To describe gems this way is to define a Porsche as a piece of “shaped metal”; it is but it isn’t. You would never consider investing in a piece of shaped metal, but it wouldn’t be that difficult to justify investing in a Porsche.

So what about gem stones as an investment? It turns out that investing in precious stones is complicated, but increasingly is looking very attractive as some interesting new players enter the market.

One of the difficulties of investing in gems is that not only are they complex themselves, but the markets in which they trade are informal and poorly developed, with one notable exception: the diamond market.

The diamond industry provides some inkling of what the future may hold for the other members of the big five of precious stones: rubies, emeralds, sapphires, and tanzanite. The diamond market has a regular pricing process, even though the grand-daddy of the industry, De Beers, presumably has a huge influence. Rough diamonds are however traded every day on in the three diamond bourses of Antwerp and price lists exist, most famously the Rapaport monthly wholesalers price list. Rapaport does in fact produce price lists for rubies, emeralds and sapphires, but the list is complicated by the stones themselves, which can vary widely in quality.

Yet the diamond industry does show the way for the other members of the big five. The key is trying to tap into that strange feeling people get when looking at twinkling stones which makes them so appropriate as tokens of human expression. They are light, valuable, portable and imbued with history and often, as jewellery, with emotion. There is perhaps nothing that transformed the diamond industry more than a short, low key, true, advertising slogan with a subtle pun dreamt up by Frances Gerety a young copywriter working for advertising N. W. Ayer & Son in 1947. Once he coined the term “a diamond is forever”, they were.

The key is marketing, and it’s in this area where dramatic changes are taking place for the industry, both good and bad. One of the most interesting and likely success stories has been the company Pallinghurst’s reinvigoration of the Fabergé brand. In 2007, one of the leading lights of the mining firmament, Brian Gilbertson, who is chairman of Pallinghurst, announced something of an industry scoop, contriving the reunification of the Fabergé brand with the Fabergé family who left Russia prior to the Bolshevik revolution which destroyed the famous egg-making factories.

The development of the brand will be important for the precious gem industry, since the Fabergé style involves use of a full range of precious gems and because the company is dedicated to mining “conflict free” gems on an industrial scale. Progress has been good, and the company recently noted that some precious gems were being priced above diamonds on a carat-for-carat basis.

This “conflict free” notion, drawn of course from the diamond industry, is a big problem for the precious gem industry too. For example, the main source of rubies has historically been Myanmar, otherwise known as Burma, and United States sanctions are in force against rubies mined at the famous Mogok deposits, although enforcement is slack since most rubies are cut in Thailand. Alternative deposits are being found, but they too have problems, including in Madagascar where the abrupt decision to stop un-cut exports, mainly to Thailand, became an issue in the recent coup.

Precious gems are also subject to heat treatment to improve their colour and several recent scandals have resulted from the industry not communicating this technique effectively.  The problem has been most acute within the sapphire market since traditional sources in Kashmir, Thailand, and Cambodia were becoming mined out. New deposits were discovered in Sri Lanka, Australia, Madagascar but Sri Lankan production tended to be too pale and the Australian production too dark. According to Diamond.net, gem dealers, primarily in Thailand, perfected heat-treatment processes that could consistently improve the colours of these goods. “Thus, millions of carats of previously unusable sapphire were transformed into attractive gems.”

Yet these are all problems that have been experienced and overcome by the diamond market, which demonstrates how valuable this industry could become with some marketing heft. One of the most innovative sellers in South Africa is a Cape Town company called Royal Stones which specialises in selling larger and specialist “big five” gems.

Associate partner Daimon Findlay says the company’s aim is to find and sell “unique stones” which include perhaps the most misunderstood stones of all, “fancy” diamonds which are diamonds with a colour.

Fancy diamonds are in fact rarer than white diamonds and Findlay concedes some public education is necessary here.  Prices of all precious stones do fluctuate, but in general they have appreciated in value and definitely hold their value better than a whole range of other investments, he says.

I asked Findlay why he thought people got so attached to precious stones, and he said they carry a kind of energy. Perhaps, but there is no denying people think of them that way. Just consider the way diamond quality is described: “brilliance” and “fire”. They embrace a kind of romance which underpins the nature of precious stones in general.

Rubies and sapphires have been coveted gems since the start of civilisation, and fashioned stones have been found dating back to ancient Greece, India, and Asia. Findlay says the most interesting recent phenomenon – and his personal recommendation as an investment choice – is Tanzanite since only a single mine currently exists at the base of Mount Kilimanjaro in Tanzania.

Whether the precious gem market will succeed, and consequently whether they make a good investment is a bit of an open question at the moment. It could go either way, but moves are definitely afoot at the moment to broaden and deepen the market, and the stones themselves are just fabulous.  On that basis alone, they are worth looking into, literally and figuratively.

Royal Stones is at Office 7, Piazza Da Luz, 94 Regent St, Sea Point, Cape Town. 078 250 8646 http://www.royalstones.co.za.

Few of us are as organised as that. We get money to invest at odd times, sometimes at the worst time. Most often it’s not when we really need it, which is when we are young.

“It’s not timing the market, it’s time in the market,” the gurus tell you. In other words, start early. The problem is that starting early is premised on the fact that you have money to invest early on, which few of us do. If we do, the problem is over before we start since investment choices are less critical because you have the money already, so aim for safety and sit still.

Investing also depends on your goals which change, sometimes dramatically. Investing without children is different from investing with your child’s future in mind. Likewise, your risk appetite changes too, often for the same reasons.

Fortunately, there is another way: embrace irrationality. It seems illogical, but increasingly there is evidence that decision making is more irrational than we tend to think. This is perhaps the root reason why markets are more irrational than we would like them to be.

A new book by Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions looks at the new subject of behavioural economics and tries to understand not why people act rationally, but why they don’t.

One of Ariely’s studies is this. He describes a series of experiments where work performance is measured in relation to how much people get paid. In a rational world, the more people are paid, the more work they do. Obviously. But it turns out this is only partly true. Random groups were selected with one being paid nothing, one was paid a little and the third was paid a lot. The group that was paid a little, did a little. The group that was paid a lot, did a lot. But the group that was paid nothing, did the most. What?

The result of the study is oddly intuitive when you think about it: people work hard for a combination of reasons and reward is just one factor. Social factors play a much bigger role than we would care to admit.

The blogger who got me interested in this study, Cory Doctorow, describes the significance of these findings well. “Predictably irrational presents a fatal blow to the idea that we can run a system on the assumption that people will take courses of action based on rational calculus, unclouded by cognitive blind-spots that make it practically impossible to find the best course of action.”

Economics tends to treat the economic system as a Newtonian universe, something akin to mechanical physics where rationality is the assumed basis for all action.

Business already knows this pretty well, Doctorow points out. Companies are very concerned that an overly discounted price will “reset consumer sentiment” about the value of their product. This irrationality is partly why advertisers run “lifestyle” ads that don’t feature the product or enumerate its benefits, he writes. They are designed to appeal to our emotions, not rational calculus.

How do you inculcate that approach into investing? Ariely’s studies don’t really help us with this: they simply prove a negative, and a negative we probably instinctively know already: that people and markets are irrational.

The point is that even an aggressive portfolio should be somewhat spread to try and mitigate the effects of irrationality. And we need to brace ourselves for the fact that even a conservative portfolio can sometimes get irrationally decimated.

Yet, the most important aspect of incorporating irrationality into your portfolio is adaptability. Most investment professionals will tell you to chose good companies and stick with them, because ultimately, chopping and changing is both dangerous and expensive.

This is only partly true. About a quarter of the companies in the Alsi40, by my estimate did not exist fifteen years ago. Without regular assessment, most portfolios will ultimately stagnate.

My investment club recently just for fun held a competition between the members and each of three teams were required to invest R10 000 for three months, with the losers paying for drinks at the annual Christmas dinner.

Hence, our investment horizon was short, our risk appetite extremely high, and our investment goal was to make money quickly. My team decided to short MTN on the off chance that its deal with Indian company Bharti would collapse. It did. The share price, boosted before the deal by the prospect of a buy-out, actually went up after the deal was scrapped, and our short got shorter.

What can you say? Sometimes irrational exuberance is less exuberant and more rational than you would hope it would be.

It is not that other personal finance matters of life insurance and investment are not as important, it is just that one does not seem to be quite so constantly reminded of one’s mortality or one’s net asset value as one is about all aspects of the family’s medical aid.

Often the phone rings from clients trying to get their minds around how much cover they have got for out-of-hospital benefits; GPs, specialist visits, dentistry, spectacles and the like and all these queries are of course important. However, the issues that really interest me, and I would suggest should be interesting to you, are relating to hospitalisation, cancer and serious illness. In this column we’ll deal with hospitalisation.

The three most important exclusions to your hospital cover will always be:

• No cover for injuries sustained as a result of attempted suicide. I had a client who only managed to blow one third of his brains out. As soon as they stablised him he was delivered to Johannesburg General Hospital, where he had a further ghastly five weeks of life.

• No cover if the hospital admittance was necessitated by alcohol or drug abuse. Abuse aside, I had a client whose 15-year-old son’s drink was spiked at a party and Discovery Health said they were entirely within their rights not to pay, and they didn’t.

• No cover for plastic surgery, no matter how convincing the letter of motivation. Obviously, this does not apply following a mastectomy or in cases of medical need.

Then comes the question whether admittance is emergency or elective. This is a vital, and usually a fairly readily deciphered issue, because if the hospitalisation is a result of an emergency then in terms of the PMBs (Prescribed Minimum Benefits) legislation, the medical aid has to ensure that all bills related to the emergency are paid in full.

When it comes to elective, recently a client of mine joined a company with 150 employees (and hence no medical underwriting of prospective employees/members). One month later he had a hip replacement operation costing R105 000 and because he had navigated the minefield correctly, it was all paid correctly.

What are the traps for the unwary?

Well, firstly you must be very careful of applying for any elective procedure in the first year of membership, unless you have joined a big company where previous medical history is disregarded. If you apply for a hospital pre-authorisation number for an expensive planned procedure very soon after joining, the medical aid will look very carefully at the information you provided on your application and, if no mention of the medical problem was made, they will need to be convinced that you did not know about it at the time of application.

Next, comes the very sensitive bit about money. The truth is that the price that different surgeons and anaesthetists charge for the same or similar service varies widely.

You must, before undergoing a planned procedure, question your surgeon very closely. If you are on a plan that only pays out at what used to be called medical aid rates, then you are already in quite a lot of trouble before you start. But even if you are on a so-called premium plan, you also need to be very careful.

So, the advice is – if it’s an emergency, relax. If it’s an elective procedure, do your homework.

Gerald Sadler is the principle of Sadleir & Associates, an authorised financial services provider, FSP No 15120 (011) 465 0816.

Green is the new black. Or is it? There is a growing emphasis on corporates going green, reducing their ecological footprints and becoming more energy efficient but when will the trend reach the suburbs?

By Mary Oxford

We seem to be spending a lot of time on commercial green buildings, we should now move to the residential sector, says property economist François Viruly of Viruly Consulting. “South Africa is following a different path to other countries when it comes to green buildings as the focus has been on office buildings and retail, in large part because the initiative has been supported by the commercial property sector”, says Llewellyn van Wyk, editor-at-large of the eJournal of Green Building.

In other parts of the world, most notably the UK and the EU, the emphasis is placed on the residential sector, perhaps because governments are large players in that market, he explains. Whatever the cause, van Wyk says there is a powerful case to be made for placing a larger emphasis on the residential sector and it is imperative that the residential sector receives focussed attention in terms of greening initiatives. “Take your typical Tuscan complex as an example – this architectural style characteristically features very small eaves roof overhangs and this is not optimal for our country’s generally sunny conditions,” says architect Lorin Gibbison.

West-facing rooms, in particular, often get so hot that you have to use the air conditioner to cool them down, she adds. There’s no doubt that buildings are one of the heaviest consumers of natural resources and account for a significant portion of the greenhouse gas emissions that affect climate change, says Craig Hallowes, spokesperson for the Association of Property Unit Trusts (APUT).

According to the US Green Building Council (USGBC), on a worldwide basis, buildings account for 17% of fresh water withdrawals, 25% of the wood harvest, 33% of the CO2 emissions and 40% of material and energy use (45% in China). But, individual home owners can make a difference because the greener your home, the more money you’ll be saving and you will be doing your bit for the environment in the process.

The recent downturn in the global economy is a stark reminder of the consequences of living beyond our means. But a financial recession pales in comparison to the looming ecological credit crunch says Dr Morne du Plessis, CEO of WWF South Africa. The latest Living Planet Report states that the average individual footprints of South Africans sits at 2.1 global hectares per person slightly below the world average of 2.7gha.

While this seems very positive, we must bear in mind that this does not indicate that you and I are necessarily living sustainable lifestyles. There is still a large gap between rich and poor in our nation and the reality is that this creates a biased perception of individual footprints, explains du Plessis.

Gibbison reckons that while homeowners shouldn’t think that just using energy-efficient light bulbs is enough to make a house environmentally-friendly, it is ultimately the designing and building processes that will make the most difference. But the little things like recycling, using a drip sprinkler system as opposed to spray irrigation, importing less and using energy-efficient appliances do add up, she says.

“It is imperative that South Africa moves smartly in progressing the green residential market – it is the biggest building sub-sector, remains strong and consistent, and is likely to grow significantly due to backlogs”, says van Wyk. He adds that the low income market in particular must be brought in line with green aspirations, largely because over time these units will be significant resource users.

“More property owners and architects should consider converting rooftops in to gardens”, says Steven Rault, head of a.b.e Construction Chemicals’ resellers division. “Roof gardens clean the air through plants removing carbon dioxide and trapping airborne particles on their leaves and provide micro-climates for fauna and flora. They will also protect roofs from rain, hail and wind damage.” He explains that roofs with gardens lose 30% less heat in winter, are cooler in summer and also offer year-round sound insulation. In addition, they can absorb up to 75% of rainfall, thereby reducing run-off and the impact on storm water systems, which can lead to flooding.

Gibbison maintains that while green building in South Africa is in its infancy and the country is behind the rest of the world in terms of technology, there has been increasing interest in this trend over the last couple of years. She says William McDonough is the pioneer of sustainable design and green architecture and refers to his book, Cradle to Cradle: Remaking The Way We Make Things, which is “a manifesto calling for the transformation of human industry through ecologically intelligent design”.

McDonough, based in the US, was recognised in 1999 by Time Magazine as a “Hero for the Planet” for his commitment to building environmentally-sensitive projects and pioneering research in renewable energy sources and healthy building materials. He says on his website that industries, including home building, need to look to new products that benefit the earth rather than strangle it more slowly. “The question isn’t ‘Am I doing something right?’ it’s ‘Am I doing the right thing?’. To make the wrong thing more efficient might be pernicious because it perpetuates the wrong system. We’re looking at eco-effectiveness — doing the right thing and doing it efficiently.”

In April, McDonough was one of four architects asked by the Wall Street Journal to design an energy-efficient, environmentally sustainable house without regard to cost, technology, aesthetics or the way we are used to living. While designs varied from gardens on walls to a pond stocked with fish for dinner or the house mimicking a tree they all agreed that Americans need to learn to live in smaller spaces if they are going to make an impact on the environment. But not all Americans take the green movement as seriously.

In Washington’s State Press magazine, Catherine Traywick reckons that “if the surge in canvas tote bag sales tells us anything, it’s that our drive to preserve the earth is one with our drive to consume – a lot. Somewhere between the premiere of An Inconvenient Truth and the roll-out of “fair trade” coffee brands, this noble idea of “sustainability” seems to have devolved into a super-charged marketing and branding exercise”.

South Africa was quite slow onto the Exchange Traded Fund (ETF) bandwagon with Satrix listing the first in 2000 – its Satrix 40. An ETF is a listed index portfolio of tradable stocks. Traditionally they have tracked the index benchmark at a low cost and the particular portfolio holds the shares in the same weighting as the index. You can now expose yourself to gold, currencies and niche areas of the market like Shari’ah compliant companies, dividend consistent companies and companies with BEE credentials.

ETFs haven’t been without controversy after the Financial Services Board (FSB) stepped in three years ago and imposed a moratorium on any new products in order to construct a trust deed that would regulate them.  At that stage there were nine ETFs concentrated on indexes and currencies. We now have 24 of them with a market capitalisation of R20bn. There have been two casualties, both Investec products that tracked companies with currency exposure. The reason given by Investec was that the funds were small and had limited opportunities for growth.

Moneyweb reporter Julius Cobbett has written extensively on the sector and has made some interesting observations. Two funds that track the same companies based on performance, namely the eRafi and the Satrix Divi, have shown a 32,7 percentage point deviation in performance. Cobbett observed that the eRafi had lost 14 percent of its value since its listing in June last year and that some of the loss had been attributed to performance fees which eRafi charges at a rate of 20 percent of the margin by which it outperforms the JSE. The Satrix product charges no performance fee. Like any investment, read the literature and media reports about the product before committing your cash.

The suitability of ETFs as investments has also been questioned. Brenthurst Wealth’s Magnus Heystek observed that index trackers are great when the market is rising with the tide, but provide no parachute when the tide goes out, as it has over the past year. But as you know, that hypothesis is a fundamental of short-term investing and the message in all ETFs is “take a long term view”.

In terms of market cap, Absa Capital’s New Gold has the highest investment at R9,5bn followed by five Satrix products that make up the top six of sixteen ETFs with more than R100 million invested. New Gold is a breed of ETF that allows you to own a physical piece of bullion and gives you ownership of one hundredth of an ounce of the metal. It tracks the gold price so take your cue from that.

One thing’s for certain, an index or broad, passively managed tracker is unlikely to shoot the lights out and is never sold in that manner. Think low cost, long term and low risk.

Comprehensive info can be found at www.satrix.co.za, www.absacapitaletfs.com and www.moneyweb.co.za

Wine estate ownership will either bleed you dry or provide a highly lucrative income. As Chris Buchanan discovered, it all depends on what level you’re prepared to enter the market.

Buying a wine estate has become quite the fashionable thing to do. The thought of wandering through hectares of cultivated vineyard on the terrior of a mountainside, in the winelands of the Western Cape, is reminiscent of a Peter Mayle novel – restoring the 200 year old villa at the hands of temperamental local builders; feeling the ancient soil of your vineyard sift through your fingers; then uncorking and imbibing in the fruit of your very own vine.

It’s not difficult to make the purchase. A look at the website of any estate agent that operates in the winelands offers a number of alternatives. A trip through the district and a face-to-face meeting with an agent will present a few more options up to a certain level of estate. However, a look-in on a share or outright purchase of a big name estate will only happen by word of mouth within the exclusive social and business set.

Pam Golding Franschoek Winelands International sold Tokyo his estate. It’s what is termed a ‘lifestyle’ purchase. If you manage it efficiently, it will pay for itself but you aren’t going to live off it. R15m to R40m is what you’ll pay for a lifestyle property of 10-15 hectares, on which there could also be guest accommodation and a small winery, or possibly even an olive oil factory. Current agent in the Franschoek office Shelley Schoeman, says that all expertise in terms of viticulture can easily be outsourced, so too can the management and running of the estate.

The established labels like those owned by GT Ferreira (Tokara) and the Rupert family (L’Ormarins, La Motte, Fredericksburg), says Schoeman are never exposed to the open market. They are viewed under private appointment or under the auspices of wine tastings, or sellers will often approach Pam or Andrew Golding at A-list parties and inform them of their intention to sell the estate or a shareholding in an estate. Confidentiality agreements are signed and the sale is done on the basis of a business sale under the same criteria. “These are estates with export labels, olive groves, renowned restaurants and which stretch 100s of hectares”. Schoeman says these estates occasionally appear on their website with a POA price tag but seldom change hands this way.

If you’re in the market and get an opportunity to buy, you’ll pay upward of a chilled R100m which buys you a wine business that contributes to the global wine lake. You will recognise your label on exclusive wine merchants’ shelves, on the wine lists of the top restaurants and on the first class menu of the top airlines. You will buy a machine that runs independent of the ownership, with a label that reflects its heritage rather than the vested financial interests of its owners.

For the lifestyle purchase, the question to ask yourself is what you intend to do with the property. Entry level estates of R15m will allow you to fulfil your dream of running a hospitality establishment surrounded by vines. You might want to make preserves, bake cakes or cure biltong and sell it to your guests or to passers by.

For an estate of up to R40m, with a working winery, you can start getting into viticulture. To do it yourself is a fairly tricky business but highly worthwhile if you get it right. You’ll need time on your hands, a huge operating budget and a very good garargiste manual. They say that reds are best for beginners and don’t forget to tell the authorities that you intend fermenting your own grapes, or they might have you up for illicit alcohol production and confiscate your moonshine, as well as all the apparatus.

Your deep pockets can get you into the outsourcing part of wine production. Anything is attainable at a fee, so as a busy entrepreneur, with little time to spend on your terrior, you can become a cheque book winemaker and pay other people to do the work for you. Schoeman says all services from estate management to actual wine making and seasonal labour for picking etc, are available in the environs. You could sell the odd bottle at the local co-op but most of the wine will be enjoyed at your own table. Your clever accountant might even be able to justify the expense as a tax deductable one, that’s if you’re actually producing and selling wine, at a loss of course.

I’ve used the word terroir a number of times and this forms the essence of yet another option for the lifestyle estate buyer. Terrior is the land itself – a combination of certain factors that contribute to the quality of the vine. Changing one of these factors will result in a fundamental difference in the actual fruit. Climate, soil type and topography are three recognised elements of terrior, so a perfect combination of these three should produce a very sought after cultivar, which established winemakers will take off your hands for a very good price. Schoeman says reds are dropping off in terms of demand and that it’s the sparkling wine varietals that are en vogue at the moment. So, if all falls into place and a renowned label likes your sauvignon blanc, you can take the sabre to the neck of your favourite bottle of bubbly knowing it’s the fruit of your very own vine that cascades to the bottom of the flute and celebrates life in tiny bubbles.

While there have always been collectors, the high demand generated by the first boomers to reach retirement age explains the surge in prices, says Alain Raymond in The vintage car, a sure investment?

“The boomers are better off than their parents, live longer and, having reached the third age, reminisce about their youth and decide to relive it,” he adds.

Cars have always occupied a particular, highly-charged corner of the male psyche. “It’s a guy thing,” says Wayne McCurrie, car enthusiast and owner of seven vintage and classic cars. “This changes quite often but hardly ever downwards.”

A classic car is a term frequently used to describe an older car but the exact meaning is subject to difference in opinion.

The South African Vintage and Veteran Association has categorised vehicles into the following groups:

· Veteran built up to 1904

· Edwardian constructed from 1905 until the end of the First World War in 1918

· Vintage made between 1919 and 1930

· Post Vintage built from 1931 to 1945

· Post ‘45 constructed between 1946 and 1960

· Post 1960 made up until 31 December 1980

Many South African car collectors define cars as vintage if they are more than 20 years old and cars built after 1945 as classics.

The vintage period had the most impact on cars as we know them today. While there was a worldwide change in styling trends in the immediate years after the end of World War II, the vintage period was a time of transition. The car started off in 1919 as still something of a rarity, and ended up, in 1930, well on the way towards ubiquity.

The Austin 7, nicknamed ‘the baby Austin’ was one of the most popular cars ever produced in the UK and its effect on the market was similar to that of the Model T Ford in the US.

For millions of men, the chrome and steel machines are macho symbols, reminders of a more glorious and comprehensible past. In an era when a shudder across the electronically linked securities markets of the world can send prices tumbling, tangible assets have a special allure, writes New York Times columnist James Kaplan.

Prices have risen over the last 18 months, explains Vic Campher, of independent dealer Tom Campher Motors, who reckons that most collectors are choosing this as an investment over equities.

“Buying a vintage or classic car is an investment if you know what you’re doing and you buy the right car – follow international trends, read international magazines but be careful as you may end up buying a bucket of bulsh” he adds.

“It is just like buying shares – you do not know at the time but you just hope that you are right,” says Wayne McCurrie. “These cars are definitely a better ‘investment’ than a new car – at worst, a classic will lose far less value than a new car and my experience is that you generally break even after taking in to account the costs of servicing, maintenance and spare parts,” he adds.

“If you had to take into account your own time, you would probably make a loss but that is what love and passion for a car is all about – you don’t cost your time.”

Global and local economic conditions have dampened demand but it is more the new sports cars, rather than the old classics that are being affected, says McCurrie.

In Italy last recently, a new record for the most expensive motor car ever sold at auction was set when a 1957 Ferrari 250 TR was sold for €9m by RM Auctions and Sotheby’s.

There are five elements that determine a car’s value: rarity, design, condition, horsepower and historical significance. Be careful that the car hasn’t changed from the original – modern enhancements can be added but the originality must not be changed as this will affect the value, warns Campher. The value of the car won’t depreciate unless you overpay in the first place, he adds.

He advises potential buyers to ensure the car is in the right condition before buying it unless they’re mechanical and are able to restore the car themselves. McCurrie maintains that spare parts are readily available and shouldn’t be expensive to maintain as more than likely, the car is not driven often.

Ownership of a vintage car brings with it certain responsibilities, writes TheVintageCar.co.uk team.

“When you are restoring or maintaining a vintage car, you are also preserving a piece of history. The sad fact is that modern cars are not produced with nearly the same amount of personal care or precision, nor do they retain the same stylistic appeal. The mechanics and engineering of vintage cars are also so indicative of the technological advances of the period.

So you can almost think of yourself as a sort of steward, whose job it is to keep these historic artefacts ‘alive’ and running for contemporary audiences as well as generations to come.”

“There are essentially four legs to the collectible-car market,” explains Dean Kruse in A red-hot market for vintage cars.

The hobbyist is the backbone: he actually drives the cars, and he generates the largest amount of money, but he won’t pay top dollar. The dealer is someone who makes a full-time living from all of this. His role is to help preserve the floor under car prices. The investor is only out to beat the rate of return that a bank or the stock market might offer.

But it is the collector that will pay anything to get the right car for his collection.

Mauritius is one of the top five hot spots to watch according to the latest Savills Global Residential Review. It seems like the best combination is sea, sand and sun as only one of the picks was a landlocked country – Switzerland.

Cuba, a Caribbean archipelago, Brazil with its coastline of nearly 8 000kms and Montenegro’s natural Mediterranean beauty,  were the remainder of the emerging locations chosen by director of international residential at Savills, Charles Weston-Baker.

The review explained that prime locations such as the Seychelles and Mauritius remain popular as the low supply of quality residential units coupled with high demand, has driven capital values of these tropical properties. In addition, the strong growth in tourism numbers is fuelling the rental market, raising opportunities for investor buyers.

“The volcanic island of lagoons and palm-fringed beaches in the Indian Ocean has preserved its image as one of Africa’s economic success stories – it is a growing centre for upmarket tourism”, says Weston-Baker.

There are two schemes through which foreigners may buy property in Mauritius. Under the recently-introduced Real Estate Scheme (RES), residential units are sold to non-citizens at no minimum price and no residency is offered to foreigners. This scheme allows for ownership or buy-to-let.

The Integrated Resort Scheme (IRS) was introduced by the Mauritian government five years ago and these developments contain only luxury homes with a stipulated minimum value of $500 000. Many are planned around golf courses, tennis clubs and marinas and an application for a residence permit is made at the same time as purchasing the property.

In the Seychelles, owners automatically qualify for a residence permit application, extending to six family members and there is no limit on foreign exchange allowed for South African investors due to SADC status.

South Africa has a double tax agreement with Mauritius and the Seychelles which prevents the double taxation of income received on rentals or capital gains from the sale of the property.

Savills surveyed over 1 500 overseas holiday-home owners and believes demographics will change but not reduce the market in years to come.

“We will see a return to the traditional use of the holiday home as a lifestyle choice, perhaps more than as a pure investment. That demand will actually rise in the near future,” predicts Rebecca Gill, author of the Savills research.

Not resting on its laurels is UK developer, Mourdant Estates, who, in partnership with Erna Low Property and Lynn Estates, recently launched Emerald Heights, a residential property development, situated on the edge of the Black River Gorges Natural Park in Mauritius.

Mordaunt Estates is uniquely positioned because of its €18 million cash-strong balance sheet supported by its own and private investors’ money. Unlike many other developers, the capital is cost free, since capital has not been raised via the banks.

The company applies a prudent, ‘optimal module’ approach to every segment of construction, whereby each portion of the land under development is planned to accommodate the first phase of properties and completed before developing the next phase.

The development is structured on the RES and luxury apartments are available from €275 000 or villas from €895 000 inclusive of furniture package, taxes, registration duty, notary and agency fees.

Also on the south west side of the island, is Villas Valriche, an approved IRS development comprising an estate of 288 villas and a five-star hotel.

Prices of two-bedroomed villas of the development, situated about an hour’s drive from Port Louis, start at $800 000, while the price of a four-bedroom unit is from $1,2 million.

The first 130 villas are expected to be completed by mid-to-end 2009.

Alec Bates, the former MD of Maccon, the developer of Pecanwood Golf Estate and Fourways Crossing shopping mall, is developing the estate, together with his partner, Ian Todd, who was involved in developing Dainfern.

On the other side of the island, just five minutes from Grand Baie, is the Cape Bay Beach Resort, launched by Pam Golding Properties three months ago.

The development comprises of 48 high-end, furnished apartments – most with sea views and ranging in size from 125m² to 153m².

Units are available from R3 million and buyers will be able to make stage payments as the development commences, explains Jonathan Tagg, MD of PGP Mauritius. Construction started in May and the units will take 18 months to complete.

Tagg says buyers will also be able to generate rental income, with potential through the short-term rental market with tourists seeking an accommodation alternative to hotels.

“Cape Bay’s ability to target and attract the more affordable tourism market through development partner ‘My Villas’ means that its anticipated return of six to eight percent per year – in euros – is achievable,” he adds.

Just off the African east coast is the Eden Island development, a private island just off the coast of Mahè in the Seychelles. It offers a choice of 470 freehold title luxury apartments, duplexes and private villas with individual moorings and a marina capable of handling yachts up to 85m in size.

Prices for the residential properties will range from $375 000 for 80m2 luxury apartments, $895 000 for a 3-bedroom duplex, to $1,315 million for luxury freestanding villas. Every home in the development comes with an electrically powered vehicle.

There is huge demand for properties on Eden Island, with more than 40 percent of all sales being to South Africans.