POLITICS INTERSECTS ECONOMICS

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So much to say really.

Many years ago I was on a train in Singapore speaking to a well-known local. Discussing the phenomenal success of that tiny island, I asked him what caused it. His answer: Political Leadership. For all my studies in economics, I nearly laughed at the idea. But he was right – in fact, spot on. The famous Lee Kuan Yew, the first Prime Minister from after independence in 1959 up to 1990 created the vision into which Singapore grew. The motto of Singapore is: Onward, Singapore, and anyone who has been there will know it has been “onward” for decades now. In Singapore, the best high school students are chosen in their final year for studies abroad. Sent to Yale, Oxford and the like, they are funded by government and then return to be employed in government, for the sake of the nation. Probably best known for its Changi Airport which wins “Best Airport” year after year, on any day you can see 800 ships in the Singapore harbour [not a typing error – 800!]. Measuring 50 by 27kms [I guess, from Joburg to Benoni and as wide], it boasts the 3rd richest GDP per capita in the world – >US$87762 [R1235400 per annum – also not a typing error at R14.20 to the $ today – and nearly the most productive Peoples on the earth!]. Clem Suntner pointed out in his High Road Low Road scenarios years ago that Singapore has no natural resources. In fact, they don’t even have fresh water on the island and import water from Malaysia and then export purified water back to them. So, to end this little section, Politicians drive economies WITH all the other players. Government’s role is to set the scene for successful, equitous business.

Enter Hilary and Donald. It amazes me that the great continent of North America could not deliver better opponents than these two. I will make no judgement other than that, in case I offend a strong proponent of either, but statistically I am accurate in what I say as all the polls indicate clearly that they are not liked and choosing between them at the polls is going to be solely “an act of duty to vote” for about half of everyone that votes. How scary is that? Never in history, two such un-liked candidates! But, they have a massive influence on what happens in our economy. What the winner does to our Rand is speculative at this stage. Some commentators indicate that Donald will collapse the US$ at least until America becomes “great” again. Hilary represents the status quo so probably little will change. So, I guess, if she wins we will be more “business as usual” and I sense she will be less likely to press The Big Red Button so that is comforting. However, I do sense that Donald would do some deals that put America in control of certain things again. Politicians do certainly drive the economy.

So how do politicians influence the economy? They drive the economic imperatives of a country. Heard of the National Development Plan [NDP]? For better or worse, it was the gift of Trevor Manual to SA Inc when he decided to spectate, I think, for a while. The NDP is a serious plan agreed to by all parties on- and off-shore for the manner in which we rally business, government, labour and even, societies in order to bring about Growth and alleviate Inequity in our country. Unfortunately, it is only referred to at the odd time when the international Press and role-players may be listening as the ANC is fighting battles completely introspectively. In all the “shenanigans”, [not my word], unfortunately, the Poor come off second-best and the rich go to Court. The tragedy in SA Inc is that we have a backlog of Inequity and every quarter we fail to make an economic difference, we pile the troubles on the heap. So now we have overtaken the Lost Generation of the 80/90’s with the Missing Middle of the 2000’s. Many willing people, side-lined by economic history, by the politicians, to the heaps of financial despair. Not your problem, you may say, but you are wrong. Your taxes are supposed to be raising the per-capita GDP [read Singapore above] by educating, keeping healthy and employing the peoples of this fair Land. When politicians are corrupted, populous and immoral, the Poor become poorer and the Rich, well, they just try to keep up with the declining Rand by investing offshore or not at all. I am a blue-dyed capitalist in case you wondered but in a fairy tale world, benevolent politicians and businessmen could make a huge difference. Singapore was a fishing village with a Centre of Trade mentality in the minds of its leaders – as a result, everybody won and many leaders became revered in their lifetimes.

For those of us confused by Economics, I often refer to it as E-comics or the Study of Graphs. Then, all you have to do is decide if the direction of the line on the graph is good or bad. Cost line rising = Bad; Profit line rising = Good, and so on. As I have said in a previous blog, I am not fazed by the current Real decline in housing prices. Affordability improvement will result if the Banks agree to keep lending on their current criteria. Some of the messaging coming from leading economists about the Rand after Pravin was charged by the NPA, I found very encouraging. It would seem that even a downgrade, would not radically affect the Rand. As much as S&P has warned that the “noise” of South African politics is very concerning, it would seem that if we can retain Treasury and the SARB as definitely independent, we could even ride that storm for the Rand. Heaven knows, that set of decisions rests squarely in the hands of Jacob Zuma. A reshuffle that affects those two men will be shocking; but, on the other hand, if he keeps things the way they are, we may be spared a downgrade [from 25 November 2016 onwards], just because we are seen to be a stable democracy. Knife edge stuff so just keep watching the graphs.

You may think I’m rambling, but I’m not. Facts are what they are but what you do with them is your world. There is a simple assertion called Locus of Control [LOC, for short]. An External LOC simply means that you see the world from outside in. An Internal LOC means that you see the world from inside out. Neither is right in the sense of personal morals or strengths but they have a fundamental effect on how you see and create your world. An external LOC deems that your circumstances influence your success. Bad circumstances – the economy, politicians, graphs going in the wrong directions, interest rates, relationships – influence you negatively. You are a product of your circumstances and you can do little about it. “Hou Moed” [Stay Strong”] is your mantra until things blow over and you are free to be successful again. And internal LOC takes the view that your circumstances need to be challenged. “I Can and Do” is your mantra as you keep your feet on the ground and reach for the stars. I mean, let’s face it in any given economic or political environment, there are those who prosper and those who fall. When the property market rises, estate agent numbers swell in pursuit of the “easy buck” and then, when things quieten, the numbers decline and the stalwarts remain. Not as strong financially as before but strong nonetheless. Hard work, positive self-expectancy and enthusiasm are energies. They define who we are in every circumstance and give meaning to:

  •          The fact that my hard work is habitual and necessary for success in anything, at any time.
  •           I expect that from what I sow, I will reap and that any Cause I pursue will have an Effect; the law is universal.
  •          The saying, “If you’re happy tell your face” drives enthusiasm.

To the last point, the Nobel Peace Laureates, Desmond Tutu and Dalai Lama, per Carte Blanche last night, have written a book called Joy. It simply speaks to how, despite the circumstances, you can remain Joyful. I can’t wait to read it as a supplement to the other Great Book from which I draw inspiration daily.

HLJ stands by to work with you, encourage you, assist you and build your business. It is not easy but for more than 13 years we have been doing it in every possible economy and under every kind of political leadership you can think of. We have survived and prospered in many circumstances and stand by to share our experiences with you.

Yours in Property.

SO WHAT’S YOUR PROBLEM?

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I have a daughter who is retarded. A combination of Downes Syndrome and Autism has made her different. She is beautiful, but can be unpredictable and hardly ever talks. We love her, plain and simple.

She lives for three weeks a month, in a private home in Vredenburg that cares for 52 other children [read: fully grown but retarded adults].

[Just a complete aside, it always interests me that we now have our daughter in a private facility. Many of us have private health care/security/creches/schools/hospitals/road accident insurance etc but to have a non-government subsidized, private home for the mentally challenged is quite new to me. This train of thought makes me wonder when Curro will launch its first private university. It currently has pre-primary, primary, secondary and A-levels so why wouldn’t it build a university? Monash from Melbourne, situated in Roodepoort, is fully private already so the idea is not new. And with some donor funds, Curro could do the unthinkable and house want-to-go-offshore university staff in a practically non-profit organisation. Very interesting thought even if I say so myself J]

Back to the train of thought…..

In her village is a man called Martin. He and I have got to talk and I must say, after leaving there, you realise Martin could be doing work anywhere and qualifying as “disadvantaged” from a BBBEE point of view. He is handsome, mature and smart but probably has a less obvious mental challenge somewhere. His Mom made an arrangement with the owner that she would build on a wing that she and her family would bequeath to the owner of the property upon their deaths. She has passed away already and left Martin to help care for his badly mentally and physically retarded sister who is wheelchair bound. Martin does that with care and concern, dedicated to seeing that his sister is clean and well fed every day. The story deepens as you look through his collages of photographs on the cupboards and walls of his bedroom. His Mom, sister and himself in happier times; his uncle, a Professor of things technological in Vancouver, Canada of whom he speaks with high praise and admiration; pets who have joined their journey from time to time. And little sayings……..one of which, on an old, worn plaque, that really caught my eye:

I may not be perfect but Jesus thinks I’m to die for!

If it resonates with your theology, mentalize it for future use. We all need encouragement sometimes. If it is contrary to your theology or absence thereof, please just bear with me so that I may make some points.

My first one is this: So what’s your problem? Martin doesn’t even see his situation as regrettable. He’s just too busy honoring the memory of his Mother by caring for his sister. And that mother, spare a thought for her – two children and both challenged. Her only consolation is that she could spend her last days in their home with them. Wow, how blessed are we to not be her! – so, what’s your problem? A little fat roll here or there, a tough business environment where Business Confidence has just dropped to its lowest in 30 years [1986 or thereabouts would have been the famous Rubicon Speech era], sales slowing, banks tightening, aches and pains of older age? What is it that so easily besets you and I? Martin has a view that in his imperfection he still has a higher cause, a reason to be and a job to do and I can tell you, he just does it unmurmuringly every time I see him. I marvel at him frankly, and he is certainly no spring chicken himself any more.

My second one: I unashamedly watch America’s Got Talent. Every season, every show, as much as I can. I see the epitome of human achievement. Like art, some of it I find unappealing but, also like art, some of it appeals to me in no uncertain terms. As a coach, I love to experience those, who in the beginning of the show, really believe “they have it” but really don’t. Old wrinkled people who feel stardom as the judges sensitively allow them their place in the sun, braggers who just try to be stars and quickly dim into ignominy. Then there’re those who start small and learn amazingly quickly, growing themselves into potential winners. One of them is Jon Dorenbos, the ex-NFL player now turned magician, who shared a little of his journey one night last week as he held me spellbound on up-close TV making cards rise out of a pack – I mean, HOW does he do it??. He has obviously bravely survived Adversity and found solace and strength in his ability. He said something I have taken to heart: Don’t listen to yourself; talk to yourself. Man that’s powerful! I’ve had the chance to watch some footage of the student protests [which probably gave rise to my Curro University idea[?]] and listened to my thoughts ie in my own head. No need to tell you what I was thinking about the abuse of my alma mater and other centres of tertiary learning. But then in came my son talking on WhatsApp with such sense and sensibility that I listened to a different narrative – indeed, a narrative of someone who seems to understand the long-view, who loves his country, wants to stay here to see it prosper and have his children here. Note, not because he has to, but because he wants to. You see, what he talks to himself is radically different to what I listened to in myself. Get my drift? Martin doesn’t even take the time to listen to negativity and neither does Mark – one challenged and the other completely normal; it makes no difference. The question is only: Are you listening to yourself or talking to yourself?

My third one: How would you feel if you were Pravin Gordhan? On 4 October, FIN24 quoted the Minister of Finance as saying to Bloomberg TV in New York, “ the police investigation against him is nothing but political mischief and will be resolved soon. Yesterday he gets informed on public TV, by the Director: NPA, that he is being charged with other co-accused for Fraud. In hearing it, he tells a Breakfast Meeting he can’t understand why this happens just before a most important mini-Budget.

Bravado? Challenging of the NPA? Or, simply the truth as best he wishes to understand it?

I’m reading a book in which CS Lewis is quoted as saying: Reason is the natural organ of truth; but imagination is the organ of meaning. Premised in his thinking is that stories can align reason with imagination and mind with emotions. If I’ve lost you, please forgive me but here is what I’m saying. As you think and give reason to matters and issues, you create truth which is your own truth. But that narrative in your head, does not become meaningful unless you begin to imagine it. You’re walking down an alley in the dark and suddenly, you hear a noise [Reason gives Truth]. Someone is following you, goose-flesh rises on your skin as your heart races and Adrenalin injects into action [Reason intersects Imagination]. You know you’re being followed and consider fight or flight [Imagination results in Emotion]……..and then the cat appears from the rubbish bin……….and you go on your way, sheepishly.

What is the narrative that is becoming your Reason? And how is your Reason fueling your Imagination? Is your imagination tending to Catastrophe? The psychologists have a term for this: Catastrophization [read: the tendency to believe and always express the very worst outcome from a particular set of circumstances]. You see, my son has the ability, even better than my own to be very honest, to not allow his Reason to develop a truth which leads his Imagination to drive his emotions; he’s not insensitive, just reasonably less emotional. You could say, he has high Emotional Intelligence in many areas. And what about Martin?

How’s yours today? If you were Pravin Gordhan in front of cameras, would you be sweating or just referring to what even moves the Rand, as “political mischief”. In doing so, would you have eased the tensions of thousands of Investors in SA Inc? What “mischief” is playing with your mind as you make it “your truth”, perhaps, in complete error?

There are so many stories you and I could tell. Stories of great courage in the face of insurmountable odds. Stories of people, teams, animals, and businesses, all of which have survived against the odds because of impeccable leadership, sometimes, your own leadership. You see, leaders “trade in Hope”. They reason their truth, imagine it through and despite that edge of goose-flesh, begin to lead with hope, care and confidence. More times than not, they overcome and live to tell the tale. Self-leadership is the genesis of all leadership so become and be the leader you wish to see in your circumstances. Nothing can take away your dignity; it is and will always only be yours to give away.

Homeloan Junction may not always get it right. But to the best of our ability, we commit ourselves to overcoming any odds, talking instead of listening to ourselves, and controlling our reasoned truth with a good dose of emotional maturity.

So, I ask in conclusion, what’s your problem? Lift your head and your eyes will follow to Hope.

Yours in Property.

THE LAST BIG THING

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I have a friend who uses the term: The Next Big Thing,  quite often. It intrigues me as a concept.

However, the Last Big Thing is what I’d like to discuss quite briefly today.

In our previous blog I surmised the possibility that rates, both here and in the USA would remain the same. They did. I wrote:

So we have Interest rates stable or well managed, Inflation hopefully will peak and decline a little and Employment will remain soft but stable. If that is true, then Affordability comes into play. You see, cost prices of houses are declining. Therefore loans-to-values will increase. Therefore there will be a few happier credit managers around the place prepared to take a better view of your customers’ mortgage application. Affordability will kick into play – all of the positive, easy-to-feel effects of a Consumer more capable of paying for houses whose prices have decreased. Now that’s good news.

I was correct on the rates so the question now remains whether affordability will improve over the medium-term. That we shall see.

But this matter of stable interest rates is certainly “the last big thing”. In the USA, it means that the Federal Reserve is concerned that should they raise the rates they may snuff out the growth they are enjoying. This is double-edged – on the one hand the cost of debt remains stable and historically low. But, on the other hand, it implies that the FED is concerned that growth is not vibrant and could be nipped in the bud.

As a result, the stock markets react quite negatively to the news. In fact, they rise when the oil price rises as historically, this has meant higher demand from industrialized nations. In the old economies, prior to Sub-Prime 2008-10, a rise in oil prices predicated a rise in interest rates as economies were growing and inflation needed to be tempered. These days, the oil price is driven more by Saudi Arabia deciding on production levels – at the moment these are creating an oversupply.

As regards rates, Quantitative Easing [QE] [read: printing money] is driving the interest rate discussion. In a recent article I read, in the USA $3trillion of QE has occurred and still the economy is sluggish. This is a quandary for the FED and hence the reticence to raise rates. Bear in mind that whilst we talk about America, there is hardly a leading nation that has not QE’d their way out of Sub-Prime. Some described Sub-Prime as a seismic shift at the time [as they have recently also described Brexit]. Fact is, it was, and the hangover still remains. One good thing for us is that the US$ is a little weak and so that helps us in our imported inflation, especially the cost of Oil.

So what does The Last Big Thing mean to us in South Africa?

  1. We can enjoy the respite of, at least, stable interest rates.
  2. We continue to enjoy relatively inexpensive fuel.
  3. Our inflation rate is under control.
  4. We allow ourselves a little headroom to accommodate our poor politics.
  5. We gain from commodity prices wherever these occur and enjoy coming off very low bases.
  6. It helps with further unemployment.

Downgrade risk aside, our real problem is the long-term effect of Zero growth. In my memory, I cannot remember when we have endured such a long period of <1% growth whether the higher rate of growth was organic to our economy or induced by the intervention of Financial Authorities. But in the meantime, volumes of homeloan sales are performing relatively well compared to last year whilst house price increases are slowing. My Affordability theory is therefore still possible. Not a bad place to be under the circumstances.

I guess, all said and done, it’s going to come down to our attitude, commitment and hard work. Homeloan Junction may understand the economic situation but refuses to comply with its rules. It reminds me, many years ago in Nedfin Bank we had a saying in recessionary times: “We have heard there’s a recession. We refuse to take part.” There isn’t a recession in South Africa but even if there was a sniff of it, Homeloan Junction refuses to take part.

Yours in Property

OVERTRADING

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Just to break from the usual property information as I did one blog ago, let’s talk about business and life.

Overtrading is not a well-known word for most people although, like Gearing, we often use it. It’s roots are in financial management so as bankers, we use it a lot. It applies to the tendency of a successful business to ramp up its turnover because it can and then fall over on cashflow. The reason is that increased turnover looks really good but increased debtors, stock and human resources bring about funding requirements that deplete facilities, and employees that require more cost and management focus. As a business partner of mine has explained often: “Businesses fail for two reasons, failure itself and success”.

The trick with business is to stage turnover increases according to available funds. In that way, you can bank an increase and then begin the process again once the stock and debtors have caught up. This staging enables the business to suss out the efficacy of the growth – is it fast enough, are our new debtors paying on time, are our stock suppliers happy and ready to support us with improved credit terms? There is so much to be said for staging increases in turnover. Perhaps the most important is facilities. Banks do not enjoy overtrading,  but they love cashflow [sometimes even more than profits]. You can arrange facilities in advance of, and more than, what is required. Having financial capacity from your own bank can avoid bad mistakes like having to pay investors in your business high interest rates because they know you need the money, and even worse, investors who demand shareholdings in the name of helping you grow. Such shareholding is very expensive in the long-run when a business is well-sold off the back of your hard work. It’s good to grow; it’s better to grow in proportion to your own funding requirements and resources.

But then, there is the Overtrading that is less described as such. In fact, I use some license with the term when I apply it to your personal circumstances. How does this work and what do we normally call it? Perhaps the most important question is what is its long-term impact on you and those you care about?

I attended a Mens’ Retreat and came upon the term: “Always On” guy. Know one…….. or two or three? In the front of the class with the perpetual response: “Pick me!” Always ready to say Yes and not willing to say No. Otherwise, always thinking up the “next big thing” and going for it. Not just going for it but fundamentally believing that he or she really can do it together with all the other things. We call it “personal bandwidth” and we think it is infinite as long as we’re “going for it”. Distraction and lack of focus are not terms in our vocabulary. We are excited by the hunt and determined to win for reasons we best understand – because we can, gotta stop the competition, need to leave something for the kids, have to make people happy, grow while the opportunity is there, more money is better than less money and retire young. So many reasons and sometimes, just our own innate drive and desire to achieve.

If you recognise yourself somewhere in the description, here is some advice for you:

1. FOCUS: In his book, Essentialism, Greg McKeown quotes the poet, Mary Olivier when she asks: 

“What is it you plan to do
With your one wild and precious life?”

In a hard read, he continues to force the issue of being an Essentialist. In becoming so, you do that one thing. It’s big and it’s challenging but it is the thing you have decided to do often, to the exclusion of many other things. The result is clean, uncluttered, directed, relatively calm Focus and Execution. At the heart of his treatise is that “you choose to do” one thing, and are not driven by “you have to do” many things for many reasons.

It is unarguably sensible.

2. PRIORITISE:

If you are a mere mortal like I am, the notion of “only one thing” may escape you.  There is so much to do and so many opportunities to grasp that you become busy. Really busy! “Rat Race” often slips off the tongue for those trapped in “doing”. If you identify, then do yourself at least half a favour and begin to prioritise your activities. Simple questions like: What must I do? What would I like to do? What can I do whilst I delegate to another who I manage? What makes sense to prioritise given limited resources [including, my time]? All valid questions that redirect thinking and therefore actions. I sometimes speak of de-complicating my life – taking all the things I must do, comparing them with what I want to do, finding the overlaps and then settling down to do as many as possible over time. Simplifying life and time.

3. PURPOSE:

Allied to the above, is purpose. In defining it, a sense of purpose becomes the mirror against which every opportunity is reflected. I often think of it as the white barriers on either side of a horse racecourse. When I’m within my Purpose [read: personal life goal; the objective of my life; why I’m here…if you wish], I’m running on the track from the start line to the finish line. But if something comes along that demands my attention, I find myself, metaphorically speaking, over the barrier – you know, that area where the cars park and the catering tents are pitched. Definitely no distinct course of direction, lots of obstacles and distractions; bad going at best. Found yourself there? Out of purpose doing stuff you were not made for? I suggest to you, that the time you take to discover your purpose will save you years of your life “over the white barrier”.

4. TIME MANAGEMENT:

No good blog on personal overtrading would be replete without mentioning time management. Think of this: we have diaries that ding when we have an appointment, Suri and My Google which tell you when to leave and which way to go, anniversary/birthday/special day reminders, instant internet access to global sites, all in the palm of our hands. But, but, we can’t manage our time. Bottom line, you can’t blame the tool, you can’t blame others so you must be to blame; soree for you. Jack Welsh said: “Take control of our life or someone else will”. No truer word has been spoken. I listened to Cape Talk the other day and they were talking about Money vs Time. It was very interesting to hear the heart-warming stories about Time and how people had changed their lifestyle and income to have more of it. I heard no one call in to say, “Get a life, money is more than important!” However, truth is the majority of those I know de facto, choose Money. Manage your time, or your time will manage you.

Serious stuff, you may say. But really, just consider the consequences. Focus on everything is focussed on nothing. Something gives – your relationships, your health, your finances, your sense of wellbeing – something gives. In his book, First Things First, the late Stephen Covey talks about what’s Urgent vs what’s Important. When everything is urgent – dropping the kids at school, being up to date on your emails, social media – beware that you are not missing or missing out on what’s important. Often what’s important is long-term. Building character in your children is important and a mission-to-adulthood application. But nothing takes its place in the finished product. Is that email seriously more important than eyeballing your child when they come home from school!?

Failure comes in many forms. Sometimes you just fail and maybe it wasn’t you but the thing or project just wasn’t due to succeed. Other times, stretched on the “too much” rack, failure just drifts in and out as your focus reflects that of a happy bumble bee; flitting from one flower to the next in the hope that some pollen transfers. Success is Focus X Determination nine times out of ten. Be careful that you don’t really believe that if you do everything something will succeed – you may just be the reason why that is not the case. I’ll never forget that in my mind-map when I left the bank for entrepreneurship, I had 33 things to do. Of all of them, only 1 worked successfully for our benefit and we tried them all – do you have any idea how much work that took? Just think about it, are you the same?

Enough said. If you’re Overtrading in your business or personal space, think about it. If you continue, as most seem to do, realise the consequences. If you think you should reconsider, think about that and use one of the ways discussed above to re-focus on what you can do properly, what will give you maximum bang for your buck, and what demands your energy because you want to give it your all.

Homeloan Junction says to each of you: Strength to your Arm and much Success!

Yours in Property

CREDIT VOLUMES

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You know, I have been looking at the volumes of credit extension and am suitably impressed. Oh, you might say, that’s “glass half full” stuff. But you know the old story, if you “gave” me something a year ago or just after Nenegate, would I have taken it? A resounding, Yes!

So let’s dig a little deeper using ABSA’s Credit and Mortgage Advances Report as at end-August 2016 and the microcosm of ooba’s Origination Overview as at end-July 2016. Not entirely comparable, but good enough for us to make some points on growth in our industry.

Is the market declining? Yes it is. But if you took that feeling in your gut in December 2015 and as you watched the Rand/UKP exchange rate sail off into the sunset and turn just before R25, you will know what I’m referring to when I say, “I would take what we have now”.

According to ooba, their volume of applications is down 5.67% comparing the cumulative year-on-year [ie, Jan-July 2015 totals to the 2016 period] figures. In fairness, the rate of decrease has increased so that June 2016 compared with June 2015’s applications volume decrease is 17.87%. In round figures, the month of June 2016 is 18% less than the same time last year.

Now let’s look at ABSA’s analysis. You cannot compare the percentages as they are talking to Total Advances of lending but a few points relate to trends:

  • Growth in outstanding Secured credit balances for households showed a 3.1% growth up to end-July 2016. This number includes Instalment sales [read: car finance] which has negative growth. To that point, we know car sales and finance are declining rapidly.
  • Mortgage balance growth is rising 5.7% in July off 6% in June2016. This growth is after taking into account any capital injections into bonds and any increased payments. But it would also include any non-payment of mortgages but frankly, I don’t think the banks are  bleeding in this area at this stage compared with normal default ratios.
  • The great eye-opener is Unsecured lending. Growth per annum between 2010 and 2013 peaked as high as 30% but since then, it has plummeted through 0% to about -8% to date. The unsecured lenders are also experiencing dramatic bad debt levels as the consumers try to repay their personal loans.

Given the figures of ooba and the advances growth of Mortgage balances, if you had said to me that’s it for July in January 2016, I’m still telling you, I would have taken it. Not sure if you agree?

So where are we at? South Africa is not accustomed to long periods of 0% growth in the economy.  There is really no excuse. Of course it’s better than negative growth and hugely better than the gut-wrenching collapse of 2008-2010, the infamous Sub-Prime Crisis [for which, to the best of my knowledge, no one has been prosecuted – given that the rip-off took place inside the law!]. But no-growth is akin to oxygen deprivation – you don’t feel it initially but it slowly takes hold and weakens you. We have just had a 3.2% growth reported and what an injection of fresh clean air! Don’t hold your breath though, we’re told, as it was just a statistical aberration. And some good news is coming out of China recently. Just for it’s size and perception of good news, that is good news. Another good news element is the fact that the National Credit Regulator’s enhanced credit criteria are curbing reckless lending to the point that only responsible lending to sustainably employed people can occur. Very good news for the consumers but then you just need to watch for rogue lenders cropping up again.

It is true that only Politics now bedevils the economy. Affecting Confidence we know is a hammer blow to growth. It saddens me that the sale of Tekkietown to Steinhoff, as one example, now has its expansion plans in Poland. This is great for the shareholders, but what a tragedy for South Africa and Southern Africa. What a powerhouse we fly over to do business in a business-friendly, fast-growing economy!

All that said, growth is growth and we’ll take it at any level. And it seems USA will not be raising its interest rates too soon. We’ll take that as well.

A closing point really close to home. Homeloan Junction’s performance has been beating the trends. If you look at August-on-August, applications have dropped by 3. You read right, just 3 applications. And then, if you look at July 2016 to August 2016, applications, coming out of Winter, increased by 75. That is really good and a testimony to the whole team who are putting heart and soul into their work effort. Very well done!!

We include this information only to say: It can be done! If you internalise, or the popular word, “mentalise”, everything you hear or read, you may be convinced you don’t have a chance. The day you are, you don’t. Henry Ford again to remind us: “If you think you can or you think you can’t, you’re right.” Always remain positive and determined to succeed. Things could have been catastrophic and they have not been. Let’s trust the market can take any other shocks that may be thrown at us this year.

Yours in Property

RELATIONAL AFFINITY

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The news of Pravin, made me think that it’s time to write about something different.

The other day, we walked past our neighbour who had just pulled into her driveway. She had a passenger [Sue, for sake of this blog] with her who climbed out the car and proceeded to greet us, “Hello, I know your Aunt Joan [for sake of this blog] who lived in Barberton.” We chatted, got friendly, proceeded to go out on the Friday night Art Walk – we do this on the first Friday of every month in Hermanus J – , enjoyed a super supper afterwards and then visited twice in the remaining long weekend. And now, we’re well acquainted and my wife stays in touch with Sue.

What happened? A casual encounter with a stranger turns into multiple visits and maybe a good friendship. Why would a stranger become such a quick, close acquaintance?

Sue happens to have a great personality so that could explain something. Joan happens to be a favourite Aunt of mine. My father spent a lot of time in Barberton in his youth so I’ve heard lots of stories and been there often. So could it be that a relationship triangle was forged and forged immediately. Given that it was weekend, we had the time to further the link and from that came a pleasant interaction and friendship.

Interesting that you could probably think of many similar examples in your own experience. So let’s have a look at the subject of this blog: Relational Affinity. Affinity simply means “a natural liking for someone or something”. Relational means “the way in which two or more people or things are connected”. So Relational Affinity means “a natural liking for someone with whom you are connected”. Sounds so simple that it begs a, “So what”!

But let’s dig a little deeper………

When last did you do a deal with someone and the deal just seemed to flow? Was this perhaps a combination of obvious things like Cash, Intent etc or, could it also have been that you liked the person and they liked you. Every day we meet with people but don’t actually sense Relational Affinity so what is different or, how do we bring it about? Here are some pointers:

BE YOURSELF: There is nothing more false than a false person. Glamour, chic, and accentuation, whatever – if it’s false, it’s recognised almost immediately. You have been born and, like the rest of us, you have become a product of Nature and Nurture. Nature, the DNA of your parents. Sorry for you, you gain weight like your Mom and have your Dad’s eyes. If not, you have your Aunt Agatha’s hair. You simply can’t ignore your genes in who you are. Nurture is different. It is the foundation of what you have been shown, taught and have experienced over the years. Even to the point, that the way you have thought about yourself has moulded you into what you are. Some would say you are the sum total of the all the thoughts you have had and all the choices you have made. So being “Yourself” is quite a complex thing to be. But without it, falsehood can creep into the way you relate. Think about it, reflect and then, almost on a daily basis, decide to be self-aware (and include the impact you have on others), as you step out into the day.

SEEK COMMONALITY: Did you know that finger prints are copied exactly but compared using spot checks? When finger prints are taken, your digit is pressed into ink and then pressed carefully onto paper from which a digital record is taken, a foto or a scan. However, when someone is trying to identify you, they don’t scan every crevasse and ridge of your finger print, but rather seek about 60 points from the fingerprint you have and the one they seek. The same happens in your brain when you recognise someone’s face. You do not memorise every feature and, in any case, features change over time so remembering all of them would be futile. All your memory does is remember key points (dots in the “fingerprint”) and then join the dots. That’s why you will say, “She looks like so and so”. Some of the dots align but it’s not the same person.

So what are the dots you can join for Relational Affinity to occur? Dots of age, profession, family, sports, friendships – all of these to find the affinity between you and another person which is common and which could spark a relationship to mutual benefit. We talk about the “common touch” when we refer to someone who relates well to people. For instance, Teddy Roosevelt, the US President during WW2, knew the names and family details of every 168 staffers in the White House. Indeed, like common sense, “common touch” may not be so common. But it can be acquired.

ASK QUESTIONS, THEN LISTEN: If you read the famous book by Dale Carnegie, How to Win Friends and Influence People, he writes about the power of questions. In all the types of Coaching, powerful questions come to the fore. The effort is not to know it all and tell the client your best advice, but rather to allow them to think through the issues under discussion. Open and closed questions, probing and clarifying questions and the great one, reflective questions, are all powerful means to unlock possibility thinking, problem-solving creativity and solution-orientated action in and for a client. Carnegie’s aspersion is that questions show interest and spark conversation. Ever sat and listened to someone tell you about themselves the whole night? Have you “done it” to someone? – I have, unfortunately! The antidote for self-absorption is questions. “How are you?”, “Where did you go to school?”, “What are you looking for in a house?” and FNB”s “How may we help you?” are all probing questions that can unlock the client’s meaning and needs and create Relational Affinity. Answered as “That’s a good idea”, “I like that as well”, “Oh, I also went to school in the Eastern Cape” are the kinds of responses that create Commonality.

Ah, then the power of LISTENING! Your Mom tell you that God gave you two ears and one mouth for a reason? If you want to create Relational Affinity as opposed to a Sounding Board (which we all need at times), then listen. Not just with your ears but with your whole body and especially your head, your eyes, your torso, and your hands. Your head nods in affirmation, your eyes are the windows to your soul, your torso (read: “upper body”) moves forward when interested and sits back when you’re reflecting and, finally, your hands embrace, agree, and even reject. Together with your ears, the rest of your body language, as we like to call it, listens more than any attention you can ever pay. Make them all come together to mirror powerful Relational Affinity with your client.

INTERPERSONAL SKILL: How often do you reflect on your impact on other people? I’m selling a flat at the moment and I deal with a number of estate agents. Two come to mind. The one is a person I have known since 2002 and he is really a great guy – mannerly, knowledgeable, professional, and polite. I would love him to sell the unit. The other, I don’t know from a bar of soap. She works for a major group, she has the OTP but she’s direct, abrasive, officious and abrupt. She annoys me when I speak to her. She has never asked me one Relational Affinity question. Her conversation is about my flat and the OTP I have to sign. She’s in it for the money and from her own mouth “Will you sign this today. You know I’m relying on this sale this month.” What is my stance? – With an attitude like that, I’m hopeful the cash sale will go through quickly so that only the conveyancers need exchange communications as soon as possible. So, you say,”Who cares, she’s got the sale hasn’t she?”. “Sure”, is my answer, “But what happens when I want to invest again; would call her or the other guy?” And what about what we all know about, the cost of acquiring new business versus repeat business from existing clients? It’s really hard to be in the property business no matter what your discipline – selling, bonds, renting, maintenance – and always have to prospect new clients because your sales are transactional and not relational. And, finally, what would my lasting impression be of the major brand? Has she been an ambassador or a destroyer of value?

As sales people, our interpersonal skills are vital to our long-term success. Many of you reading this blog have built relationships over decades and they are flippin’ hard to break if I’m a new entrant. Think of this, the value of your personal brand, You Inc, is probably the sum total of your revenue generating capacity over the next 5 years. That’s right! – it’s measurable; all you need to decide on is what period you can still be economically active. And more importantly, you leave a mark on people. Your integrity, your smile, touch and gestures all add to your value of personal goodwill – not as a bank account, but as a person. I meet old Nedbankers in the Hermanus market that have added value to my life over many years and when I see them, I recognise that immediately. Another example, I’ve just had a dear friend stay with us for a break, and he reminded me of all the good times we have spent together in the trenches of Sales. That’s Relational Affinity of a very high order.

Reflect upon your impact on others. Practice your inter-personal skills.

There is so much more to say and I know the bookshelves are full of appropriate self-help books on similar topics. But think about it, recognise the way you build relationships that last and grow.

In closing, Relational Affinity means “a natural liking for someone with whom you are connected”. Just to say this, Homeloan Junctionappreciates you and holds your business close to its heart. That’s why we keep coming back with a smile and a desire to make your property experiences enjoyable.

 

Yours in Property

RENOVATE OR MOVE?

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Are you faced with the difficult choice of whether to renovate your existing home or to move into a new one? Here are some pointers to help you come to the best decision.

Not enough space?

There comes a time in a home when you start to notice you are running out of space.  You could be falling over clutter.  Your cupboards may be full to overflowing.  Maybe there is another child on the way, or a parent is moving in.  The teenagers could need a living room of their own; or more accurately you need a space to contain the mess the teenagers make!

Not the right space?

Perhaps the opposite is true.  Your children are moving out of the house and you no longer need as many bedrooms.  It would be lovely to make some of the rooms bigger or create a guest suite.  Perhaps now is the time to start an B&B venture and generate some income.

There are many reasons why you could be faced with this choice.  Whatever the reasons, there is much to take into consideration to arrive at a decision.

But I love my home!

For many the decision to move or renovate becomes an emotional decision. Despite it being one of the most important financial decisions one needs to make, the heart can rule the head.  The home you are in may have deep sentimental value for you.  You may want to avoid moving at all costs.

It can be helpful to place your emotions aside for a moment, and to consider all aspects before taking a leap of faith.

Determine the costs

A good place to start is to determine the current value of your property.   Take into consideration your bond amount, the area you are living in, the current trends.  You can compare your property to others in the area, or get an opinion from an estate agent.  There are many free calculators available online to assist the South African homeowner to determine the value of their property.

Now consider the costs of renovation.  This should include the materials and labour that will be needed as well as the fee for the building contractor.  Consider if you will use a designer or an architect, and make provision for the cost of drawing up plans and the approval of plans.  Once you have arrived at a figure, add on a further 10% as a contingency, standard practice for building projects.  A further loan may be the best way of financing this initiative.

The next step is to compare this cost with the cost of buying a new house.  Search the Internet, visit properties in areas you like, meet a few agents; establish how much you will need to pay for a new home. Take into account the costs involved such as transfer fees, deposit amounts, municipal rates and taxes, and the cost of moving.

Is the decision clearer?

Now that you have all the costs involved, you should be in a better position to make a decision.  Will the cost of your renovation mean that you over-capitalise on your current property?  If your home is already one of the nicest in the area, your future loan money may never be recouped.  If your home is in the lower bracket of properties in your area, renovation could make financial sense, and a further loan would be money well spent.

Still can’t decide?

It is not only finances that will determine whether you should move or renovate.  Now is the time to take other things into consideration.  You can do this by weighing up the pros of each option.  Something like this:

Pros of renovating:

  •       You love the neighbourhood
  • You are close to good schools
  • You would love to put your personal stamp on your property
  • You have a trustworthy contractor

Pros of moving:

  • You want to change location
  • You want to move to a different school catchment area
  • Renovation will overcapitalise on your house
  • Moving is less disruptive than living in a building site

On balance, for you, which of the two lists is more convincing?  You should now be in a good position to make a decision.

Can a further loan finance your renovation?

If you have decided that renovation is the way you want to go, you can finance your renovation through a further loan.  This will provide you with the capital you need to implement your changes.

Do what is right for you!

Choose the right option for you and your family.  It does not matter which choice you make; it must be the right choice for you.  And once you have made a choice, implement it.

Your home is your sanctuary.  Take a leap!

MUNEXIT?

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Never heard the word?

Well, BREXIT stands for: Will Britain exit the European Union? MUNEXIT stands for: Will the ANC exit the municipalities of Tshwane, Joburg and Port Elizabeth? One, or two, or all three and/or in any significant proportions?

The lovely thing about democracy is that you don’t know. Many polls have seen the DA and the ANC neck-and-neck but, like the polls that had the world on a high 48 hours before BREXIT, they could be wrong. Then, of course, even before the result, we have the political commentators talking about who would be good bedfellows – the ANC and the EFF, the EFF and the DA or the DA and other smaller parties etc, etc. Finally, there is the talk of the smaller parties falling away from the South African political landscape as the larger parties warn voters that a vote for “small party” means they could not have enough to get into Council but the ANC could have one more proportional vote for their candidates.

Politics is not boring and one thing we know, this is the most important election since 1994 and probably the forerunner of a few “most important elections” to come. The reason? The ANC is fractured and caught between reason and the President – it’s centre, so critical to political power in any party, is cracking. No attempt to heal the rift has been successful and they are now dependent on a massive show of support in Gauteng even as I write.

On 31 December last year, Clem Sunter gave us 10 Flags to watch this year. A number have been playing out in global economics and politics. Very interesting that BREXIT wasn’t mentioned but SA Elections 2016 was. Here are the Flags and I’m sure, in no particular order of importance:

  1. The oil price [into the $30’s, back to $50 and now early $40’s [and I read to day the mega-oil companies are making mega-losses whilst the over-supply continues]
  2. Global temperatures, floods and droughts [we have not been left unscathed]
  3. The US Federal Reserve Bank [read: “US interest rates”]
  4. The Chinese economy [who could ever forget those January collapses in the Chinese stock market where falls were faster that the “close the market” stop-losses could trigger in?
  5. The war in Syria [Europe has changed for many, for ever]
  6. Vladimir Putin [“Mr Putin is a strong leader who wants to restore the superpower status”]
  7. The American presidential election [Donald is chosen but Ted Cruz won’t even endorse him and Hilary may be sanctioned before she even has a chance to run – amazing]
  8. A global pandemic [the Vika virus hasn’t just concerned the Pro golfers and antibiotics failed to heal a person in the USA this year – all’s gone very quiet]
  9. The municipal elections in South Africa [THE FULL STORY IS RETAINED, FYI]

“The results of these elections will indicate to what extent all the controversies of 2015 have affected the popularity of the ruling party and its leadership. The flag is not just about the percentage of the votes that each party receives, but the total turn-out too in terms of judging the outcome of the next general election. Meanwhile, the Rand/Dollar exchange rate remains the best indicator of the world’s take on developments in South Africa: whether we are consolidating our position in the Premier League of nations or meandering downhill into the Second Division.”

So there you have it, little ol’ SA gets into the List of 10 once again. We certainly do always box above our weight!

The one thing we cannot do is debate the stats when it comes to well-run municipalities. The DA runs the greater majority of them in the Top 10. More importantly for this blog, is what happens in well-run municipalities is that property prices rise. In fact, I would stick my neck out and say they rise at a level greater than the national rate over the long-term – that’s a dead cert in Cape Town. Probably the reason is simply that people want to live there and are prepared to “pay up” to do that.

That said, the most recent [June 2016] House Price Indices of the banks have been an interesting read:

  • According to ABSA, the Middle segment has shown the most resilient growth dropping from 6% in February to 4.9% in June 2016. Overall house price growth so far this year has been 5.7% and points to a negative growth of between 2 and 2.5% in Real house price growth for the year.
  • FNB remains quite positive. “…….little cause for concern at levels of financial stress” is the way John Loos expresses his introductory remarks in his Mortgage Barometer of 19 July 2016. However, he goes on to say that their Household Debt Service Ratio is “under pressure”.
  • Standard Bank is somewhat of an outlier but one needs to bear in mind the different ways banks measure house prices. They record house price increases at 7.3% due to the fact that credit extension by the banks remained robust for longer than expected.

A recent report from Homeloan Junction shows that volumes of Applications for bonds have remained resilient and even better than last year. That’s an excellent statistic and well done to the Team! 

 

So, why the interlude around the house market and its prices? People like to live in safe, clean environments. They like their kids to go to school in well-run establishments and when sick, to be cared for in sanitized, proficient hospitals. Doesn’t that sound like you and I? It’s true as well that the only way we can influence the current status of these facilities, is by using our vote. Never mind the conjecture about the ANC, the DA, the EFF and the Small parties, all we can do is put our “X” where our conscience leads us. What an act of utter individualism, what personal power with responsibility. Once every 4-5 years, we get to change the world; well, at least the one in which we live. How fascinating the process and how knife-edge it has become for some leaders!

May 3 August 2016 ushers in the local government we deserve as citizens of this beautiful, tortured country. May White and Black, Coloured and Indian, every valid citizen, go to the Polls en masse and vote with reason and conviction. No greater truth exists than that property is more valuable in well-managed municipalities. And the choice of who manages our towns and our Provinces is solelydriven by our vote.

As for the process and the outcome, we will know by next weekend how things have gone. What then follows is anybody’s guess. But, to return to Clem’s 10 Flags blog, a closing thought for you, our friends in property:

“If you are a pocket of excellence, you will thrive irrespective of how 2016 pans out and which scenario is in play. Foxes adapt and win!”

Yours in Property.

Jack

BREXIT OR BREAKIT?

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Today’s blog is not scientific and will refer to little of the volumes that have been written on the subject of BREXIT. It’s just from the heart and a view of many things.

This much we do know – little of major significance in the world does not affect us on the Southern tip of Africa sooner or later and BREXIT is of major significance.

When last did you see the British Pound in the R18’s?

When last did a UKP asset like INTU [the Earls Court redevelopment] drop R17?

When last did the Pound not behave as a Rand hedge?

Well, the answer is when Britain decided to regain its independence.

I guess David Cameron will be known as the Referendum Prime Minister. Scotland decides to stay in the UK convinced that England would remain. Then the UK vote with a massive Scottish “remain” vote and the “leaves” outgun the “remains” by 1 million votes. Democracy has her day and the Scottish now want to re-vote for their independence and ties with the Europeans. What a see-saw!

Richard Branson admits his wealth collapsed by one third. Every property bought by South Africans over the past few years drops in value. Threats of recession, succession, and procession abound. Party leaders resign, and the world markets collapse. Big “remain” activists like Boris Johnson retract from the Conservative’s leadership race and, wait for it, the leader to be announced on 9 September 2016 will probably be a woman – watch out the Falklands, here comes Maggie Thatcher the Second. I think it’s going to take a woman to give effect to the succession from the EU – firm, fair, determined, iron fist in a velvet glove and most of all, charming, disarming and intelligent – great trade deals without the encumbrances of the European Parliament which has been costing billions of UK Pounds per annum.

So why does this entire hullabaloo affect us here?

First, it creates uncertainty which rattles the markets and stalls investments. Nobody likes uncertainty and the sense of being out of control. That’s the reason the markets collapse so dramatically in the face of a seismic [heard the word recently?] event. If the future is not seen as what it was, the market isn’t going to be what it was. Only those shorting currencies and stocks like volatility; the rest of us mere mortals want to know our pensions are safe. One reason why SA is so affected, or, affected like the others, is because we are so damn good – our communications, share trading, competencies and connections – both people and systems – are world class. In addition, we have limited foreign exchange controls so money moves freely and without cost, only controlled by exchange rate fluctuations. In many respects we remain a free market and that wins us many accolades. So certainty isn’t certain when you box with the world money flows.

Secondly, attention moves from Emerging to Developed markets. Developed markets, like your real, big brother, are the authors of knowledge, stability, reason and rational democracy. The biggest joke for me are those people who confess to voting “leave” just so that their leaders understood that there were some real issues with Britain and EU. Goodness me, how can you toy with the rest of the nation and think that your resistance vote would be lost to history – what a shock when you find the next morning that 16m other people actually wanted to succeed from Europe and didn’t care what the world thought of it! So, another Developed market causes eruptions to the common Man across the world. As if sub-Prime was not enough, we now have England threatening recession, according to some. And on the other side of the Atlantic, Donald Trump is taking on more and more meaning to the common Man of America. Love him or hate him, he has read a sense of nationalism and dis-integration in her people that he has harvested for the right to lead the Republicans into this year’s elections. One more Developed country is looking shaky to its core as her people grapple with “in” or “out” – this time, of the world. Then there are the Emergents – a big, little group of nations that are highly influential together in World affairs. Some of them, like Brazil, fast becoming a mess where there’s enough money and glamour to host an Olympics but not enough to kill the Vika virus. Then there’s Russia that seems to be flexing its muscles in many ways and directions. Great little nations economically, some of which are busting a gut to be good exporters to the Developed nations and many still succeeding to do so. To state the obvious for our beautiful Land, you really don’t want to be an Emergent country at this time and have a leadership that doesn’t have character and direction for the nation.

Thirdly, this too will pass. Let’s say that again: This too will pass. The markets have rebounded and taken stock of their over-reaction. To be specific, INTU has come back 10% in a week. This too will pass for South Africa and whilst we enjoy a little respite in the Rand/UKP exchange rate, it too will rise. Will Britain plunge the world economy into recession – no, I don’t think so. If the process of extricating itself from the EU takes two years, it could take 5 years. Five years to open up new opportunities, renegotiate new terms, save billions, have new countries come direct and avoid trade barriers. Can you really see London filled only with red-cheeked Londoners without the cosmopolitan hue of every other country’s populace walking in the streets? Can you really see London’s financial district being allowed to become a ghost town? I don’t want to sound trite, but England, with or without Scotland, will survive and prosper and recover her ability economically if she has lost anything anyway. What is important in all of this is that people understand the global village and our inter-connectedness as nations. Boundaries are the institution of countries and treaties, the right of people to move is nearly inviolate. South Africa has learned this lesson and will continue to learn it as long as Africa sees we have more to offer – good or bad, I prefer not to comment –  but will it continue to happen? Absolutely! Such is the British and European reality.

There is so much more to say. We will experience some discomfort but hopefully in our presently well-managed economy, the bad will be offset by some strengthening of the Rand and a lid put on the fuel price, for instance. But nothing can take our focus of the national imperative to create growth and jobs for our young people through good education and unrestricted opportunities.

Remember to control what you can and stop worrying about the rest – all the worry in the world could not reverse the BREXIT decision so put your head down, keep your eyes on the road to property sales and be all you can be; a role-model to those who know and respect you.

Yours in Property.

DOWN TO GRADES

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So what do we say, South Africa?

Against the backdrop of S&P’s “steady as she goes” decision, we have won a reprieve. That is until December 2016. Remember, we still have Fitch to come and if I was a rumour-monger, I would say they exited SA early this year in order to deliver bad news from afar.  But, that would be churlish as Rating agencies are particularly circumspect before they deliver judgements upon economies, especially those that result in sub-investment grade. As I recall we will have their decision within a month.

Who’ve we got to thank? Not Boland Bank but two institutions. The one is Pravin Gordhan and his Treasury team who must have done an amazing job in the past 6 months to avert a certain downgrade. Recovering from Nenegate, straight into Budget 2016/7, navigating Guptagate and all the speculation around it and then walking through the fire with the Hawks and their implication. What a feat for Treasury to whom we owe a debt of gratitude.

The other is Business. Thank goodness that in December 2015, they rallied around the change of mind about David van Rooyen and began what may prove to be the best Public Private Partnership [PPP] in our modern economic history. The teams that volunteered to work with government must have laid the ground for solid feedback on growth, labour and jobs to be positioned with S&P. Who knows but that in these early stages, we are not laying the foundation for progressive growth targets with the necessary compromise between Labour and Business so as to achieve meaningful employment in the balance of the year and beyond?

Of course, there were those of us [even me if I’m honest] that wondered if we could avoid the downgrade. On the back of Friday the 3rd’s news, many have said, “Well, we still have to get through December”. Let me tell you, if you had given me “stay as you are but prove yourself” as an outcome on Thursday, I would have taken it with both hands. We can face Fitch with new confidence and assuredness that we have the presentation, the evidence and the support to remain as is and work forward.

The great thing now is that we have a fighting chance. And we can come out on top. Many have referred to the Social Compact and this era could be the very galvanization that we need to find Government, Labour and Business around the table.

One thing we know is that we trade in Hope and its cousin, Confidence. With a market happily over 54000 and a Rand smilingly below R15, we have early stage Confidence. For you and I in the property industry, Confidence = Sales.

It’s a short, sweet note, this blog. Let’s hope Fitch is convinced we have the teams and mettle to improve and the wisdom to focus while we vote. Then they leave us “as is” to get on with being better by yearend. And with that decision made, that our market enjoys a fillip going into the 3rd quarter as we shrug off the negativity with a sense that all will be well.

Wishful thinking or Reality? Like Ford said: “If you think you can or you think you can’t, you’re right.” Let’s trust we’re going to surprise ourselves. And in any case, surprize yourself in the second half of 2016.

 

Yours in Property,

Jack Trevena