Auctions over the past nine months have certainly not yielded the results desired by either the bondholders or homeowners in the quiet village of Kosmos. At the same time, municipal valuations valid form 1 July 2009,

supposed to have been according to market value on the day of the valuations, were so blatantly inflated, that the property valuators may as well have lived on another planet.

“When the going gets tough, the tough go shopping,” is the saying, but property shoppers evidently want more than their pound of flesh in these tough times. When the estate agents we spoke to say normal house sales are picking up, it must be from a very low base because auctioneers aren’t reporting the same optimism.

Since December last year, only one of five auctioned properties in Kosmos has reached its target price and that was a home in Simon Bekker Street which was designed as a guest house and which sold on auction for R3,5 million by Alliance Auctioneers. The house was owned by Mr Olaf Bergh. Previous to December house auctions reached at least their target prices.

Unsuccessful Auctions
On Wednesday last week a Caribbean Beach home was auctioned by Root X Auctioneers for R1, 4 million pending further offers today. This is not a liquidation sale and there is no reserve, but the auctioneer from Root X says if Absa bank doesn’t give the go ahead on the present offer, they will set a reserve on the price. She said Absa is trying to help the client who is behind with his bond repayments. The house, in Domenica Village has a lounge, dining room, three bedrooms, two bathrooms, double garage, patio, pool, braai and a garden.

On August 14, a three bedroom, two bathroom “luxury” home in Karen Street only reached R1 million on auction. Subsequent bids went up to R1, 4 million in the week after that, but Mr Piet Human from Leo Auctioneers told MadibengPulse that the bank was not ready to accept the offer in this liquidation sale. “If we do entertain more offers they must be substantially more. The bank wants R2, 3 million,” he said. If this is not reached he says, it’s a lengthy process which aggravates the situation when the banks have to “buy in” to a property with added costs in order to close the file.

The house belonging to Mr Henry Gerber which was bought on auction by its present owners for R6, 1 million on 5 December 2008, could only raise just over half that amount during an auction by Marietjie Keet auctioneers of Pretoria on 10 June this year. The property has been withdrawn from the market says Ms Keet because the owners want at least what they paid for the property. A feature of this auction was the poor attendance, probably due to insufficient advertising by the auctioneer.

A small two bedroom house on a small stand in Simon Bekker Avenue also failed to reach its target in another bank sale by Root X Auctioneers a few months ago. The offer was R1, 1 million but the property still isn’t sold.

In contrast, an auction by Faranani Auctioneers in February 2009 produced a good price for another small house in Simon Bekker Avenue, so auctions per se have worked in the suburb- up till now.

House Auctioned for R150 000 In Pretoria West
In December last year, a large “millionaire’s” property in Paul Kruger Street overlooking the yacht basin only reached half of the R10 million normal asking price on auction by Aucor Auctioneers. The mountainside property which is one and three quarter hectares has four bedrooms, all en suite, air conditioning, large entertainment area, pizzeria and fishpond was empty for a year before auction and it wasn’t a forced sale. The owner has other homes in both Johannesburg and Cape Town. When only R5 million was offered in a revised bid, the owner withdrew the property from the auction and gave it to an agent to sell. The asking price is now R8, 6 million and the owner is prepared to look at offers, according to the agent.

An estate agent with an international agency agreed that auctions weren’t producing the right prices for those concerned. “I went to an auction in Pretoria in the sheriff’s office and there were houses sold for R150 000 in Pretoria West! Another house went for R2, 5 million where the asking price was R6 million, she told MadibengPulse on Wednesday. “The economy is tough out there!”

Sellers will have to think carefully before putting up their properties for auction. Whereas quick and good results were attained in the past, this is definitely not happening now!

Property experts are also saying that homeowners, because of high rates and electricity prices, are buying more affordable homes to balance their budgets.

Comment on municipal valuations
Ever since the municipal property valuation roll was published in the middle of last year, it has been evident to many property owners in Madibeng that the valuations have been in fact far above market values. The Property Rates Act of 2004 protected municipalities (and the reputations of registered valuators) by stipulating that objections by property owners should be on the valuation of individual properties and not on the process as a whole. What an escape route!!

How could anybody explain a rates increase from R200 to R1 200 a month in one instance and from R456 to R1 800 in another? Many property owners were severely embarrassed financially by just this one single increase in their monthly expenses.

When the municipal property valuations process took place (with hiccup after hiccup) from about 2008 to April 2009, the global financial meltdown pushed prices to rock bottom; and so should have been the property valuations. The valuator appointed by Madibeng took an exceptionally careless approach to the term “market value” as prescribed in the Act. Market value means market value and not market value “should the global property and financial markets hold steady from the time in 2004 when the Act was published.” The Act prescribed fair and equitable valuations and the Madibeng valuation process should have respected that. It did not, and the valuations should have reflected the real state of the market in 2008/2009.

If the global meltdown reached its nadir in 2008, how does one explain the conundrum of the auction prices achieved – as described in this article – when the market was already on an upturn? How does one explain that a stand at Leloko, valued at R400 000, only attracts an offer of R100 000 at an auction. How does one explain a serviced stand in Schoemansville Extension 2, valued at R350 000, selling for R175 000? Are well-advertised auctions not the best indicators of market values? The answer is, not in Madibeng!!

The rates process, as everything else managed by Madibeng Council, was a failure, and as ever, it is the ratepayers who have to pay while crooked or inept ANC officials play a game called ‘Learning how to run a municipality’ – Dolf Dreyer.

Ancestor Technology
After digging to a depth of 100m last year, Russian scientists found traces of copper wiring dating back 1000 years, and came to the conclusion that their ancestors already had a telephone network one thousand years ago. So as not to be outdone, in the weeks that followed, American scientists dug 200m, and headlines in the US newspapers read: "US scientists have found traces of 2000 year old optical fibres, and have concluded that their ancestors already had advanced high-tech digital telephones 1000 years earlier than the Russians." One week later, the South African press reported the following: "After digging as deep as 500m, S.A. scientists have found absolutely nothing. The government have concluded that 5000 years ago, their ancestors were already using mobile phones due to cable theft problems."