Okay, just before you think I have the answer to my question, here are two extracts from two leading banks as of June 2018:

Bank#1: “Therefore, the signs are increasingly pointing to an even slower average house price growth year in 2018, than in 2017, and possibly the 4th consecutive year of house price growth slow down, despite recent mild growth acceleration.”

Bank#2: “We still see 2018 house prices stronger than in 2017 due to the turnaround in business and consumer sentiment as well as gradually easing credit conditions.”

So the answer to my question is simple, “I don’t know!” OR, “Eish!”

Of course, one should be grateful for the freedom of the Press and the competition between the banks. Either, or both, would allow for such disparate views between the banks and no doubt, economic models and sentiments have been incorporated in these views.

To the latter point, B#1 has a more jaundiced view of the future than B#2. B#2 continued to say, “We are, however, slightly more cautious in the short-term but remain convinced about longer-term improvements. We maintain our view that building and purchasing activity, relatively subdued in the last year, will benefit from the upswing in business and consumer sentiment. Indeed, data already indicates signs of improvement, with year-to-date to April volumes of building plans passed rising 18.8% above their 2017 levels in the same period.”

Readers of this blog know my views on Perspective. I’m not humanist in these views, but I do contend that a positive perspective has a far better chance of positive results than a negative one. So, if there were a vote, this time I’d vote for Bank#2. In fact, really little difference exists between the banks’ reports on the House Price Index other than their statistical methodology creating slightly differing percentages. Here are the relevant extracts:

Bank#1: “On a year-on-year basis, the B#1 House Price Index’s growth rate continued to accelerate mildly in June 2018, reaching 4.1%, up from a revised 3.9% in May, and the 4th consecutive month of growth acceleration since the 2.9% low point reached in February 2018.

In real terms, however, when adjusting for CPI (Consumer Price Index) inflation, house prices remain in decline. As at May 2018 (June CPI not yet available), real house prices declined year-on-year by -0.5%, with CPI inflation at 4.4% in that month and house price growth at 3.9%.”

Bank#1 has this to say by way of explanation, “We believe this recent mild acceleration in house price growth to be the lagged impact of that brief sentiment improvement in the country early in 2018 on the back of the major political leadership changes in the country, notably a change in President. That sentiment improvement led to a noticeable 1st quarter increase in residential market activity and demand and this has arguably fed through into price growth of late.”

Bank#2: “B#2’s HPI has retreated further, to 4.4% y/y in June, from 4.9% in May (revised from 4.8% y/y), dragging year-to-date average annual growth to 4.9% – virtually flat from the annual average growth of 4.7% in 2017.” For the sake of comparison, B#2’s CPI in their report is 4.2% and this results in a 0.2% real growth in house prices for year-on-year, June 2018.

Like any good economist, B#2 preface any possible over-positivity with this comment, “Much will depend on how much sentiment translates into investment and, ultimately, higher employment levels.”

Two major banks assessing the same data and coming up with very similar results but with different outlooks.

Let’s just analyse B#1’s comment on the lag effect of good news, termed, “that brief sentiment improvement”. Essentially, CR’s election to President caused such a stir that housing activity lifted and estate agents were busier and sellers achieved their prices and banks lent buyers the money. I fully agree with B#1’s sense, though I imagine, the first quarter is generally better as we all return from leave and transfer to new job opportunities etc. This fact makes you think though, and I’ll close on a possible scenario allied to this. In the meantime, turning to B#2, their more positive perspective is that CR will, in fact, be able to lift economic output and thus sustain “Investment and, ultimately, higher employment levels.”

If I look at his successes in Saudi Arabia and $20bn being invested in Energy and Trade, and many of the other initiatives that his government has achieved, I sense that he could make a difference. And of a truth, probably nothing could be worse than the captured state we were in before his election. The issue, given the incredibly high stakes economically, is “how much better” rather than “whether better”? These points bring me to a close. To put you out of your misery, the banks are FNB and Standard, respectively. On the lighter side and to Standard’s kudos, they mention, “We expect a gradual easing of credit standards this year and next, alongside moderately improving consumer affordability matrices.” “Yes pleez!” I hear you All Cry.

Soberly though, the question posed is: Where are we? The writer’s view is simply that we are in better shape than we would have been even though the house price growth is marginal in nominal or real terms. The fact that it is anywhere near positive in real terms, is a tribute to Inflation management by the SARB’s MPC. The recent holding of the interest rate in the face of inflationary pressures from the Rand and Oil, and backed by Standard Bank’s view that “the SARB is likely to keep interest rates unchanged over the next 12 months”, is great news. But the question remains as to what would recover that sentiment that “led to a noticeable 1st quarter increase in residential market activity and demand” and cause it to be maintained?

I have no research department behind me, but I put to you the following: To sustain an encouraging level of housing activity and price rises, South Africa needs 2%-plus growth for 2 years after an initial pick-up period of 6 months. In essence, it is my view that we need Ramanomics and not just Ramaphoria to sustain a higher level of confidence and property economics. I think we have a shot at it and Lesetja Kganyago, the SARB Governor, projects 2% economic growth in 2020 off 1.7 – 1.9% growth in 2019. Now I trust, that’s got you thinking!

Bottomline, we remain hopeful.

Yours in Property.


I called a friend of mine in Sydney for his birthday and found myself in the inevitable conversation about property. “What’s happening to property in Sydney?” was the question. I almost heard, “Eish!” but seeing he speaks Australian now, it was more along the lines of, “Shew! Bad…Mate” We spoke about Cape Town being a proxy for Sydney – high performance prices over a long period of time but now tailing off quite rapidly.

Then my wife showed me an article about Bo-Kaap, those beautiful painted houses in which the oldest Muslim community in the country live. In reading it, I decided to title this blog, Something Different. You see, in this country of ours there are always pro’s and con’s, swings and roundabouts, and contradictions. With protests again in Hermanus, it feels like we’re always on the edge and never quite sure of what is going to happen.

But you know that! You’re in the property business

Coming from the Cape[town]etc website, the following extract:
“Long standing local residents of the Bo-Kaap are clamouring to hold onto their homes as property rates increase and investment markets turn on the heat in order to obtain their houses.
Bo-Kapp is nestled in the corner of the City Bowl and offers an authentic Cape Malay cultural experience right in the city centre – it is safe to say that Cape Town would not be the same without this ironically vibrant neighbourhood.

Well-known for its rich history and culture, Bo-Kaap is a place where many residents inherited their homes.  With recent developments along the area, Bo-Kaap is becoming prime real-estate and international investors are bidding to obtain property or land in the district. Property has obtained a higher value than ever before, causing property rates to increase rapidly. Locals are unable to keep up with the increasing property rates as their wages account for the bare minimum. Combined with the increasing gentrification and opposing protests, residents fear losing their homes along with their heritage as Bo-Kaap is one of the oldest Muslim communities in the country.

International investors are focused on the property value and numbers. Many buyers are interested in purchasing the house, flipping it and selling it to the highest bidder. A lifelong resident, Shamil Jassiem shares his grievances with GroundUp, ““Investors are not interested in you and your history and your culture. All they want to do is buy the houses, renovate them and sell them for more a year later,” In a world where we are increasingly alert about strangers, the Bo-Kaap offers a sense of community that echoes the principle of ‘ubuntu’ – where residents can rely on one another for a helping hand. “I will never leave this place because everybody knows everybody and it’s a safe place to stay” says resident Faiza Larney. At the age of 68-years and retired, residents such as Larney are having to pay property rates that amount to R 6000.00. Larney’s only source of income is her pension which amounts to R4300 both government and private pension are included in this. Property rates do not include water, electricity, sanitation and refuse collection – meaning that residents must fork out more money that they do not have. Many residents are currently in arrears with their rent causing the option of selling tempting.

Properties have risen in value by 11 – 12% annually over two decades with property being purchased in 1999 at R200 000, now valued at R1.3 million. The overall increase in value can be attributed to the method of marketing, geographical location and beneficial investment output. Chairperson of Bo-Kaap Civic Ratepayers association Osman Shaboodien shared, “Property sales are spurned by marketing. Bo-Kaap for instance is sold as a quaint, historical place with cobblestone streets and old Dutch houses.” The people of Bo-Kaap are now faced with a daunting situation – to sell their house, heritage, history and culture for financial comfort or turn away buyers and work more than one job to cover the basic costs of staying in their homes.”

We have been talking about the Cape Town market slowing down but here pops up an article that investors are still hunting for and finding value. We had a cooking lesson in one of these houses for a friend’s 60th birthday, and I can tell you the Bo-Kaap is beautiful, friendly and quaint. Not a reason in the world that if these little homes achieve R1.3m in the market that you would not want to renovate a few and rent them to young professionals who work in the City Bowl. Big returns at that price, so I can understand the problem and even, the dilemma, residents may have.

Now, some interesting news from Sydney. Remember in Australia, homes are not sold by agents but rather auctioned. As a guideline, 90% are auctioned there as opposed to 90%+ here that are sold by agents. That explained, this weekly report I received from my friend, talks about Clearances – this is the term used for “sales on auction” over a weekend and imply that if there were a 100 houses listed and 92 are sold on auction, then the Clearance would be 92%. This example is exactly, according to my friend, the Clearance figure 18 months ago. In other words, 92 out of 100 auctions achieved a house sale; imagine that demand!

But times have changed and last night’s [10 July 2018] Clearance Rate was 53.53% on 673 Total Scheduled Auctions in New South Wales, the province in which Sydney resides. In other words, Australian auctioneers [read: estate agents] have experienced a 92-53 = 39% decrease in sales and I bet, the house prices have also declined concomitantly. That, in 18 months. I’m not sure that you have experienced anything like that anywhere in South Africa; I certainly hope not! Mind you, I was also comparing house prices with my friend and in that regard, I have another friend who has just sold in Hermanus within walking distance to the beach for R12m. He has purchased a similar sized house within similar access of the beach and he paid R35m ie A$3.5m. That’s three times the price in Rands. And, just by the way, I see the interest rate advertised in the report, is 3.69% variable. That’s three times less than our rates.

Moving on to house price increases, the report is also quite insightful:

Demand for all property across Australia has increased 5.2% year-on-year with houses increasing at 7.8% but apartments decreasing at -1.2%. The report continues, “The housing market slowdown in Melbourne and Sydney is dominating headlines, but the reality is the market is highly divergent. On one hand, Sydney prices have declined by 7.4% year-on-year, while on the other extreme, Hobart continues to surge, with prices rising by 16.1%.

Sydney is experiencing the biggest drawbacks. Melbourne is still holding. Pricing is up year-on-year and although activity among offshore buyers is cooling off, foreign investors are still actively looking for properties in the city. Softening market conditions are now starting to take hold and, surprisingly, given the widespread concern about apartment over-supply, in relative terms, it is housing demand that has weakened more. While Melbourne and Sydney slow, demand is creeping up in Perth. Although prices are still down year-on-year, the increase in demand is now the third highest in Australia, after Hobart and Canberra. Brisbane is experiencing similar increases, also suggesting that the tough times are over in the city, which is consistent with recent jobs growth numbers.”

And, final thought about the factors causing much of this reduction:

“Generally, across Australia, the premium market is holding up better than more affordable locations, however it is too simplistic to say that it’s the only market doing well. The strongest suburb over the past 12 months was Tamarama in Sydney’s east, which saw a median price increase of more than $1 million. [That’s R10m! In one year!!] Looking ahead, the housing market in Australia is under a lot of pressure, which will cap price growth everywhere. The reasons for this are varied.

Fewer offshore investors: Last year, new taxes were implemented in many capital cities and Foreign Investment Review Board applications dropped dramatically. Foreign buyers are still interested in Australian property (we continue to see growing numbers of Asian property seekers looking in all capital cities, except Sydney and Adelaide), however they are not transacting. While the new taxes are partly to blame, a change in sentiment has also occurred. There is also less development taking place (foreign buyers are restricted to buying new properties), as well as fewer Chinese developers. Property is now on the restricted list in China and more often than not, Chinese developers tend to sell back to their home market.

Fewer local investors: Investor lending has dropped by 15% over the past 12 months and sentiment of local investors has changed. A lot of this has to do with problems related to getting finance (far more restrictive and more expensive), but many of the incentives that investors got on off-the-plan developments, for example, are no longer available. The beginning of price declines is only worsening the situation.

Financial Services Royal Commission: This is currently underway and although it won’t be completed until late this year, banks are already starting to restrict lending on the back of what they expect to happen. The biggest impact right now is greater scrutiny of potential borrowers’ spending behaviour. [ed. I’ve heard that somewhere before ] Previously, banks mostly accepted what people said they spent at face value, however they now require more proof. Interest-only loans have also been restricted and many investors had relied on these. It is likely even greater restrictions will be put in place over the next 12 months.

Mortgage rates: Australian rates aren’t budging but US rates are increasing. Australian banks raise about 20% of funds that they lend to Australians from wholesale markets, so this is impacting mortgage rates already. Add in an interest rate rise and we will see less money being borrowed, as well as lower levels of interest in buying a house.

Change of government: A federal election will happen in the next 12 months and changes to negative gearing have been flagged by the ALP. This would have a big impact on the market, with an expected decrease in prices of about 10% in Sydney and Melbourne, according to Riskwise and Wargent Consulting. If markets are already weak and dropping, this could have a dramatic impact on investment levels and, subsequently, prices.

The likely outcome over the next six months is continued moderation of pricing in Melbourne and Sydney, while our other markets will hold up a lot better. Predictions that median prices will decline by about 10% seems a bit light in Sydney, given that prices have already dropped by more than 7%. Melbourne is likely to see declines this year, however, at this stage, it is unlikely to be as extreme as in Sydney, particularly given that on a year-on-year basis, we are still seeing a very slight increase.

On the positive side, the Australian economy is very slowly heading back to growth mode and as the development pipeline has slowed dramatically, particularly for apartments, this means less property will be available to buy. These will provide buffers to negative changes in the market, something that was not occurring the last time we saw big declines post the Global Financial Crisis.”

Just, by the way, the median [read: most often achieved] price in Sydney is A$925000 or, wait for it, R9.25m. No wonder, even at 3% interest, the market is adjusting.

Something Different, indeed! And when you read the reasons for the changes, if you closed your eyes, there wouldn’t be too far a difference to our reasons. Government change struck me and are we expecting that quite soon. However, banks tightening lending and the Financial Services Royal Commission [What a mouthful; sounds so British! Just read: National Credit Regulator] automatically adjusting spending patterns of applicants to avoid over-lending, is pap and wors in our mortgage space. The Chinese influence is very interesting and simply resulted from mega-rich Chinese buying practically whole developments and then loading unit prices by A$100000 only to sell to the locals for enormous gain. The Aussie government stressed out [that’s an election issue in the modern economies] and got the Chinese government to stop approving offshore monies going into such ventures.

In little ol’ SA we have our problems. But so far, we have held our own. The list of headwinds would be similar and the interest rate may rise even this year. I stand by my prediction that SARB will hold the rates fearful of curtailing growth and therefor, employment. Time will tell.

Hope you enjoyed Something Different. Good to see that other countries are struggling and that we are not unique. At Homeloan Junction we plough ahead. No time to put your head in the sand, but rather to Stand Tall with positive self-expectation. We have a proud history and we intend to keep our yesterdays on the same trajectory.

Yours in Property.


This blog is a muse. According to the dictionary, a muse is to “be absorbed in thought” or to “say to oneself in a thoughtful manner”. So that’s what this is, just some thoughts about two apparently unrelated matters. Read on, if you wish…

Nelson Mandela was born one hundred years ago on 18 July. I remember the date easily as his birthday is the day before my daughter’s so it’s easy to recall. It’s wonderful that we are again celebrating an amazing man and especially in this, his would-have-been, 100th-year.

But earlier this week, I received an sms that read: “It is our 100 year birthday month and Sanlam is inviting you to apply for a loan of up to R200000 to suit your financial needs…..”. So, it is Sanlam’s 100th-year celebration.

NOW isn’t that interesting! An Afrikaans investment company and an international icon “born” in the same year. How history chicanes in July 1918! [Just to explain how I am using the word “chicane” which I know from my days of playing Scalextric [and, no I’m not also approaching 100 years :-)], it is “a sharp double bend created to form an obstacle on a motor racing track”.] In my case, it was one track you could put anywhere but which formed a cross in the tracks. If you hit it at speed, your car would careen off the track. If you hit it at the same time as your opponent, you crashed and were very fortunate if you stayed on. But if you navigated it well, one thing was for sure, your car had changed lane for one round of the race and so the race was different, especially as you approached the bends. I never thought Scalextric would cause me to muse……..

One hundred years ago, the Afrikaner nation was a struggling people. Without historical advantage, this young nation began to self-determine and we know that in 1948, at the time of WW2, they won the election and the National Party came into power. However, by then Sanlam was a small but well-run insurance company competing with the likes of Old Mutual and various offshore companies, like Norwich, Prudential and Southern Life. Sanlam was no doubt in the genre of General Mining which was also an Afrikaner mining investment company. There they competed with Anglo American and JCI, the latter of Barney Barnato fame. I’m sure by 1948 and definitely beyond, other great industries were beginning to build as parastatals, the most notable of which were Iscor and Eskom. Later on, Sasol and the weapons industry expanded rapidly and we were building helicopters and G5 cannon before I went to the army in 1973.

During these decades, we built the harbours, roads, and railways into world-class, government-owned infrastructures which were certainly the envy of Africa. Sanlam has always stuck to her core, insurance and investment, and has grown into a global company with deep roots in the JSE – no attempt to launch on the LSE here; pure South African. Three stories I can tell about Sanlam; one, that they recruited me from Caltex in about 1978. The strategy was to “get more English-speaking clients” and so they had these “English” teams. It seems that “English speakers” rather did their insurance in companies where they were understood. It was from Sanlam, that I transferred to Trust Bank, for the same reason, when I decided to exit selling insurance, and thus began my career in banking and my eventual realization that I loved People, Finance and Sales – these becoming what I call “career principles”.

The other story is that I was situated In Sanlam Centre in Jeppe Street, Johannesburg. Huge, high and markedly black and white vertically striped, it was the tower of its time; it stood in stark contrast to the “vaal” concrete facades of the Carlton Centre. A final story as I muse along. At the time that Sanlam and Old Mutual demutualized in terms of amended Banking legislation, I went with two senior colleagues from Nedbank head office to the Sanlam head office in Belville, Cape Town. Soft air-conditioning, plush carpets, and mammoth offices grace this 7th floor. We sat prepared to present our case for share securitization of new shareholders’ shares and were waiting for another Sanlam GM when a person in a three-piece suit and tie entered the room. Like the good employee [read: boy ] I always was, I jumped up and greeted the entrant with a hearty “Goeie more, my naam is Jack Trevena” and was greeted in return with the question, “Wil Meneer koffie of tee he?” Well, needless to say, my colleagues mocked me onto the plane and off and for years afterward. I’m sure there are other wonderful anecdotes and stories amongst our readers but here is a company, born from the economic crisis of the Afrikaner nation, celebrating 100 years of business success. Their sms triggered an emotion in me that business is business and the only thing a good business knows is to keep selling, in this case, personal loans, so as to secure another 10 years and beyond. In doing so, it has employed and pensioned off tens of thousands of people over the years.

We turn to Nelson Mandela but I’m going to use a far more remarkable message than my own musings to convey my thoughts about this great man. Suffice to say I admire him immensely. Having read three of his books, I remain in awe that a man, and in his own words “just a man”, could exit 27 years of prison and chose to reconcile. He was not bought off nor did he not have the stomach for further fighting, he simply believed that forgiveness, like love, could cover a multitude of sins. In doing so, he ceased a civil war, brought democracy into being, and paved the way for a just and equitable society. If I listen to the endorsement of Kathrada, Bezos, Ramaphosa and other well-intentioned, reputable people of the methods and negotiations he deployed, I’m more saddened by those who malign Nelson Mandela as a sell-out. He didn’t sell out to anybody; he knew that destroying the country in a civil war would be the greatest opportunity cost of our history and in keeping this country intact, he negotiated the best opportunity for political freedom to become economic freedom in our lifetimes. That we have largely squandered the opportunity in corruption, nepotism, patronage, and greed is the enigma of the times in which we live. It’s not about “only 24 years in a young democracy so give us a chance”, rather it’s about the absence of stewardship in favour of the Poor. Just looking at Carte Blanche on Sunday and seeing that just 5 out of 646 hospitals passed their audit tells me that we have failed to steward even what was there and functional in the first place. With that angry muse over, let’s turn to Thabo Makgoba , the Archbishop of the Anglican Church in South Africa, and his address during the evening prayer service commemorating second anniversary of the death of Nelson Mandela on December 06, 2015 in Cape Town. 

As we celebrate the centenary of Nelson Mandela’s birth, how should we remember him?

The good that Madiba stood for is unparalleled in our lifetime. He was extraordinary, an icon of peace and reconciliation who appealed to a sense of common humanity among all people. But he was a human being like all of us, vulnerable and fallible. He smiled, he joked, he was funny, he was jealous, he frowned, and he got angry. He feared death and obscurity. He doubted, he coerced, he outmaneuvered.

Developing wisdom, strength and grace in the face of adversity and great challenge, while Madiba was no saint in the traditional Christian sense, he was a symbol of holiness. By that I mean one who is set apart but is able to hold oneself and others accountable to a greater Being, and to draw people together based on a vision for the common good. His vision was for a free, democratic, non-racial world in which we are all afforded equal opportunities and are freed from poverty, marginalization, and dis-empowerment. Is this vision realisable and, if so, how? My answer is yes, of course it is. But we need to consider carefully how to deploy his legacy.

In considering Madiba’s legacy, there is, on the one hand, a danger that we will romanticise him and his achievements in a way that leaves us ill-equipped to meet the challenges of times very different to those in which he lived. His policies and solutions are not necessarily solutions and policies that are appropriate a quarter of a century later. On the other hand, there is also a danger that we will judge him and his legacy with no regard to the context in which he lived and struggled. I am sad when I see young people attacking Madiba’s legacy and claiming he “sold us out” by not building us the Promised Land in his lifetime.

We ought not to take the events of history and look at them through the lenses of today’s eyes. When we do, we are bound to be insensitive to the realities that our forebears faced and to pass naïve and shallow judgments on their achievements. We need to remember that 30 years ago, as Madiba entered discussions ahead of his release, then began negotiations with apartheid leaders, our country was at war. Historians describe it as a low-intensity civil war but for us and those communities who saw thousands of men, women, and children killed it was most definitely a high-intensity war. And if you want to end a war you don’t do it through more war – especially when your forces, in this case, MK and APLA, have no prospect of military victory any time soon.

Madiba and his fellow leaders had to make compromises to end the war, and yes, we are feeling the impact of those compromises today. But they had to be made for the sake of peace and for the luxury of being alive to look back and criticise them. As it was, our fathers and mothers, our grandfathers and grandmothers, made huge sacrifices for our liberation for most, if not all, their lives.

If you question what they achieved, then look at Syria today, where more than a quarter of a million people have been killed, more than six million have been forced to flee the country and another six million have been driven from their homes and displaced within the country. Or look at South Sudan, where freedom fighters fell out with one another two years after achieving their independence and went to war. Five years later, the international community is still trying to cajole them to make peace. Four million people have been uprooted from their homes, and two million of them are refugees who have fled to neighbouring countries.

If the leaders of Madiba’s generation had not made the compromises they did, would we have time, or even be alive, to criticise them? Rather than look backward at what we cannot change, let us rather look forward and focus on what we can change. Our forebears brought us into the Promised Land: It is up to us now to build it. We need to focus on the challenges of today, raise them to a higher level and re-negotiate how we move our country forward to deal with the horrendous inequality we still suffer.

We need to end inequality of opportunity. We need to put justice at the heart of what we seek to achieve and be sacrificial in redistributing that which God has given to all South Africans to benefit the poorest of the poor – who seem to be ignored in the current debates. Above all, we need to become courageous like Madiba, wise like Madiba, and take the debates and decisions over the structuring of the economy and the distribution of land to a higher level and ensure apt policy to achieve these.”

I truly could not say it better than a man who probably knew the icon personally.

There we have it. Two great institutions, secure in what they stand for and what they believe. Both 100-years old, one a legal entity with the capacity to live on as long as it secures its financial success and the other, an amazing man who restored our propensity to be a great, united nation. His is a legend of immense proportions and his stated intention, so aptly described by Archbishop Makgoba, was to create the platform with FW de Klerk, for nation-building. Way beyond the foto at the 1995 Rugby World Cup, lay the opportunity for us to secure our Peoples’ complete freedom; the platform he created was the springboard to an amazing nation.

In a sense, these two institutions represent the Scalextric chicane. To have approached the obstacle gung-ho could have derailed both of them – political chaos and economic chaos, ala Syria, would have resulted. Trying to survive the crash would have been too risky and so Nelson Mandela and his team negotiated while Sanlam [read: the entire business and social community] looked on anxiously. We all know what happened as the vehicles slowed down to let the other cross – deliberate, intentional and thinking about the ultimate finishing line – determined to win but with a win-win attitude. Thank Goodness they all succeeded in the end and that even Pretoria’s bombing and Chris Hani’s assassination could not derail them. But one thing is for sure, in getting through the chicane, the entities are driving on the other side of the track than before.

The road has changed irreversibly and navigating the different bends is the new challenge. Some, seemingly interminably unhappy with the outcome, seem set to disparage and disrupt. Others rally around the new ANC leadership in the hope of clawing back the lost opportunity. The world watches on; another failed African state or the inimitable ability to rise from the ashes? Oh, as my muse draws to a close, how I long to see this beautiful country rise to her full potential; how her People deserve to be rewarded after years of short-sighted, self-imposed hardship!

Our property market is locked up in the outcome. Crash-and-burn, or survive or thrive – each outcome in every corner of SA Inc. lies before us. In the words of Nelson Rolihlahla Mandela, What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead.”

Yours in Property.


Just an opening comment about Ramaphoria. How cute we are as a nation to adopt words like Rainbow Nation, Zumanomics, and, our latest euphemism, Ramaphoria. When we give it a name, we somehow settle back into our armchairs and watch Chicago Fire. Without a name, we stress. Ramaphoria was never going to last. So, we should not make it “the next big thing” to complain about. I have asked a friend to correct me whenever I moan about the country and my reason is simply this, if you think that Ramaphosa is moving too slowly and we should be arresting more people, getting more money back and recapitalizing the SOE’s faster, never forget you could have had Mrs Zuma and a horrible catastrophe as Eskom breached the fiscal cliff, the Rand collapsed [I mean COLLAPSED] and every scrap of international investment left our shores.

Listening to this morning’s Talk Show, Cas Coovadia of the Bank Association of South Africa, was speaking about the willingness of the Banks to support a restructure of the SOE’s. “They have been robbed and now we’re expected to risk our savings to bail them out”, one Caller lamented – but just imagine if the President didn’t have the ears and brains of the bankers and other relevant parties to turn this mess around. Yes the ANC allowed Zuma to run wild but at least, some self-correction is creeping back under very difficult circumstances for those willing to be tasked with the unwind of State Capture. It was all too frightening to consider but thank Goodness the Good Guys won and we have a chance at Hope and Reconciliation again. It could have been worse, MUCH WORSE! Don’t lose Hope and when you have it, Encourage Others – you could see it as your National Duty. You can never build anything focused inwards; it’s outwards or bust. Look Up, Look Out and make yourself, drag yourself if need be, to be part of the solution.

I often refer to John Loos and I like the manner in which FNB brings the estate agents into the picture. I know you read the Property Barometers so forgive me for extracting from them, but they do allow me to make some points which I hope you find valid. In this blog, I refer to three latest Barometers……

Early signs of the positive national sentiment shift impacting on national house price trends

This was the headline of May’s Property Barometer and it continued to say:

“May 2018 saw the FNB House Price Index growing by a faster 4.6%, year-on-year, up from the previous month’s 3.8% in April, and from a February 2018 low of 2.8%. This 3rd consecutive month of house price growth acceleration is an early sign that significantly improved sentiment in South Africa early in 2018 is beginning to impact positively on the housing market and house price growth.”

So there we have it, SA Inc set off like a steam train and house prices were rising significantly. But was it realistic and sustainable? Realistic? Yes, but simply because we all took a huge breath of fresh commercial and confidence air from the ANC December conference and we were willing to pay the price asked by Sellers. Sustainable? No. You can’t turnaround the wounds of State Capture in three months. To think you can is puerile.

But we continue: “Strengthening was witnessed in our own FNB Estate Agent Survey, with agents reporting a significant jump in residential market activity in the February 2018 quarterly survey. Further support for the perception of a strengthened Housing Market in the 1st quarter of 2018 was provided by a shortening in the estimated average time of homes on the market prior to sale, from 17 weeks and 2 days in the final quarter of 2017 to 14 weeks and 1 day, according to the Estate Agent Survey.” 

In other words, our “window to house prices” was telling us we were motivated to buy and pay the price. In conclusion, FNB says, “2018 is expected to be stronger on the back of a further small interest rate reduction as well as leading indicators having pointed towards further strengthening in economic growth as we’ve moved into 2018. We thus expect average house price growth to be in the 5-6% range for 2018 as a whole, which would imply some mildly positive real house price growth given the FNB CPI inflation forecast of 4.9% for the year.”

I agree with John, we could see a positive house price growth this year. The reason is that despite some recent news around Inflation and interest rates and the usual politicking, we will have a better year than last year. Surely, it can only be better!?

Now we return to our “window”. I have a high regard for the estate agents. In our economy and property market, they are the front line of property sales. They have and need the skin of a rhino and the hearts of a saint in order to traverse the minefield of Buyer and Seller negotiations. On their behalf, FNB proceeds to say that: “they perceive the sentiment “spike” from the early-2018 political leadership changes to have passed through, and it is back to “business as usual” in a weak economy. On a national average basis, the 2nd quarter 2018 FNB Estate Agent Survey showed a noticeable lengthening in the average time of homes on the market prior to sales, pointing to a renewed housing market weakening in terms of housing demand relative to supply. This is reflective of “Ramaphoria” tapering off.”

I accept that they are right. Humans like us, they could have felt more enthusiastic going into 2018, but that aside, the numbers are telling and don’t lie. The “average time of homes on the market lengthen noticeably, from 14 weeks and 1 day in the prior quarter to 16 weeks and 4 days, reflecting improved housing demand relative to supply in the 2nd quarter’ and, “from a previous quarter’s 91%, the percentage of sellers being required to drop their asking price to make the sale also increased to 96% in the 2nd quarter of 2018” and by an average drop in the Sellers’ asking price from “-8.2% in the prior quarter to -9.2%” in Q2:2018.

You can read the rest of these Barometers, but to sum up, the estate agents are telling us that there is not a stock problem generally and that negotiations are hotting up and Offers being accepted at a slightly lower price. It would be foolish not to accept that this status quo does not mean a slowdown in the housing market. 

But really, despite the news mentioned above around pre-election [I really hope] politics, Inflation and the possible rise in interest rates to protect the inflation target bands and the Rand [read: your petrol price], we are doing well under the circumstances. I wish I could wave a wand and “talk it up”; I cannot. But going back to my opening comments, we have no idea how bad things were and how terrible they could have been for every one of us; especially the Poor and the Unemployed.

Telling people that things are not as bad as they could have been always feels like a cheap shot from me. But, from my heart and the commercial heart of Homeloan Junction, we have the opportunity to rebuild and to restore, opportunities for jobs, housing and things that matter to common people like us. Do I sink back in my comforter unaffected and at peace? No, not really. But, on the other hand, I can see that once again SA has dodged the bullet – may I say, miraculously?  – and we have leadership that is fighting our way back against the odds. Whilst my hope does not ultimately rest there, it is a damn side better than anything I could have foreseen.

Like success, hope breeds hope. Have it and share it; it’ll be good for You.

Yours in Property.


Maybe it’s the side of the bed I woke up on this morning. Maybe it’s the way I feel or my bio-rhythms. Maybe it’s where I am in life, not just a place, but an attitude or approach to it. Or, maybe it’s just the truth as simply as I see it.

My Son tells me I “talk psychology”. He may be right but this blog is from the heart and speaks to a little aspect that may be interesting, called LIFE.

I read an article on White Privilege the other day and it contained a telling statement about a fish. The writer, the Deputy Head of Jeppe Boys High, said that talking to white privilege is like talking to a fish about water. It’s just there, it’s everywhere and when I live in it I cannot be blamed for not seeing it; it’s natural, pleasant, life-giving, assumed, and ever-present. To see it, I need to get out of the water and take some gasps in a waterless environment. No different to taking away my oxygen; it’s then that I appreciate it completely and can put some thought into its meaning to me.

LIFE is like that. You live it naturally and are aided in it by personality, habits, attitudes, and behaviours that that shape the way you think and the way you respond. Imagine having to think about breathing; we have a respiratory system that is managed by the command post of the “preBotzinger Complex”, according to UCLA neurobiologists.  Together with the brain stem, this Complex commands the act of breathing. Let’s be honest, we haven’t given our breathing a second’s thought for a decade. In fact, unless we’re into deep breathing or experienced a lack of breath, we never think about it. Is LIFE also treated like that?

Such a thought lead me to find the address of Bill Gates’ address to a high school and I paste it here for your re-reading:

Bill Gates gave a speech at a high school about 11 things he did not and they will not learn in school.

[He talks about how feel-good, politically correct teachings created a generation of kids with no concept of reality and how this concept sets them up for failure in the real world.

Rule 1: Life is not fair – get used to it!

Rule 2: The world won’t care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.

Rule 3: You will NOT make $60,000 a year right out of high school. You won’t be a vice president with a car phone until you earn both.

Rule 4: If you think your teacher is tough, wait till you get a boss.

Rule 5: Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flipping: they called it opportunity.

Rule 6: If you mess up, it’s not your parents’ fault; so don’t whine about your mistakes, learn from them.

Rule 7: Before you were born, your parents weren’t as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were. So before you save the rain forest from the parasites of your parent’s generation, try delousing the closet in your own room.

Rule 8: Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they’ll give you as MANY TIMES as you want to get the right answer. This doesn’t bear the slightest resemblance to ANYTHING in real life.

Rule 9: Life is not divided into semesters. You don’t get summers off and very few employers are interested in helping you “FIND YOURSELF”. Do that on your own time.

Rule 10: Television and video games are NOT real life. In real life people actually have to leave the coffee shop and go to jobs.

Rule 11: Be nice to nerds. Chances are you’ll end up working for one.

You thought I started off a little harsh, but what about this piece of truth? Here is the richest man in the world telling kids from Grade 8-12 about LIFE. And he’s not PC [read: politically correct] or shirking his responsibility because “he might hurt your feelings.” He’s direct and those of us who have lived LIFE, know he has a point. In fact, make that “many points”. In fact, maybe just in different words and with different accentuation, haven’t you told your teenagers the same at times that you felt they needed it?

So let’s take an honest look at LIFE and see if we can rustle up a little truth of our own. Please agree or disagree, but whatever you do and however long the list, add your own “Rules”. The purpose is not to be Smart Alec but rather for you and I to take stock of where we’re at and learn to live better lives with more realism, optimism, and energy than before. In a sense, Wake Up! it’s a new day. Be passionate about something that is bigger than you. Be kind, be good and as Abraham Lincoln said: “Whatever you are, be a good one.” and then that little attitude of gratitude – find one thing for which you can be grateful today – the air you’re breathing if you’re out of ideas – and be grateful for it/them.

So here goes a few thoughts:

  1. We are the sum total of our thoughts to a moment in time.
    Nothing is as sobering than looking back on our lives and realising that if we had more control over our thoughts, where they could have taken us. On the negative side, we all know when our thoughts have lead us down a wrong path and caused us to behave inappropriately; that’s putting it mildly. But let’s be positive and see in our mind’s eye those great thoughts that have spawned great things. The idea for a business that is a success, to get married to a beautiful person in every sense of the word, to have kids who we love dearly, to change a job and experience so much fulfilment. Thoughts that make us walk in the rain after a long, dry spell and even though we’re 60-something. Wonderful thoughts that have a momentary impact on our LIFE but that also, when the millions of them are aggregated make us who we are. Celebrate your thoughts.
  1. Choices make a man [and woman, if you are]
    Thoughts are not linear. I listened to AB being interviewed by Ali Bacher the other day. They discussed AB’s prowess as a rugby fly-half, his scratch golf handicap, and his ability to play hockey. But seriously talented, he chooses to play cricket – and the rest, as they say, is history. What sense, common-sense, advice, ambition, like, dislike, support, parent, school teacher caused him to take that decision and drop the others, except golf, and focus on cricket. Now we look at him with records all over his personal scoresheet, and we see magnificent “fit” and benefits to spectator and team alike. [Come back AB. The IPL is rich but the World Cup, much sweeter :-)]. In exactly the same way, we have made choices that have defined our lives. When I have a big decision to take, I often write down the scenario and the context because, as you often find, the decision seems to crash around you or is a rip-roaring success. Either way, I like to be able to look back and understand exactly what my thinking was then and reconcile to the fact that the decision seemed right at the time. Bottom-line of this tiny paragraph is that we are also the sum total of all our choices at any moment in time. So when you have a biggie to make, accumulate all your thoughts and take counsel of wise men and women, then evaluate the alternatives and choose the one that is the best for you at the time and for your future. Remember that buying soap and moving to a new town are hugely different so channel your emotions and, may I say it, your common-sense, to take the time to carefully consider the LIFE-altering decisions.
  1. Get over yourself
    So you look back honesty at LIFE and see that it has been pitted with mistakes. Mine too has big ones that I regret. Mistakes, that in hindsight, you think “what was I thinking/doing?” Some mistakes so recent that you could reach out and touch them whilst others so distant that you can hardly verbalise them. PLEASE, let them go. Let regrets vanish like the mist over the Vaal River before the rising sun. Use every means you have – your faith, your meditation, your exercise, your sleep, your good relationships, whatever, to get over yourself. You are worthy of better and the rest of your LIFE lies before you. Don’t allow mistakes to cripple your future.

    And a different spin on the same theme. I read a book by CS Lewis called Mere Christianity. An eye-opener when it comes to the universal malady of Pride. He’s so simple in his approach as to whether we are proud or not and asks that you ask yourself the question: “Am I proud?” If you say, “No”, then you are! You may not agree, or you may wriggle around the thought, but the Good Book says, “Pride comes before a fall.” The older you get the more you see the impact of pride on peoples’ lives. Pride, or arrogance, breaks relationships, threatens, claims rights that are not its own; arrogance can lead to complacency. As an historic corporate collapse, how much did pride and arrogance lend to the outcome at Steinhoff? I put to you that pride makes you bigger than you really are, “bullet proof” and highly complacent. Too many have fallen at that stage for me to be completely wrong in my assumptions. PLEASE ALSO let it go. Humility heals and teaches, humility changes attitudes, humility makes you think again and humility may ultimately save you from making a mistake that could be mission-critical to LIFE – yours and those closest to you.

  1. Learn
    In the book of her LIFE, Gail Kelly who some of us know [she was considered by Times magazine to be one of the Top 100 commercially influential women in the world], talks to the role of Learning. In fact, her title is Live Lead Learn. A different way of viewing this is to remember that no pain is wasted if it grows us. How else do we learn to walk? Babies fall far more before they learn to walk without a fall. LIFE is like that so get used to it. Nothing is wasted unless we waste the experience – that’s why it’s called Experience; we need to sense and feel some stuff before it sinks in. Resilience grows as we learn from experience and overcome obstacles on the path to success. But then the great thing is that when we understand the rule, we can teach it to others. Do you teach your children from Dr Spock et al or do you teach them from what you have learned by experience? Theory is qualifying, theory practiced and learned is education. Learn and Teach – your children, your pupils, your employees and eventually, yourself.

I’ve been long-winded as usual. Apologies. But when I speak from the heart about something that’s on my heart, I am passionate. As part of my purpose in writing these blogs, I am always confident that someone “out there” will read and need my message. May this blog be no exception to those of you who need a little perspective along your path at the moment.

Homeloan Junction serves a community in the property industry. We understand the up’s and down’s and are there to assist wherever we can. Contact us, we’re always available to talk. And, as always, we are grateful for your support and value your contribution.

Yours in Property.


I remember when I first came into mortgage finance. I could not believe the seasonal nature of Bonds. Shakespeare and John Steinbeck took the theme to professional extremes. But for now, to read at the fire with a glass of red wine, is Shakespeare from Richard III:

Now is the winter of our discontent

Made glorious summer by this sun of York;

And all the clouds that lour’d upon our house

In the deep bosom of the ocean buried.

Now are our brows bound with victorious wreaths;

Our bruised arms hung up for monuments;

Our stern alarums changed to merry meetings,

Our dreadful marches to delightful measures.

Grim-visaged war hath smooth’d his wrinkled front;

And now, instead of mounting barded steeds

To fright the souls of fearful adversaries,

He capers nimbly in a lady’s chamber

To the lascivious pleasing of a lute.

But I, that am not shaped for sportive tricks,

Nor made to court an amorous looking-glass;

I, that am rudely stamp’d, and want love’s majesty

To strut before a wanton ambling nymph;

I, that am curtail’d of this fair proportion,

Cheated of feature by dissembling nature,

Deformed, unfinish’d, sent before my time

Into this breathing world, scarce half made up,

And that so lamely and unfashionable

That dogs bark at me as I halt by them;

Why, I, in this weak piping time of peace,

Have no delight to pass away the time,

Unless to spy my shadow in the sun

And descant on mine own deformity:

And therefore, since I cannot prove a lover,

To entertain these fair well-spoken days,

I am determined to prove a villain

And hate the idle pleasures of these days.


Well done for pressing through! Thank goodness we don’t speak like this anymore! To be honest, you could just have read the first four lines (Sorry!!) for the point I’m going to make in this blog but hey, you have the time….. in the dull of Winter…….

Where is the property market? Well, it may be quiet in your neck of the woods but I remember the first time I budgeted for Mortgages. We dropped at the April holidays, bottomed for months during winter and then peaked in November. And, for all the years I’ve known the business, nothing has ever changed. Winter is “of our discontent”.  You won’t believe me but when I had the meat business the trend was almost exactly the same; the difference was December which was hectic as we all eat ourselves happily into Christmas.

Nobody buys a home when the veld is vaal and the mornings are freezing. And nobody sells when the dust clings to the walls because there is no rain. So to those of you experiencing a quiet market, it’ll be okay. The flowers will come out in Spring and “and all the clouds that lour’d upon our house in the deep bosom of the ocean buried”  [read: the clouds will evaporate from the sea in preparation for rain] the Summer rains will come to make everything green and bright. Spring brings the energy of decisions, risk-taking is easier and confidence abounds. Life comes back to normal in Spring. Spring is coming. It is, so hou moed!

Reading the latest ooba Origination report, I’m impressed with how volumes are holding up. “Application volumes for April 2018 were 8.8% lower month-on-month and 3.8% higher year-on-year. Our cumulative application volumes for the current financial year are 8.9% down on the same period measured in the previous financial year.”

April is up yoy but shows the normal trend to which I referred above when compared with March. To see overall volumes 9% down is really good. If you consider the muck-up our ex-president left behind, the re-ratings of SA Inc., and the mood of pessimism that pervaded our country towards his end of term, we are a resilient people, indeed. I still believe that Ramaphoria was a part of holding volumes and that interest rate decreases must have helped. But none of us laymen could have foreseen the wreck of economic growth in the Q12018. Basically, if you take Q42017 and Q12018 together, we had zero growth for 6 months; that’s frightening and brings to mind my comments of how zero growth creeps up on you, and the debilitating opportunity cost of the zuma era. So against this backdrop, I think volumes are holding up well and certainly in conversation with Vincent, the trend at Homeloan Junction is still very good.

Let’s chat about Ramaphoria again. I still stand by my prediction that we will see 1.7% GDP growth this year and I believe we will err on the 2% side. As you know the IMF has a similar prediction so I don’t think the Economists are rushing back to revise their predictions after the Q1 result. I haven’t even bothered to find out why we had the disaster in Q12018; frankly it’s what we record for the year that matters to me. Ramaphoria was crucial to our national psyche at the time. Sitting in Hermanus with protests all along the roads to Cape Town and the trip to the airport becoming increasingly unpredictable, it’s good to know that Ramaphosa is “there”. The alternative was never anything less than a financial abyss and, in any case, it’s good to lift my thoughts when I’ve driven home past burnt-out debris at Bot Rivier last night, and think that the right leader could turn this ship around. He has the credentials to change things and I’m not going to allow myself to believe any different. Driving through Fourways and Sandton again yesterday made me aware of the billions of Rands of buildings under construction, so believe with me. Sandton and Fourways are doubling, with more bling and glamour than ever, before our very eyes. I hold by my view that Joburg must experience a better than average house price growth in the next few years.

The outlier has become Cape Town for the first time in decades. John Loos at FNB titled his latest Property Barometer, City Of Cape Town Sub-Region House Price Indices  Slow. To quote further:

“The most expensive market, i.e. the Atlantic Seaboard, has seen its price growth slow the fastest off the highest base..” This tells me that even the rich have started some second thoughts. Continuing, he says:

“In the 1st quarter of 2018, the City of Cape Town’s estimated average house price growth rate remained strong at 10% year-on-year. However, this year-on-year price growth rate represents the 7th consecutive quarter of slowing from a 10-year revised high of 15.6% recorded in the 2nd quarter of 2016. [Flippit, that was impressive!]

But now, the slowing growth in the seaboard and under-the-mountain areas is not reflected in the northern suburbs of Durbanville-Kraaifontein-Brackenfell which “continued to accelerate mildly, from 9.8% growth in the final quarter of 2017 to 10.1% in the 1st quarter of 2018. Moving into even more affordable regions, we have recently seen price growth accelerations. We have seen the Cape Flats House Price Index experience further growth acceleration, from 11.4% year-on-year in the previous quarter to 11.6% in the 1st quarter of 2018. The Elsies River-Blue Downs-Macassar Region has also seen house price growth accelerate further to reach 25% year-on-year, from 23.7% in the previous quarter. This, too, we believe could reflect a mounting search for relative affordability after rapid price inflation in the higher priced “suburban” areas in recent years.” [This is a 2-edged sword. Poorer people are beginning to enjoy property capitalistic wealth but the Poor are being excluded from affording property. Not minimising this issue, the Young are experiencing the inability to own property the world over even to the point of it creating social tension]. Evidencing this, John says, “1st time buying levels, according to the FNB Estate Agent Surveys are very low in Cape Town relative to the rest of SA.”

In conclusion, he adds, “Questions continue to be asked as to whether the drought has taken its toll on the housing market in Cape Town? We believe that it must have had some impact, via its negative impact on the Western Cape economy, as well as on sentiment within and towards the region. We have also estimated that repeat home buyer “migration” to the Western Cape from the rest of SA has slowed in 2017, a further factor in slowing Cape Town housing demand. This slowing may be in part due to poor home affordability in Cape Town as well as due to the drought making the region temporarily less appealing. Going forward, however, should the drought conditions deteriorate further, at some point it is conceivable that they may become “recessionary” for the Western Cape economy, and at that stage it could have a very significant impact on the region’s housing market. But that’s a major risk to the region which is not easily predictable.”

And this final little gem which brings me to a close: “Much depends on the 2018 Winter rainfall season in the Western Cape.”

You see, Winter is good in the end 🙂

Yours in Property.


I listened to some interviews on the way to the gym about experts’ opinions of Freedom. Added to those, it must be the day itself that got me thinking about the Freedom we enjpy.

Can you remember where you voted? Mine was at Constantia Kloof Primary School in Roodepoort. The day was 27 April 1994. The weather was a bit like today, a soft breeze cooling the piercing South African sunshine. The mood was friendly, almost jovial and even though we were, some of us thought, giving away our freedom, we were pleasantly surprised at how peaceful, efficient and sincere the whole event was. The queue snaked for hundreds of meters and our waiting time was probably about 2 hours [not bad compared with some voting stations]. The attendants, all new recruits of the newly established IEC, were proficient, smiling and understanding. A mixture of white and black, they were a demographic equivalent of the queue outside. Standing there with maids, friends, acquaintances, men, women, and a peppering of soon-to-be, black diamonds, we found ourselves making light of what was to be the next 24 years today. Many had stored baked beans in makeshift shelters, many were considering emigration, many were still afraid of each other and what harm may come to us from the hand of others. The gravitas never hit us until Nelson’s famous speech under the awnings at the Union Buildings. Since then, we have experienced the tremendous ups-and-downs of a young democracy. Some think a low-intensity war exists in our lands, others have grasped the opportunities that the downfall of the Group Areas Act [in 1992] ushered in, for some urban life has honestly changed little and for others, the entrance of freedom has not changed much by way of their poor living standards.

Somewhere in that ramble, you can place yourself. Many of us have since emigrated and view the land from afar. Others have grown and prospered despite the numerous perceived obstacles. A section of the population has grown by leaps and bounds to become the emerging and perhaps for now, the developed middle class; some 5m people it is estimated. Some have become embittered by the absence of service delivery, the most recent riots in North West Province simply a tip of the iceberg say others; promises made but stillborn,  while some prospered and others languished in degrading conditions.  State Capture with parallel government flummoxed us. How the … did we get there?  Thank Goodness that we seem to have recovered from the brink of financial ruin. To the top of the wave and the bottom of its trough, but always on the edge of what is and what could be.

And so it goes, we can all find ourselves in this beautiful and sometimes tortured story. What do we make of it? On the one hand, grateful we have been spared greater possible calamity and on the other, acutely aware that the opportunity cost of the past 10 years cannot be eradicated overnight. Excuse the correctness of the details, but I hear that SAA needs R20bn to survive and if sold, would need to fetch R60bn just to pay its debts. I know what I would do but the stakes are off the page! I attended the first Senior Executive Programme presented by Harvard Business School in 2001 with a cross-section of South African leaders. One of the lectures was pure American turnaround strategy and the lecture [advice? best practice?] was something like this: “outsource it or privatize it or close it down” if it’s losing money. The example at the time was the harbours component of SAR&H [South African Railways and Harbours.]. Afterwards, we discussed the material in small groups and I remember being, well “American”, in my approach. Suddenly, from an executive of National Treasury came the much-needed rebuttal: “What would happen if up to 60000 people became jobless overnight and had no social underpin – which, frankly compared to America, we still don’t have? Boom! Like a blow to my social and financial solar plexus, I was winded and had to go back to my mental drawing board. I still often think of that question when I ponder just how we bring about social equity in this country.

So just what is this Freedom bought through struggle and political and social compromise? Let’s explore for a moment:-

“Freedom”, said one of the interviewed on CapeTalk, “is the opportunity to self-determine.” Another added something like: “Freedom is the autonomy to decide what you want and in doing so to choose to pursue your outcomes with dignity and respect for others.”

The Cambridge dictionary defines Freedom as:

“The condition or right of being able or allowed to do, say, think, etc. whatever you want to, without being controlled or limited:

Everyone should be allowed freedom of choice (= the ability to make their own choices).

Freedom of speech and freedom of thought (= the ability to say and think whatever you want

And, current campaigning for freedom of information (= The ability to access the internet free-of-charge anywhere) (My parenthesis).”

Pretty hard stuff if we’re honest. Having had to do with poorer people, I have seen how poverty not only dims the eye but also the mind; how it consumes the person and limits their ability to see, let alone grasp, the opportunities being presented. It takes an admirable and monumental effort for a poor person to break through and make a financial success of their lives. All around us we see examples of those who have not been able to chisel through that ceiling. No wonder politics seems to hold sway for so many, and in recent times, people have died for such a place on the hills of KZN.

Freedom to own property rightfully paid for is one of the bedrocks of financial freedom. It touches who we are and what we own. It gives us the ability to borrow and to lend and houses our most precious asset, our family. On the other hand, we are going to have intense debate on the freedom to own property. Personally, I think that we are going to resolve the issue despite some very stressed societal negotiations. The reason I believe this way is not puritan, but rather because we have to find the way through as a national imperative – I personally still cannot see how expropriation without compensation is ever going to work across the board.

Freedom, like power, is not a right and may not be abused. Like we prosecute criminals, the abuse of Freedom is intolerable. Many would say that Freedom therefore has necessary boundaries. The liberals among us would disagree demanding only self-control – a kind of Nike moment, Just do it –  but those of us who have lived next to a neighbour’s barking dogs, know exactly what I mean. How much more, my freedom at the expense of others’ rights and privileges?

Suffice to say that Freedom is precious and should be guarded with our lives. Enjoying it is our privilege. It drives our inter-personal relationships. It drives our economy, the so-called Free Market principle. As such, it places people in homes and moves them whilst it ensures values for their properties. Freedom to be selfish and Freedom to help others lies in our same breath. You may not like that, but that is the price and responsibility of the very Freedom we cherish.

In closing, I have just read an advert for a local construction company and it goes like this:


A Swedish family decided to make a piece of Hermanus, the South African sun and blue skies their own, and fell in love with a Northcliff home built in 1948.”

I’m not sure where your heart is as you finish reading this blog but why don’t you just let your guard down a little, temper your complaints, raise your vision and become a part, however wavering, of the groundswell of good sentiment and willing hearts that will make this an amazing country to live in? All her people, every race, creed, foreign or local, and strata of wealth, deserve a touch of your and my good grace to make their days happier and healthier. Like you chew a good steak one bite at a time, don’t despair that the best you can manage may not change the world but could change the world around you.

Homeloan Junction commits itself to just such a path.

Yours in Property.


WOW! – The news this week has been off the charts.

The World Bank has increased the global growth rate prediction from 3.8 to 3.9%. Doesn’t look like much but extrapolated across the world, that’s huge.

CR has appointed a super-Team to trawl the leading investors for $1tn in Investment in South Africa. Some of the finest networks, the greatest minds and the cleanest hands in the country are going to be out doing battle for investment Dollars. Put behind you that the last time when we came close to such an initiative was when our erstwhile president recalled Pravin Gordhan from an investors’ meeting where $5tn was meeting to discuss SA as an investment destination.

Gwedi Mantashe and CR are making good work of the revised Mining Charter and the legal framework that gives it legs. Positive discussions are taking place to find the economically fair ground that serves social equity and investment. Find that and we come alive with opportunity and word has it, mining projects that were on hold pending the past minister’s removal by commonsense, could be released for development.

The IMF has upped the SA growth rate to 1.5% minimum and up to 1.9% for this year. You read it first in my previous blog but, hey, who cares who gets the scoop on excellent news!

Flippit, this is good for everybody. WOW!

In a country rich with heritage, blessed with resources and inhabited by beautiful people, we have so much going for us. We have speculated before on what could happen and it seems that before our eyes we are beginning to experience the unthinkable just 5 months ago. Leadership has made an enormous impact in a short space of time. Now we need rain down here!

The latest Property Barometer from FNB has some interesting news on secondary home buying. Just fyi, the reasons for secondary homes are predominantly, buy-to-let, buying for another member of the family and leisure homes. Although the smallest percentage of the overall market, buying for other family members has increased way more than the other two. I would like to focus on that for a moment.

According to FNB:

In the 1st quarter survey, it was only the 3rd and smallest motive, i.e. buying a primary residence for someone else, that rose quarter-on-quarter, from a lowly 0.37% to 2.01%. This is the strongest estimate in this small category since a 9-year high of 2.32% reached in the 3rd quarter of 2015. This “jump” comes suddenly, and the estimates for this category of buying can be volatile, so we are cautious not to read too much into it.

However, we are well-aware of South Africa’s very weak household savings rate, implying many people ill-prepared for retirement, resulting in a need for support from younger family members in their older years. The phenomenon of “hiving” (3 or more generations of a family in the same home), or in some cases buying another property for a family member, on a larger scale could be the result at some stage.

Is the rise in this survey estimate beginning to reflect the above challenges?

There are two forces at play in this sector. The one is longevity with inflation and the other, not mentioned by FNB in this survey, the purchasing for children.

Just addressing the children first, worldwide with property prices rising exorbitantly, parents are buying homes for their children. Once we received our first car from our mom and dad, but today in increasing numbers, mom and dad are buying their children their first home. Nothing fancy but a huge boon for youngsters setting out on life. The purchase takes a few forms such as outright purchase as a gift, lending money to the children and monetizing the loan as part of the income, pension or otherwise, of the parents or, simply a large deposit on the property to bring the bond into affordability. I would imagine that the use of trusts in these cases is quite normal so as to protect the asset. Those of you who follow the UK property market will know that property has moved away from the common man never mind the youngsters. In this case, many hybrids of what I have just discussed are used to fund a home for the children.

In a sense, the move to private university accommodation [student accomodation] which has proliferated in the last 15 years is nothing more than this trend. Rather than house, if it is possible in any case, your child in a varsity res, you buy a small flat and use it for the years that they study. It’s not unusual to let the other room for income for the child or retain it for a younger sibling on their way to the same institution. Student accommodation has proven to be a great investment over the years with rising yields and even capital growth. It is really sustainable as university budgets are hammered and cannot any longer build residences – by the way, the protest for accommodation in recent student protests may not simply be entitlement as some seem to think, but the very issue that accommodation is simply out of reach of the less affluent students.

Let’s finish with homes for parents. It is not longevity that causes problems with income over the years but rather, inflation. Keeping pace with inflation is hard enough as it is, but living a long time with it is a scissor grip from which many cannot escape. We find ourselves surrounded by octagenarians who are quite open about the fact that their children help them to live. Whether that be by way of housing or a subsidy or both, life on the other side of 70 is tough for most people financially. So, my reader, what do you do to avoid what is obviously on its way? Some suggestions:

  1. Those who can buy a retirement village home that precedes their needing it one day. Let to retirees who prefer to rent rather than buy when they retire, such a home does not make a great return but does pay for itself. Also, when needed, it is available fairly readily because you need to remember that retirement villages are scarce resources and you don’t just get in on the day you decide you need to.
  2. Be aware of the retirement conundrum before you have to retire. I say this because what is an obvious projection when you’re healthy can become an immediate nightmare when you or your spouse is not. It may sound radical but given that units in retirement villages are either scarce or increasing in value faster than your residential property, you need to consider down-scaling your home so as to afford a retirement unit and a freestanding home before prices move away from you and you can’t buy the unit you really want. If you do this, rent the retirement home as indicated above.
  3. Many retirement villages are Life Rights. Relatively inexpensive to acquire, a downside may be that you’re not able to rent the unit to a third party. This puts pay to the idea above and you must ensure rent-ability is confirmed in writing before you buy.
  4. If you’re reading this and you have concerns about your ability to retire in principle knowing that your genes live long, then consider selling and making the move sooner rather than later. The reason is the old issue of opportunity cost. As an example, a R5m home can cost you R8000 per month to service and maintain but sold, it can provide you R500000 per annum in a preference share. Sure you have to do your sums and will probably spend half that buying a retirement unit, but the point stands that the sooner you release funds for a smaller home and retirement income, the better you will cope with ever-increasing costs of living.

In the part of the world that I live, I see the above daily. It doesn’t just take extraneous political factors to set one’s mind reeling, you just have to see what it costs year on year to eat out to understand that many luxuries today may not be attainable tomorrow. The sooner you get over yourself and understand the new reality, the better. The exception could be significant capital growth in your current property but, when the chips are down, a Rand in the hand could be better than a double storey.

Property and life are inextricably linked at an individual level. And, so it is for Homeloan Junction. We understand the implications of what’s been discussed above and can give an answer or refer many of your questions as regards that connection between your home and your lifestyle. We would welcome such interaction and will be there with finance as required. In the final analysis, we care about our customers.

Yours in Property


It is not profound to say that good news is better than bad news but, my goodness, the statement in property that there is some good news is very profound. The reason, as we’ve discussed many times, is that Confidence is the primary yeast of mortgage book building and mortgages mean house sales. In addition, in this blog I have nailed my colours to the mast and said that Gauteng is on the verge of increasing house price movements. Good news, obviously followed up by business activity, will change the shape of Gauteng house prices. The sleeping giant will arise in my humble opinion and, in turn, Cape Town will slumber for a season. In the former, house prices are too low to represent value and in the latter too high to represent value. Put incredibly simply, selling a house in Joburg and trying to replace it in Cape Town is well-nigh impossible. I have two friends [sad hey? – just joking], who are experiencing this big time; the one Joburg to Cape Town and the other, even in KZN’s North coast developments.

This trend is highlighted in the latest FNB Property Barometer: 1st Time House Buyers. John Loos reports:


We find Gauteng still to be the strong 1st time buyer region on the one hand, and Cape Town to be the very weak 1st time buyer region on the other.


Greater Johannesburg had an estimated 1st time buyer percentage of 21.59% for the 2 quarters, and Tshwane Metro a massive 30.75%.

In the 3 major coastal metros, Ethekwini Metro had the highest rate, i.e. 20%, Nelson Mandela Bay a weak 10.5%, and Cape Town Metro a very low 6.46%

These major divergences partly reflect diverging home affordability trends in recent years. We believe that slow house price growth in Gauteng over the past decade or so has greatly improved home affordability (average house price/average household income ratio), whereas at the other end of the spectrum, Cape Town’s home affordability has deteriorated significantly during recent years of greater market strength and strong house price growth.


In short, FNB is saying that new homebuyers can’t afford the prices in Cape Town but can afford the slowed down prices in Joburg. Extrapolate that fact a few layers upwards and the middle+ markets, who are baulking at Cape prices, are seeing value in Gauteng. Really glad that we have this green shoot confirmation of above-average rising prices in Gauteng; a stance this blog has taken since December especially.

And here’s a stab in the same direction – the national GDP growth rate is going to be at or near to 1% for 1st Quarter 2018. May be naive but we should not underestimate the force of positive news on our economy.

A person who I have not had the privilege of meeting but who I admire through the Press is Andrew Cantor, CIO of Futuregrowth. Futuregrowth is a huge investor in Commercial and State Owned Enterprises [SOE’s]. It was Futuregrowth, with other significant players, who eventually refused funding to Transnet, Eskom and that other cash-eater, SAA, in 2016/7. Thankfully, we have not yet experienced the dire predictions of those times and may it remain so. But Andrew has written an article entitled, It’s not so gloomy in SA, in Financial Mail, the main points of which I share with you as an extract:

It has become all too easy to overlook the positive forces that have been at work in the country in recent years, and to underestimate the potential that exists for positive change.

It is my belief that SA has many core strengths and that its challenges can be met. I am comfortable, on a daily basis, to invest pensioners’ savings into this country.

We all know the bad news. So, to explain my confidence, I’d like to offer some perspective.

SA has witnessed a remarkable political change: a new president, new cabinet and clear evidence of a crackdown on corruption.

The Futuregrowth credit team has, since the fourth quarter of 2016, been in engagement with the six largest state-owned enterprises about issues of governance. We found that four had reasonable governance structures and practices and, subject to certain changes, we recommenced lending to them. Eskom and Transnet have been at the centre of serious allegations and these are being investigated through various parliamentary and judicial processes. Our analysts continue to be in discussions about governance and improved disclosure with both these organisations and are finding them co-operative. We have not yet recommenced lending to either.

As we look back, there are some very positive signs despite the past difficult decade:

  • SA’s constitution and judiciary have stood the test. The principles of the constitution were defended repeatedly by a free and independent judiciary.
  • SA’s incredibly free press played a critical role in creating a channel for truths to be aired and for the public to become aware of the problems.
  • Democracy itself has played a key role. The ANC suffered meaningful setbacks in the municipal elections of 2016, and the mood of the electorate was a clear warning that change for the better was vital for the party and the country.
  • Civil society found its voice through whistleblowers, e-mail-leakers, writers, academics, entertainers, financiers and others.
  • National treasury is the linchpin of fiscal control, and has a strong culture, with many dedicated professionals.
  • Often forgotten, the Reserve Bank has constitutional protection, a clear mandate and independence.
  • And SA has a large, professional and ethical investment community with a strong pension fund investment culture, legal frameworks and regulatory oversight.

As a bond investor, I deplore the weak standards in SA’s listed corporate bond market. However, that perspective can do an injustice to SA’s very strong equity market and its remarkable government bond market. Both are world class.

And we are in a unique historical position to effect positive change.

Despite good global growth in recent years, domestic mismanagement has undermined fiscal accounts and economic confidence — resulting in low domestic growth, credit-rating downgrades, and worsening inequality.

That said, the economic outlook is brightening:

  • While GDP growth estimates are still pencilled in at between 1.5% and 2% for 2018 to 2020, the rise in confidence gives a likelihood of materially better outcomes.
  • Domestic inflation remains subdued, offering scope for monetary policy flexibility.
  • We expect better fiscal control and growth to stabilise SA’s credit rating.

As we approach the 2019 national election there will no doubt be comments and cross-winds. This may be unsettling, but during my 28 years in SA good sense has ultimately prevailed.

Shew! If that does not encourage you, nothing will. Bad news will always be there. Just had lunch with British people and they are concerned about Brexit and would love to live here; how’s that? Andrew’s perspective lifts us from the gloom and places us in hope.

Do you do that daily where you touch the lives of Others?

Yours in Property.

PS – if you are looking for experienced and professional assistance with the home buying process, Contact Homeloan Junction – They take care of all the steps so that you can focus on what matters most to you.


The beautiful seaside town of Hermanus has not been spared the ravages of land invasions. The accusation is that people have waited for houses for 20 years and are now completely impatient. Having the unrest close to you is nerve-racking and our hearts went out to the peaceful residents who live in Zwelishle. As is so often the case, they bear the brunt of the ire of the crowd and get beaten and even to death [3 cases as we understand] for simply going to work. The local churches have set up Safe Shelters and we are feeding and caring mainly for those who feel completely unsafe going back home. The Housing MEC flew in yesterday to meet with the protesters and things seem quieter [27/3/2018]. Let’s hope that sanity prevails and that justice is served both for criminals who have looted and assaulted, but also for genuine cases of long-delayed housing delivery. Our Municipality has assured us that we are one of the most progressive house-building local governments so we must take them at their word at this stage. What I can say is that in the last three years many homes have been built and many are under construction, but obviously, not enough for the Eastern Cape and foreign people who have semigrated into the Cape in general. The irony of irony is always the burning of buildings – the satellite police station which could have provided protection and investigation and the other, the….wait for it…..the Housing Department. The latter holds the lists of Awaiting Houses people. So let’s hope there’s back-up in this crucial area.

All of this speaks to the Land issue with its component parts:

– Vacant land;

– Services;

– Service delivery of existing housing, and;

– Housing construction and delivery to the properly prioritized people.

To the latter pair, does anyone know if the government has completed the delivery of title deeds to the so-called “matchbox” houses in Soweto? If not, that’s a scandal of immense proportions as long-time residents of those houses could have formed a symbolic body of homeowners able to benefit from the wealth creation of their properties.

God knows, the Land issue is now worldwide. Detaches delivered to the Australian government do not help and the lack of comprehensive, understandable, compelling communication to every global stakeholder is vital. You don’t redistribute land even with compensation, never mind without, by passing a resolution at the ANC Elective Conference and then go quiet on all of our major trading and investment partners. Little wonder that the Australians, who are building a nation of highly skilled and vetted immigrants, have taken the gap of practically inviting our farmers to apply for visas. Sensationalism aside, we have some of the finest agricultural skills and expertise in the world and most certainly in a water-scarce country, which Australia also happens to be. Until we realize in Home Affairs that Skill is a globally competitive commodity, we will not replenish the hundreds of thousands of people who have left for other lands. It is not about race or ethnicity – if you stand on a Vancouver street corner, you will be shocked at the number of Asian folks who have immigrated there. Where did they come from? Hong Kong certainly, and in the face of the uncertainty of the British handover to China. Skills walk and Money talks.

Shew! That was a headful to get on paper. So why do it? Well, the price of property will be linked to the long-term affordability of our population. While everyone will not be rich, everyone can own an home appropriate to their affordability. As is obvious, the home is first of all shelter, second of all family security and sense of being, but thirdly, a source of wealth creation. We can remind ourselves that for most people, their pension and their home are their ability to retire – one or the other missing and the prospects will look bleak. We will never progress our nation until it catches the dream of the likes of Joe Slovo who set the goal to build 1000000 houses by 2000 and succeeded, even posthumously, to beat that goal. The American Dream of home ownership was not motherhood and apple pie, it was about the mighty American Dollar and the profit that could be made. In turn, it worked for all who succeeded to realise “the dream”.

Developers reading this, we salute you. You are building the national housing stock and that is meritorious. Keep it up!

The news did indeed travel fast. From Cape Town, the Vaal, Joburg, and Sydney message after message to find out how we are. So far we are good but every hour a new threat arises from people intent on destruction, another spear of fear penetrates the hearts of the people of this town and its surrounds. Let’s hope the violence dissipates and with things back to normal, houses get delivered as soon as possible.

But, there is other much better news. The Moody’s decision to retain our rating bordered on a miracle. To have held the downgrade off was a gift to South Africa. Remember that their decision would have plunged us into full junk status and to the point that the Citi World Bond Index would not have been included in offshore Bond mandates. In simple terms, $10bn of SA Bonds would have been sold off in no time. They prevented that ignominy and financial destruction just by holding the rating. But then to give us the filip of lifting the negative watch to Stable was amazing! It sets the scene for a few things that should excite us:


  • It gives the new Administration and its decrepit SOE’s a financial space to move on critical initiatives. The cost of funds should not rise and we need every Rand we can spend on turnarounds right now.
  • It gives the SARB the space to manoeuvre interest rates and I for one, am backing a decrease in Bank Rate come the next MPC. Allied to this as we have noted, the strengthened Rand also gives the SARB much-needed headroom for a rate reduction.
  • It may spur the other Rating Agencies to review their stance on South Africa.
  • Finally, it’s just some good news amidst the gloom that has succeeded Ramaphoria.


All of the above said, am I negative? No!

We live in a vibrant country that is grasping the nettle of social inequality. We will make some mistakes in our rollout and even frustrate many with the pace of change. But ultimately, we must survive and even thrive in order for our People to enjoy a developing economy. I can understand people who are cynical about this approach but we have chosen to live positively and faithfully in our beautiful, tortured country. For some there is not an option but to live here but for others, it is a choice. Either way, as in all of life’s challenges, you can be positive or negative. The decision is yours and the way you react to a stimulus will always be your responsibility. I choose to live positively and remind myself of that whenever I need to “hear my own prayers”.

HLJ agrees and we invite you to do the same. It’s not fairyland stuff, just a simple choice to be happily effective in what we CAN DO.

Yours in Property.