SOMETHING DIFFERENT

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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.

100

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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.

THE WINDOW TO HOUSE PRICES

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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.