HAVE YOU TOUCHED AN ORCHID LEAF?

/in /by

It must be the spirit of Christmas that drives me to write this last blog for the year.

I have just read the December 2019 report produced by Carnegie Endowment for International Peace entitled: Nuclear Enrichment: Russia’s Ill-fated Influence Campaign in South Africa. It is the story of the association that nearly cost our country its autonomy. Totalling R1,088,320,000,000, it would have bankrupted us, leaving us on an economic rubbish heap from which we could only have ceded the assets of the nation to repay our debt to Russia. But then, there is the orchid leaf….

I was asked this morning to wipe the leaves of our orchids. They have become dusty from strong winds with little rain blowing over the construction of a new gym in a nearby sports complex. The leaf is strong, almost like an aloe in surface texture but, of course, much thinner. It is easily broken; I accidentally cracked one vein and will wait to see if it repairs itself. It is deep green and obviously soaks up the sun. The plants stand in a breeze and even in the flimsiest of soil, they gather whatever moisture they can from the atmosphere. For those of you interested, they are fed a diet of two ice blocks a week with the odd pouring of water in and from an emptied milk carton [like their owner, they like long life full cream milk [because it tastes like Ideal Milk ☺]].

A colourful picture is at the top of this blog fyi.

That leaf spoke lessons to me. 2019, not perhaps the brightest of years for many and again one loaded with all the bathos and paradox of our tortured, beautiful country. For some, it has delivered unexpected records whilst for others, it has delivered sorrow and hardship. Remember, Life is a railway track: Blessing is one of those tracks and the other, Opposition. They operate together and co-exist, only joining at the distant horizon. There are many lessons from the metaphor and I briefly summarise some for your consideration.

Humour in Adversity:

We manage to laugh at ourselves. Last night our complex had a party in the park to celebrate the arrival of our swallows [people from overseas who come for their summer holidays] and just wish each other well for the Season. At one point my neighbour laughed at the fact that we start off well and then start talking about South African woes. We paused to reflect on our troubles, stared at our chilled wine, and then remembered that as a civil engineer, his job included building sewerage works. A number of the best sewerage works in the country, nogal!

Needless to say, the shitty jokes started and the back-slapping ended the woe-is-me and ushered in the more intellectual and sensitive conversation that wine in the great outdoors produces. You see adversity, even the worst of it, is offset by humour. When last did you laugh from your belly? For that moment, like hitting a little white ball on a golf course, your troubles leave and your joy abounds. Try laughter and fun. Nothing negative can co-exist with their pleasure.

Hope in Chaos:

We have been hit by 100-year drought and the suffering has been insufferable. We have endured tornados in mid-KZN. By the way, talking to my sharp, old neighbour this morning, in the mid-40’s Brakpan was devastated by a tornado; we reminisced that we were pleased our place of birth is still standing! But we have also had floods and once again, Centurion and KZN took their frequent hit.

Life has storms and times of drought; sometimes we wish it stable and constant but it delivers opposites. Hope, our old friend to which we have often spoken, lift our heads in these times. If you’re out of it, lift your head. If you’re in it, lift another’s.

Perspective of what can be:

Another friend is Perspective. I have recently watched the World War 2 episodes on Netflix. I love war movies but I’m never quite clear why. Blood and guts and troops running into almost certain death voluntarily so that we could remember them on Poppy Day and be grateful for the Liberty and Life they fought for. But one thing that never ceases to amaze me on the face of troops and POW’s, is the odd smile. I watched as Bomber Battalion prepared to fly sortie after sortie into Nazi Europe with a 50% chance of returning; as they mustered and gave slight smiles, they must have had some awesome sense of perspective. They “knew” that they would come home and that eventually, the world would be a better place for their sacrificial service. Faced with far less serious issues, I put to you that your perspective, your sense of “what can be”, can lift you and keep you up there no matter what.

Live the moment:

I’m going to finish here. It’s a platitude that is oft used and seldom implemented. However, in this Season of goodwill and family, why not give it a try? The past is but a memory – thank God for the many good ones. The future is what it is, uncertain but probably not as bad as our most negative thoughts have imagined. To the point of Carnegie’s report, we came so close to catastrophe…. but we didn’t. Brave journalists had a confidential report leaked to them, Chapter 9 institutions stood up and fought way above their weight in court, and honest politicians took the yoke of “not-in-my-name” upon them. We dodged the bullet or experienced another miracle whatever your conviction, but we saved our national autonomy from the fire.

There is a Season before us. Families will come together and put away their differences. Gifts will be handed out to gesture our love for each other. Peace will be felt in most places and food will adorn many of our tables. Fairy lights will dispel darkness and even though that sounds like an Eskom joke, we’ll smile as they flicker on the tree.

Many will not have Christmas as they endure poverty for another year; in South Africa the opportunity always exists in no mean measure, to share an act of kindness and generosity. Just Do It! But most of all, soak it all in and for the next few days, let bygones be bygones and the future look after itself.

Homeloan Junction is grateful for you. For your care and support in this year and, in advance, for the year to come. 2020 has a good ring to it, doesn’t it? See you soon in it.

And in all the glitter of the occasion, touch an orchid leaf. You will be glad you did.

Yours in Property. 

A COMMENT AT THE END

/in /by

2019 will go down as one of those years we would like to forget.

I’m always reminded as I say that that things could have been worse. A defeat of Ramaphosa in December 2017, just 2 years ago, would have made the last month of Eskom look like a kiddies’ sleepover in comparison. Eskom would have bankrupted within 6 months and Dudu would have flown SAA into the ground. Losing employment would not have been an option so more people and leadership would have been recruited to fix the mess and finally, the goodwill towards the country would have imploded.

As forecasted by RW Johnson, the SA government would not have agreed with the IMF and instead, would have printed more Rands “like America and Europe” in Quantity (sic) Easing, and wham-bang, we would have slid into Zimbabwe-like chaos. My humble opinion granted, it was that close.

I’m pleased I have no need to defend my argument as that never happened. But I read the latest whistle-blower’s report about Public Protector, Adv Mkhwebane, I’m reminded that the country was run by the SSA under the direct command of his lordship. It didn’t happen and that’s all we need to take out of the last two years right now.

There are many articles written about what HAS happened. I cannot remember all, but for me, noteworthy has been:

  • President Cyril Ramaphosa won the ANC election and ousted ex-president Zuma.
  • He has managed to assert many initiatives despite fierce white anting from his own party and so-called allies.
  • He has established commissions of inquiry into SARS, the PIC [imagine millions of civil servants without pensions and their hard-saved cash squandered by Gupta advisors] and State Capture.
  • The first one brought about the demise of Tom Moyane in an interim report and he has since been unable to overturn that decision. SARS, therefore, is on the path to recovery and I note from the matters upon which I serve, that cashflow has returned to SARS and they are no longer being accused of withholding reviewed taxes.
  • The SARB is in safe hands for now.
  • SAA is in business rescue. An absolute first for SOE’s, and an embarrassment to the ANC, it is now going to be fascinating to watch how the seasoned Les Mathusen manages his rescue plan. The unions, which forced the hand of the Presidency, one in shut-down and the other in a court application, have offered to work with the Business Rescue practitioner to prevent the liquidation of SAA. Watch this space as Mathusen unpacks the over-staffing, the over-charging, identifies the profitable businesses and routes, orders the sale of assets and retrenches thousands of employees in order to save the airline. He has endured no bigger stakes in his career, I’m sure.
  • Eskom – Eish! = Eskom Is Shedding Hourly! Every time Eskom load sheds, we write about -1% of our GDP growth into history. Irrecoverable and tragic in its consequences. It would have been worse, and seeing Cyril and Pravin jump in and help, for all the cynicism, is still better than shots of our President visiting Egyptian pyramids. The stakes are higher than wet coal; in faraway walnut offices, our junk status is being debated.
  • The NPA is being fixed and the Scorpions-by-another-name are coming into place. We will see prosecutions commence and some conclude in 2020. If our President really wanted to show intent, he could set up some fast-track courtrooms, resources and processes to prosecute low-hanging fruit cases, like that udder one called Estina Farm.
  • Every day be grateful for Amabhunghane and Scorpio. Bravest of the brave men and women have exposed evidence of exceptional proportions pointing to large-scale corruption by the highest of leaders. If ever a fish rotted from the top, the stench has been reported in excruciating detail by these journalists. Freedom of the Press, a cherished ideal of democracies, is alive and well in SA.


So much is not ideal but so much is far better than we could have hoped for two years ago. I always remind myself of that in my darkest [Eskom and other] days. You and I have been recipients of one of those “miracles” in South Africa; you can use any term you like to describe what could have been, but now what is, happening. The property market has been as interesting as ever. Anecdotally, houses under R3m are selling and upmarket homes are only selling at very deep discounts.

Two almost-humourous comments I’m regularly hearing from estate agents are:

“Prices had to drop, you know” and “Bargains abound now.” Both are platitudes for a really quiet, really buyer-based market. If you take the noise of politics, both national and international, out of the data, the fact is that economically, we are heading for an upswing in prices. Predictable interest rates, falling house prices and banks willing to lend are sure-fire bets for an upturn.

You establish a blush of confidence and the market would rebound in months and set sail for easy blogs to be written ☺ [I really battle to write upbeat stories in this depressed market ☹]. Seriously, every downturn has felt like this; we’ve just had more to hang our hopes on politically speaking. October’s origination record may have felt like a flash in the pan, but what if it portends exciting things to come?

Nothing beats a little R&R in the midst of the battle. Christmas is coming and the 13th [Friday nogal!], marked the beginning of builders’ holidays. Even the kids went off earlier this year – sorry, Moms. Com’on, let’s smile a little and enjoy the rest of the Season. I know “things could’ve been worse” doesn’t smack of motivation, but it is a damn side better than many more bitter facts.

Yours in Property.

@Christmas…

SAA and PROPERTY

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On Tuesday I flew to Joburg for business. Boarding my usual redeye Kulula flight, I was struck by the SAA plane parked next to us. The stairs were pulled up but not engaged and the pilots’ windows were frosted by early morning dew. Obviously, that plane was going nowhere and that had been so for some time. Isn’t it sad that two unions could cause that 15000 employees received half their pay and, according to management, the other half and their 13th cheque [?] will be paid next week.

The only thing I can see as good in all of this is that the unions have again highlighted the travesty of management’s incompetence and corruption including poverty, illness-pleading Dudu Myeni and that DPE has stood firm on not funding the business. To the latter point, where the R2bn rescue-package comes from I have no idea.

Property isn’t flying either but in my bones, I feel something is happening. Property is caught up in the economic malaise but I’m really hoping we won’t need business rescue. Reading the latest research, Standard Bank lends some substance to my emotions in their Property Research on 14 November 2019:

Bottom seems in sight — but a long recovery awaits

Nominal house price growth, per our inhouse Standard Bank House Price Index (HPI), ticked up to 4.0% y/y in October, from 3.7% y/y in September. HPI growth was 0.5% m/m, after contracting 0.3% m/m over the same time. Still, house price growth has struggled to grow at rates similar to last years because of SA’s sustained weak economic fundamentals such as rising unemployment rates, labour market uncertainty, and depressed confidence.


You know, coming off a previous month’s negative house price growth, I’ll take anything on the upside. I’m also acutely aware of the previously reported record month in Origination. That flows through to every market player and is such amazing news. In Hermanus, there is something abuzz. From the “dead” and “if only someone would phone in” to “there’s something happening”.

A home was sold to Americans at a good price in the scheme of things. A local paid R6.9m for a 1-bed home on the golf estate. The town is buzzing and occupancies are projected at 80% over Season compared with 30-50% last year. It seems relative social calm and the full dams is having a positive effect. “Bottom seems in sight” is a really good headline from a major bank and it’s a damn side better than we’ve seen for a long time.

The SARB interest rate decision was excellent in my opinion. 0.25% is neither here nor there and at 3/2 in the voting, it was an exceptionally close call. Very interesting to see that FNB Commercial Property called a reduction mainly as a result of benign inflation and no particular cost pressures in the medium-term. Being wrong in these times is not unforgivable as the SARB had to choose conservatism in the light of Ratings gloom.

Last Friday’s negative watch by S&P was a case in point and reading the IMF’s urgency this week leaves no room for doubt as to content and speed of the reforms required to spur growth. We are headed for a fiscal cliff if we don’t cut debt. In my last blog I said SAA was a dry run for Eskom.

In the manner it’s turning out, I am left a little bemused. A salary increase of 5.9% with a promise of the 8% if the specially appointed consultant can find the necessary cost reductions, is half-pregnant. On the other hand, Solidarity’s serving papers for business rescue still need to be responded to by the government. I would be amazed politically if they succeed but commercially, I cannot see any other option than to shut SAA down. “Half-pregnant” is that feeling you get when increases are being given and business rescue to avoid total collapse, is imperative.

Durban, my ex-favourite city, is lifting off. I believe it’s the warm water. FNB believes semi-gration has now moved eastwards; maybe we call it “easti-gration” ☺. Cape Town has had its time but now Durban is the new playground of Gauteng. Spurred on by the easier access of the airport and the new beachfront promenade, property prices may outperform the country. FNB’s Commercial Property Insights of 20 November 2019, talk to the point and even if they’re half-right, residential property will follow commercial property as people are employed. Hold thumbs, every region could do with a lift!

And here’s a thought from ABSA to leave you a little perplexed. In their Homeowner Sentiment Index, 23 October 2019, they have this to say:

Positive sentiment regarding conditions in the South African residential property market was somewhat lower in the third quarter of 2019 compared with the second quarter, despite a cut in lending rates in late July and a rebound in economic growth in the second quarter after a contraction in the first quarter.

To be honest, I’d take anything that started off with “positive sentiment” but it’s a bit of a downer to read that it’s “lower”. I’m feeling more and more that 2019 will be a year of highs and lows. The net result of that is the old story of the half-full glass. Half-full or half-empty? Always the question, the answer of which is loaded with insight and meaning. With it comes the issue of what I can control and what is out of my hands. When I read today that Donald has signed a pro-protesters Bill into law that commits the USA to support the Hong Kong protesters, what am I to do with the fact that it has made China raving mad?

I mean let’s face it, you or I are victims or benefactors in such a global play. All we can really do is decide if it might affect us and how, and then determine to drive our businesses like an upswing is coming until we feel ourselves lifting with the tide. HLJ encourages you. We swim in the same sea and fish in the same ponds.

We have feelings of euphoria and discouragement just like you. But we remain committed to honest, hard-working success and want you to experience that as well.

Have a Kulula moment and fly!

Yours in Property