing price rises in the market, making it too expensive for locals to acquire property in South Africa. The argument does not hold water as the overseas buyers are affecting mainly the top end of the market and not the middle of the road properties. The vast majority of South Africans who do not own property are at the lower end of the income bracket. More importantly we have seen unprecedented increases in building costs during the past few years (increases which were totally unrelated to overseas demand for housing). Today, builders who quote under R4000 per square meter for an ordinary house are hard to find.

Another cause of high cost housing, particularly in the Knysna area, is the shortage of good quality land at reasonable prices. Furthermore, the municipalities will charge a R15 000 plus per stand for augmentation levies (to be paid into a sinking fund towards the upgrading of bulk municipal services - a developer must also pay to install services on site i.e. roads, water, sewerage and electricity). Depending on the site layout, the costs can range between R35 000 and R100 000 per stand. Holding costs on the acquisition of the initial property and the costs of the bulk services all add to the development costs. Holding costs can become extreme if an application for rezoning and subdivision has to take place. This may take up to two years depending on objections and local authority requirements. These costs are often overlooked when it comes to property prices. They cause price rises that obviously cannot be levelled at overseas buyers.

It is clear from our experience that there is a limited supply and a high demand for our property. This is coupled with the above factors dictating price hikes.

There is public perception that by giving their property to a company that purports to have international connections or indeed conducts road shows, they are enhancing their chances of selling. Invariably this involves signing up for an unjustifiably long sole mandate. The practicalities of this exercise are that the likelihood of any individual in Europe jumping onto a plane because he has seen your property at an exhibition is next to nil.

At the end of the day, experience is what sells property. If you place your property in the hands of agencies that have a long-standing performance record in your area, you will be doing justice to yourself and your property.