a mixed bag

A MIXED BAG

We celebrate Spring Day on 1 September 2019. But really Winter is from Friday, 21 June to 23 September. From the 23rd, our nights begin to shorten and our days lengthen. Nature comes alive and I wish I could send you some of the pictures and videos that I have received. You can Google the Cape flowers and feast your eyes.

Bottom line, sunshine raises our spirits and gets us out of bed earlier in the morning. We know the property market also adjusts upwards seasonally from October to early December, literally like night follows day. Enjoy the Sales!

With this brightness in mind, we cover a few excerpts of articles that are really interesting.

#ImStaying has hit the ground running with 330000 members and growing. In a Businesstech article dated 30 September 2019, #ImStaying is Spreading, 5 reasons were given for people not leaving the country:

Popular for reasons for staying include:

 

  • Diversity – A number of people on the group praised the country’s diversity – including South Africa’s multilingualism and the fact that people of different races are living side-by-side after years of apartheid. Commenters also praised the ‘mish-mash’ of cultures which makes the country unlike anywhere else in the world.
  • Family – A number of commenters indicated that they intend to stay in the country due to strong familial ties. Many posters indicated that they also have an ‘extended’ family including friends, colleagues, and employees who make them want to stay.
  • Quality of life – A large number of posters indicated that South Africa has some of the best weather and landscapes in the world. People also praised the general quality of life including friendly people, food culture, and the activities available to them.
  • Career – A number of people indicated that they remained in the country due to their jobs. Some posters indicated that they were proud to contribute to the economy, while others said that they received great personal satisfaction from their work.
  • Natural beauty – people also love South Africa’s natural beauty, including the beaches, mountains, and the many game reserves full of wildlife. The country is also being praised as having the perfect weather.

The page has garnered significant traction on social media and currently has over 330,000 members as of Monday (30 September).

The first reason is my best. The South African national motto is:

!ke e: / xarra //ke
Written in the Khoisan language of the /Xam people and literally means, Diverse People Unite. It calls upon each individual’s effort to harness the unity between thought and action and ourselves. Our old motto was, Unity is Strength. How the two make much sense for a united South Africa. I often hear that what unites us is greater than what divides us – we long for that to dawn on each of our people.

Last time I wrote I said,

“…next time you’re at the braai, think about tossing in just one morsel of Hope to the conversation…

Above are five good reasons to remain in South Africa and be part of the solution.

Our President has started a weekly newsletter to the nation. That’s going to be interesting. I like the fact that he is positive whilst being a realist. That must be a tough ask after the weekend NEC at which Tito Mboweni, our Finance Minister, tabled his latest economic turnaround plan. However, Businesstech today [30 September] in an article, What you need to know about the state of South Africa: Ramaphosa, quoted him:


“Concerns are real. This year, the economy will record growth that is lower than expected (and much lower than what we need). Government finances are stretched about as far as they can go, and several industries are looking at retrenching workers.”

Ramaphosa added that much of the country’s confidence has dissipated as the reality of the country’s problems become clearer.

“This confidence was born out of the hope that we would quickly undo the damage that was done over a number of years. Implementing change does take time,” he said.

In isolation, that’s an understatement. However, he is telling us that changing things takes time. The pace of change is too slow for the Goodies and too fast for the Baddies. I guess we need to be grateful that so much is happening [Google JP Landman’s articles if you want a list of all that’s taking place since the beginning of 2019], and have the patience that a Constitutional democracy demands. One thing to mention is Justice Minister, Ronald Lamola’s, Special Tribunal which will fast-track the recovery of billions looted from the State which will commence its work on 1 October. Strength to your arms, Minister Lamola!

FNB’s Property Insights by John Loos dated 25 September 2019, gives us the data to support what many of us are feeling in the market. New Mortgage loans have declined by -7.82% qoq from 1st quarter 2018 to 2019. I don’t know the impact of the pipeline on this number but obviously it is affected by developments. I must guess that the construction and sales of these complexes are slowing down though, I must say, driving down Bryanston Avenue, Sandton last week, you could have fooled me. From R3-R12million it is wall-to-wall new complexes. Long may it last if we consider that the New Commercial Property Mortgage loans have declined by -29.6% in Q12019; that’s heavy. John expresses the hope that residential loans will begin “leveling out”. Staying with FNB’s Property Barometer, “emigration-driven sales”, prevalent in the higher end of the market, declined from 14.2% to 13.4% in Q22019. That’s good and in the right direction. Perhaps #ImStaying-type initiatives do have an impact – they sure beat negative news.

Allied to this news is an interesting turn which we trust becomes a lead indicator. Property24, quoting Dr Andrew Golding of Pam Golding, reports that time on the market is showing positive signs. We extract:


“The time to sell varies according to a number of factors which include: realistic pricing in the current market, desirability of location – namely high demand, sought-after centres and key hubs, as well as other macro-economic and socio-political impacts.

“Currently, we are finding that properties in the price bracket up to R4 million are selling at a median period between 34 and 43.5 days, while homes in the price band from R4 million to R6 million sell in 76.5 days, those from R6 million to R12 million at a median of 90 days, while those in the upper price brackets generally take somewhat longer to sell.”


I close with a statistical analysis from Standard Bank Property Research, Evolution of SA House Prices 1991 – 2018, dated 16 September 2019. That is a long period and the full article demands a read by those of us interested in things statistical. For the others [], here’s a summary.

Considering Household Disposable Income [what you have left after benefits and tax], Household Debt-to-Income [your proportion of debt repayments to your HDI], Prime rate, and Building Plans Passed, you have the possibility of affording a home. In fact, according to this research, 84% ofthe fundamental growth of SA house prices is due to the confluence of these indices. I would not argue with Standard Bank but I can’t help but wonder what the correlation would have been if they had used Business Confidence and plotted house prices to this index. Confidence, not money, buys houses – a simplistic statement but the absence of confidence makes buyers terribly skittish and sellers reluctant to face the new reality of the value of their houses. That said, this research was really good and over a very long period. Excellent thank you, Standard Bank!

A mixed bag indeed. But I can’t help think that, like the budding little White Stinkwood trees up the path to church this morning, there are green shoots beginning to appear. Maybe it’s the longer sunny days, maybe it’s Braai Day and the time spent with families, maybe it’s the Whale Festival and the hordes of visitors in town who were not disappointed. Or, maybe, it’s just Hope.

Two quotes to close:


Incredible change happens in your life when you decide to take control of what you do have power over instead of craving control over what you don’t.

– Steven Maraboli

And finally, the Arch:

I’m not an optimist, but I am a prisoner of Hope.


Yours in Property.

Jack Trevena

Jack Trevena

With over 30 years of experience in the banking and home loan industry, my hope it is share what I have learnt over the years with my blogging community, inspire conversation around the subject and in the process discover unique insights into this ever changing environment.
Jack Trevena

Latest posts by Jack Trevena (see all)