Well, it’s happened!!

Just sitting here listening to the de-brief of what took place has caused me to rise and write this blog immediately.

I am still to write a synopsis of the property market in 2017. Those who have been reading me during the year know that I will be positive. Not in the sense that that is the stance I take as a rule but rather, that the end of the year is better than expected after our president turned the Treasury on its head for the second time in as many years. In doing so, he ignored any common sense that may have prevailed locally and internationally. His view was his view, no consultation, no permission just Guptanomics applied brutally. In doing so it feels as though he cooked his goose and has paid the price. In his own words in his scathing last speech, he is a soldier and he will march on. Man, has he left a legacy of unity at the cost of principles, and best of all, free education for all [well, 90%], which we cannot afford! Guess who is going to pay for it? – the wealthy and the Poor.

But this Elective conference which I must say has delivered the candidate I prayed for, has delivered a mixed-up unity like none other. There are people in senior Secretarial positions whose own province could not stay out of court for branch and PEC electoral distortions. Other people who have played the game of politics for politics itself – the amassing of votes in a democratic society but who probably have no one in mind but themselves. Self-centred individuals who triumph on the backs of well-intended people.

KZN could implode. What that means I do not know but I’m sure unless the leaders of the ANC pull together, that province could well continue with their low-intensity civil war. My sense is that whilst the Eastern Cape is bereft of competency and leadership, KZN is bereft of values as well. Without values, killing your tender competitor is sanctioned and if that means revenge killing, so be it. Heaven help the leaders there as they take unity to the ground and make it happen in the hearts of the people. I cannot help but think Jacob Zuma has set alight the province where he scored his greatest victory, namely, to quell the warring IFP/ANC factions in the 90″s.

The one thing I have seen all my life is that people follow leaders. Watching Colin Maine, the ANCYL leader, it was amazing to listen to him change his tune and welcome the unity that the appointment of Cyril Ramaphosa brings. What rubbish! He hated and slated the man in favour of his beloveds – jz and ndz. But how fast the change occurred as he saw his salary and his prestige swiftly flowing out the door. Will he survive the next election? I don’t know but I must say, I have seen the same shift of position happen often in Corporates. Human systems adapt to leadership. Leadership can lift the games of their followers. Or, leadership can sink their followers to the lowest common denominator. Jacob Zuma has done just that and in case you thought he’s going away, remember, he is still president of our beautiful tortured country.

So a couple of points for the property market:

  1. The Rand strengthened prior to the conference on the buzz that Cyril Ramaphosa would win. Now it has crashed through barriers last seen 2 years ago, especially to the British Pound.
  2. This strengthening movement is probably over-stated and we will need to see if it continues and then sustains. It will literally take the first few words of the new President of the ANC to shift it one way or the other. Even as President of the leading political party in the country, his stance will determine the short-term value of the Rand. If he favours the country overtly and the ANC secondly ie in private discussions, he will win us kudos.
  3. We have a downgrade from Moodys in the wings. I think Cyril Ramaphosa has just won us a reprieve.
  4. The downside, for those who wanted to win the 2019 elections, is probably that the ANC will consolidate and even win back metros they have lost. Joburg, prepare yourself for change. It will take a huge amount of scepticism and a massive amount of compromise with the zuma faction, to foresee the ANC losing in Gauteng again.
  5. Speculation aside, the win by Cyril Ramaphosa is good for property:

– The 1% growth that we lost out on this year will materialize as 2% next year.

– The drain of the SOE’s on the economy will begin [very slowly, however] to recuperate.

– It will be very interesting to see if anyone goes to jail, but I think there will be some sacrificed lambs who will do time to satisfy the populace.

– When the economy rises, jobs will be prioritized and COSATU will be manifested in all their glory in the new-birth of the tripartite alliance. That happy band of vote-winners will be in unison again. Tonight’s manufactured unity will be realized and expounded to the Press.

In summary, property will benefit and rates will decline as long as the Rand holds onto its new-found value. Slowly but surely, property will rise in price. Don’t write off that Gauteng, on the back of positive politics in a winning streak and with the fresh feel of abundant water, don’t be surprised that prices rise well above the average of the last three years. “Prepare to meet thy boom”, was how the late de Kock, the Reserve Bank Governor, expressed it.

What a Christmas present for South Africans of every walk of life! Jobs will be at the centre of a conference that Cyril Ramaphosa pulls together with Business and Economists and Others. Prepare for a Grande Plan that mobilizes for jobs – probably the most precious thing besides water in our economy at the moment.

More to come but in the meantime,

Yours in Property


In our previous blog we explored the notion of Distraction and its associates, “Procrastination” and “Important”. In this blog we’ll discuss an old term, Opportunity Cost.

On BBC, there is a programme, The Chase. It is a quiz show with a panel of normal people who pit themselves against a brilliant expert in general knowledge. At a point in time when the panel has come up against the expert, one person on the panel is chosen to pit themselves against him or her but with a twist. Let’s say the panel has scored UKP8000. The chance is then given for the panel to win, say UKP60000 or, if the expert progressively answers correctly, the panel loses, say, UKP2000. So, if they lose, they get UKP6000 but, if they win, they walk away with UKP68000. Of course, the panel can choose if they risk UKP 2000 or they try to win the additional UKP60000. This is an example of Opportunity Cost – if you play it safe and then beat the expert, your opportunity cost is UKP60000. Just to put that in our terms, that’s a whopping, R1000000! But, if you lose, UKP2000 is taken off your current winnings.

Opportunity costs exist in almost every decision to a greater or a lesser degree.

Opportunity Cost occurs as a result of having alternatives in a set of decisions. If, by doing one thing you prevent yourself from doing another, you may have just caused yourself a cost of opportunity. We do it all the time, negotiating our way through life’s complex paths. Risk-taking always implies opportunity cost. As in The Chase, you walk into one thing and leave another. Of course, it may be possible to do both or to undertake a hybrid of the two but, it is always the chance of upside or the downside that drives our decisions.

Here are some examples:

– You choose to marry Jane and not Sarah. Time tells if you made the right decision, remembering that your opportunity cost, might be measured in opinion only.

–  You chose to remain in a Corporate and retire on a pension rather than set out on your own and create wealth. Here, if you succeed in business, you score but if you fail, your opportunity cost would be the pension you could have had.

– You decide to have children. The cost is measured in Rands of education and care. The alternative may have been loneliness and the absence of familial care in old age.

And so it goes. The thing you left behind as you made the call to proceed in a particular direction, is the opportunity cost of the decision. Sometimes it is great and sometimes what you chose could prove much better than the action from which you walked away. Time tells in real life. In business decisions, the decision-taking is a lot more mathematical and models of forecasts, discounted cash flows and the likes are used to aid the decision. But even the richest of companies makes decisions to leave one thing and do another, always probably based on a reduction of expense or an increase in profit.

Where does this leave us when it comes to Distraction? Well, distraction either causes the wrong or a delayed decision or, distraction may cause a particular route to be followed when it was obvious to the focussed observer that the other should have been chosen. In such a case, the opportunity cost of delay or an incorrect decision could be significant. One area where I am feeling huge opportunity cost at the moment is in our SA politics. The current leadership is not putting us back 8 years being the two terms of the president, but rather a decade and more. Pravin Gordhan speaks about 10 years to recover from a full junk status and if that occurs before Christmas, that means 8 years of Zuma and another 10 years of recovery. In all of that, we all get poorer and the Poor become completely destitute. If we embellish on that with some of the social unrest scenarios, the ruin is unimaginable. I have recently read Jacques Paauw’s book and in the course of it, I stepped back and began to think of the reading that I have been forced to do to stay abreast of the scenarios in our beautiful, tortured country and the negativity contained in these books. I thought about the effort that it has taken to investigate and expose the “bad” and the amount of Distraction that it has caused a nation. Imagine if the only books selling at the moment were studies and success stories of green energy, water purification initiatives, farming methods, advanced financial planning and wealth creation, inexpensive building technologies, self-driving cars for public transport, etc, etc. – just imagine!

You see, the Distraction that corruption has brought has induced an immeasurable Opportunity Cost for our nation and her Peoples. Thus the travesty for me of the current leadership crisis is not even what we have lost, but what cost we have foregone with the amazing opportunity that democracy and the former leadership engendered for us. We live in hope that something occurs in the next year or two that completely changes the trajectory we’re currently plotting. In this regard, Zimbabwe has just got interesting and we wish a better outcome for her Peoples.

But back to us and what we can individually control. The cost of Distraction is immeasurable even in our own lives and circumstances. We need to be mercenary when considering what we spend our energy on. Time is of the essence when we choose, by design or default, to focus on the Unimportant in our lives. By pursuing a senseless decision or strategy, we waste the actual time expended but we also may bring about setbacks that last much longer. In your business, the relationship with your children, your marriage, Distraction and its associate, Opportunity Cost, lurk to waste your efforts and impede your success. Take control. As we’ve made the point before if you don’t, somebody else will. You don’t need to get paranoid about every decision but just take one or two “big rocks” and begin to practice Focus as opposed to Distraction, and estimate the Opportunity Cost of your alternate decisions. Great strategies are as much made up of what you do not do, as they are of what you do.

Homeloan Junction is practiced in these issues and no doubt has examples of where Opportunity Cost went against them over time. We learn from our mistakes and sometimes learn best from them, unfortunately. Point is a discussion with those who have been before you can always help when you are making decisions with uncertain outcomes. Strength to your arm as you manage the choppy waters with which we are faced. Hopefully, as we’ve discussed before, you will continue to enjoy the current level of activity of the market as it certainly feels like Property has held its own in difficult times.


Yours in Property.


A blog for the honest readers amongst us 🙂

Who doesn’t know this word? It is the cousin of Procrastination and the bedfellow of Important. In fact, anything in life, personal or business, which takes more time to perfect than a morning cup of instant coffee, can go from Important to Distraction in seconds. If you still don’t believe me, sit to down to pray and “focus your thoughts” as you begin to worry about the “Sunday roast” – no wonder that ministers have a hard time of it!

Important often takes it out of you. You need to place it front of mind and concentrate on it over a period of time. Whatever’s important probably has a combination of thinking and executing, over time with a sense of discipline and consistency. Stephen Covey, in First Things First, uses the matrix we’ve discussed before, around the issues of Urgent vs Important. For most of us these days, Urgent [Urgent/Urgent in the matrix] things are emails and WhatsApp; the frenetic activity first thing in the morning to clear the stuff before work so that I can, well….work. But that is work, we say! Juxtapose that against building the character of a child or teaching a teenager to become a man – the Important/Important block [at the top of the matrix], and we are talking the real stuff of life rather than the froth on top of our next beer. Are we distracted as much doing emails – No? But a teenager –  different story!?

Enter Procrastination. I find most of us talk about time-wasting rather than the wasters of time. Procrastination is normally the big English word we all know. Putting things off, from mowing the lawn to fixing the lamp to writing the email that is not pleasant, to sorting out conflict etc, etc, is well-covered ground if you’re human and involved in relationships. Oh, how we sidestep the issues and just “wait for something to happen.” What are you doing about it? Nah, I’m just waiting for something to happen. Well, sometimes your patience and stillness pays off, but normally, two weeks later, that shrill voice says, “When are you going to fix the lamp?” And, so it often should, to awaken us from our wasting of time! Procrastination is well-known in business and a major reason why businesses become complacent. There is nothing like a cashflow crisis to shake everybody from their business-as-usual slumber and to get them going and understanding that things need to be done. I have used the analogy before of a 4X4 entering mud. You go in with a measure of confidence and eventually you find yourself sinking deeper and deeper until you’re just wheel-spinning. Such is the complacency of low to zero growth as we’re currently experiencing – you just don’t feel it for a while and then when you wake up and stop procrastinating, you realise there is serious work to be done to keep the business moving forward. Hopefully, it is not too late. A great leadership trait has always been to shake-up the business in the good times by reminding people that salaries are not guaranteed and getting them is a combination of hard work, application and customer service; the rules never change in business. Frankly, things never change in families either and we often need to feel hurt in order to change and even, progress.

So, we’re adept at procrastination but what are those time-wasters, those distractions, that steal the capability of any determined person to accomplish what is Important? Rather than give you a list, let me cover one thing that is common to us All. That one thing is invisible but real to each of us – our thoughts. It is hard to believe that thoughts can hold such sway over us – completely intangible but very powerful. They can make you smile and make you sweat. They make a man a boy and a boy, a man. They are the bedrock of bravery and the sinking sand of weakness. They are unique to you and I – each thought in its own time and place – and yet, so much of our human experience is driven by common ground no matter who you are and what your standing in life. Thoughts take place in the pre-frontal cortex [PFC] of the brain, just behind your forehead bone, where the stage of life plays out your day. Sitting here looking out the glass doors at a windless Spring day, yes, even now, my thoughts are racing. What to write next, what to prepare for tomorrow’s boards, remembering the farmers’ protests across the country [hopefully totally peaceful and effective], wondering what time my wife will return from her Soup Kitchen and her tea with a friend – thoughts pulsate in and through my PFC. Some take root, some dance like butterflies and move on; none have stopped me to waste time..yet. What about you as you read this and nod your head? What is wasting your time as it seats itself beyond the PCF. Some are physical [so go to the bathroom], some are mental [so check your bank account balance to see your monthly commission] while others are emotional [apologise for that harsh word with your child] and some may even be spiritual [a sense of fear of the unknown in this beautiful, tortured country of ours]. Whatever thought takes root in your mind just beyond the PCF can be or become the time-waster, a Distraction. So what is just beyond the PCF? Without the big names, it is the seat of your emotions and experiences. You see [and experience], when a thought takes root in the PCF, our stage of mental activity, if we allow it to rest there we will quickly make the connection with our emotions and/or experiences. Simple example: you see a red rose and before you even bend down, you smell the scent of the rose in your imagination. In fact, you may even smell again to check if there is no scent “like last time”. Take something less trivial: you have a fight with your spouse in the morning and the whole day, you break away from what you’re needing to do, to replay the fight and the response, in your mind. Emotions running wild or previous experiences reinforcing a current thought, play havoc with your ability to focus. And focus is what’s needed even for quick, yet important, things. No wonder the Book of Joy by Desmond Tutu and The Dalai Lama, reminds us that joy in any sense of the word, begins with Perspective. If you want a distraction, have a negative perspective on an activity. I often think Attitude [the positive one] is half the battle won. You see, a long time before you make another cup of coffee, get up to check the weather, sit back and think about something off the point, you’re thinking. No wonder the Good book admonishes us to, “take our thoughts captive.” Nothing like thoughts wastes our time – thoughts are the genesis of Distraction.

Once again, for some of you, this is old hat. But for some, a jerk of conscience may just be the medicine you need to re-focus and get on with the Important things you need to deal with. Homeloan Junction is made up of people just like you. We need to take Distraction to heart just like the people who read our blogs. If this reminder has helped you do that, goodie. If not or if not required, well done and be radically successful in what you want and need to do.

Yours in Property.