A DIFFERENT VIEW

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Sometimes it’s good to look further than your borders to gain a completely different view. 

EstateAgentTODAY is a leading site in Britain jam-packed with up-to-date news, articles and trends. I tribute this article to them entirely. Published late last year, it was sent to me by a friend. It is quite direct but also immensely challenging to those of us who may be “caught up” in this time. Bearing in mind, times have changed dramatically and, as it was written in good times, it seemed all the more compelling a read for us.

But there’s another reason why I’m writing about Britain’s property market; a sample of One, in fact. My friend moved about 3 months ago and had the idea, in terms of his Visa requirements and in order to supplement their income, to buy a guesthouse. They have investigated possibilities for a year and a half now and set off on 7 July 2020, as permitted by lockdown relaxations, to view 9 guesthouses in the south of England.

The problem, we might say, is who invests in a guesthouse in a time when no one is going on holiday or travelling for business? Well, my friend has, and he saved himself UKP55000 on the price and UKP15000 on Stamp Duty [UK’s transfer duty], making a total of R1500000 saving. The latter boon is a gift to UK Property from the government which uplifted Stamp Duty until March 2021, to encourage sales. He and his wife take occupation of their 5-star guesthouse in Torquay, Devon in September.

The point for me is this:

  • 9 guesthouses were viewed
  • 3 estate agents were involved in the viewings
  • 1 won and she had 3 viewings lined up in total.

So, in the midst of a crisis just like ours, 3 estate agents had a one-in-9 shot at a sale. The price was correctly discounted, and with all the risks and strangeness of a new country, a sale was made. Indeed, as the article says, “You eat what you kill.”

We trust you enjoy the challenging read…

The problem with estate agents is: Whinge. Moan. Lead quality. Crap market. Decision procrastination. Fee pressure. Bloody competitors. Especially Purplebricks. Brexit, of course, Brexit.

These are just some of the ‘reasons’ that UK estate agents give as explanations for their lack of listing performance. In morning meetings all across the country, an army of ‘LAOs’ (Listing Avoidance Officers) sing in unison: “The leads are rubbish. And no-one is making decisions.” The Royal Wedding, holidays, Christmas – the opportunities for side-stepping success are plentiful. And not forgetting the weather. Too hot. Too cold. Snow. Storms. The wrong kind of rain? Blah blah.

In my 35 years in sales, most of it in estate agency, these excuses have been nothing but consistent across multiple salespeople in numerous businesses and several sectors. Sound familiar? It’s as if mediocrity and apathy are somehow excused by such lamenting. If the excuse is good enough, you’ll slip off the hook and survive another month. And if your other sales team colleagues can be persuaded to employ similar abdication, too, then that helps a lot. Safety in numbers and all that.

Yet, every time I picked up the phone or saw a potential customer face-to-face, each opportunity to do business seemed rather more proper. And when I dug into the sales team’s call stats and pulled a few recordings and listened in, more often than not I noted the following issues:

  • No customer qualification
  • No USPs mentioned
  • No questions asked
  • No close attempted
  • No contact details taken for follow up

So-called weak leads dismissed as ‘not a real lead’ in order to not dilute conversion rates. No wonder. No wonder ‘the leads are crap’ when salespeople, very often, don’t treat leads as, well, leads. And in a business where millions are spent on marketing and portal costs, with the resulting CPL (cost per lead) up there in the hundreds of pounds, that’s sacrilege. Around a third of portal, leads aren’t even opened or responded to by agencies. Yet about half of buyer enquiries have a property to sell. Madness. And yet we moan that the portals are ‘too expensive’. Think about that again for a second. Yes, way too expensive if you don’t capitalise on them properly.

In other markets such as the US, agents don’t squander leads. Hell, they don’t really rely on ad-derived inbound leads much at all. In Australia, an agent there told me that two-thirds of his leads were self-generated. Indeed, every person they know and every person *they* know is a potential customer. Every home on the market in their area is a lead. Every past valuation appraisal is a lead. Every Facebook friend. Every LinkedIn contact. Every neighbour. Every viewer. Referrals and recommendations. And so on. And the fact is, all of these opportunities are free. CPA zero.

UK estate agents are lazy. There, I said it. In the main, they take orders but rarely prospect. They’re not salespeople they’re passive recipients – sat under big, expensive trees waiting for the fruit to drop, nicely ripened, directly into their soft, comfortable, complacent laps. I’ve written and spoken much about the unsustainable cost to an industry of big branch-based networks. The evidence is there for all to see. But our culture of goal-hanging for easy-win leads, waiting for those customers that offer themselves up with a pen in hand desperate to sign your sole agency agreement – that’s not a viable acquisition strategy either.

‘You eat what you kill’ is the mantra of the world’s hungriest, fittest salespeople. Go out, find it and drag it back to feast on. Rather than waiting for an elderly specimen to wander into camp and die of natural causes right in front of you. That’s a sure way for your family to starve. But that’s what UK agents do. Estate agency is changing. The unit economics dictate such. But not only will the fittest and the most pro-active survive, they’ll prosper too whilst the weak and the apathetic die out.

Great White or Dodo? Choose one. But if you continue to choose the latter, remember it was your choice. It is simply left to say, What about the Originators and Conveyancers? I guess exactly the same sales and relationship principles apply.

For all of us, DO GOOD AND BE GOOD AT WHAT YOU DO.

Yours in Property.

OUR ROLE

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Hi Everyone!

It’s probably 5 weeks since my last blog. It was titled Resilience and, as is so often the case, writing about something we all have but also something that we need to be reminded of from time to time, left me at a loss. Indeed, I found that a difficult blog to research and write and it took some doing for me. The next few weeks flew by and we experienced why they call this place the Cape of Storms. We’ve had two storms of a ferocity that we have not seen or felt in almost 6 years of being here. Eucalyptus trees uprooted, houses demolished, near misses of cars and homes as trees crushed into them and 270mm of rain this year thus far compared with 320mm in total last year.

No wonder the Cape of Storms has another name, the Cape of Good Hope. Life’s like that sometimes, hey? On the one hand, its storms and on the other like sitting here this morning in glorious, quiet sunlight [getting my vitamin D like the doctor said], its cause for hope and positivity. If you’ve seen the recent videos of Seapoint’s promenade battered by 10m waves and rivers of foam, you can imagine the early sailors arriving here terrified by the storms they had endured and then filled with hope as they moored in Table Bay in the lee of the Mountain. Little did they know it would become a landmark and one of the new 7 Natural Wonders of the World. We get to have it as part of our beautiful, tortured country.

In recent times, we have experienced a reduction in rates akin to the 1970’s and an inflation below the bottom of the SARB’s target range at 2%. In addition, and may I say unlike the sub-Prime crisis, the banks have stayed open for business. They are saying “Yes” to loan applications and that is adding to the “time to buy” that many people are experiencing.

If you have more than 10 years’ experience in the property industry, you have never lived through a time like this. I’m over-60 and been in financial services just about all of my working life, and I have never experienced anything like this. Despite global growth projected to reverse to -3% this year from +3% last year, our own growth from +0.5% to -6% this year and our unemployment increasing from 10 to 13m, we seem to have a buoyancy in our sales. I’m thrilled for every worker in this great industry who may, even tentatively, agree.

I have a few thoughts to offer some insight into this phenomenon:

  1. It could be as simple as a rebound from a long period of inactivity.
  2. It could be that people have done the sums at a 7.25% Prime and found bonds affordable for them.
  3. It could be that house prices have reduced significantly for two reasons. Firstly, there are desperate sales taking place in a scramble for cashflow. Secondly, realism over some time has resulted in house prices dropping in favour of buyers. There is a last niche issue and that is that people have finally decided to emigrate and they’re selling at their best price.

If I’m right on the first point, little did we expect that and grateful we are. No doubt. As regards the second, the SARB’s decision to drop the rate as a monetary tool was out of realisation that they must do so. One of the great learnings from sub-Prime was that the financial institutions must act early and decisively. Worldwide they did, and it worked; even to the seeming delight of the markets that have recovered on a whim of economic revival and any rumour of a vaccine. The last point above is probably correct because any reduction in price over time has been met with an increase in sales. What has really impressed me though is the speed with which a heightened level of confidence has returned. I look forward to banks’ research as to why this has happened.

All the above is based on solid feedback that the mortgage business, the real estate business and conveyancing has become busy again. The middle sector is still active in the lower end of market prices but compared to some of the negative press a while ago, we’ll take any good level of activity. I hear in Hermanus [read: along the coast] there has been a renewed interest in buying, however, the issue is that people still have to sell their current homes and that’s where the reality stalemates. Nevertheless, people want to buy, and others want to sell so we’ll take that!

A last point is that the Deeds offices are backlogged. There are millions of Rands of reggies locked up in their inability to fully staff and then stay open. I hope the floodgates open for so many cash-strapped businesses.

Homeloan Junction has been operating virtually but practically at full capacity throughout. In its belief that clients come first, service may have been difficult at times but nonetheless, it has been as good as it gets. Like you, we have endured and survived; grateful that the damage has been contained. We are faithful that it will continue and now just need the banks to regain their confidence and improve approval ratios. That may sound cheap talk, but their confidence means jobs are returning into the economy and everyone is a net-gainer.

How we appreciate you and your support! We depend on it for success and never underestimate all the effort you have put into our business. We trust you feel the same about us and what we have been able to deliver in these trying times.

So, to our title for this blog…

Our role? Twofold:

  • To continue to be the best estate agent, originator and conveyancer in your area. Trusted, competent and enthusiastic.
  • And, to encourage anyone who has allowed these times to dent their emotions. Be there, lift them and trade in hope for them.

Finally, I have not mentioned covid, corona, pandemic, etc in this blog. You could say I have avoided them like the plague but that may sound a bit corny ☺. How we hope that we quickly peak and begin the process to normality, however “new” that may be.

Yours in Property.

THE R-FACTOR

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We have many Factors.

Factors that contribute to things both good and bad, mathematical factors, a Factor Market in economics and the X-factor, that “extra” in extraordinary that help make people like Simon Cowell more famous along with his panellists and participants. But now we have the R-factor. To the best of my knowledge, it was coined in the British escapade against corona. It may also be an epidemiological [another word I have learnt to spell during lockdown] term. However, it has been used to represent the rate of growth of infections. Thus, >1, we are adding infections to yesterday’s number. At 1, we are remaining equal in the number of infections. At <1, we are reducing the number of infections daily.

So, if I look at #EskomSePush at 2 June 2020, I can see at 34,357 cases, an increase of 1,674 overnight, our R-factor is >1. By the way, it was amazingly clever to me that this little voluntary App, when it knew Eskom would be able to supply electricity when no big users were requiring it, switched over to the covid statistics in graphical form, so that we would continue to use the site as a GoTo while loadshedding was postponed.

But I want to use the “R” for something else. Last time I wrote about Contentment in lockdown. This time I want to explore Resilience, and its  Resilience-Factor which we’ll term, the R2-factor. My curiosity with this force is that I have observed and experienced many peoples’ ebb and flow with their own resilience in recent times.  I want to encourage us as I write.

Resilience is defined as: The capacity to recover quickly from difficulties. It comes from the Latin word resiliens which translates: “to rebound, recoil.”

In turn, Capacity is defined as: The ability or power to do or understand something.

In other words, Resilience could be expressed as: The ability or power to recover quickly from difficulties.

Amit Sood, MD, puts it in a way I really like: “Resilience is the core strength you use to lift the load of life.”

The initial definition seems to represent a capacity to and a speed of, recovery. My experience is that the R2-factor is a process and not a jump. It is a learned process which becomes a capacity at different levels for each of us in different situations. My sense as I watch it work out in peoples’ lives is that for some it is so mature and empowering that it has become a natural part of their character and, as a trait, becomes their ability to recover as quickly as possible from adversity of many kinds… in focus right now is Lockdown, and perhaps covid itself for some of us.

I believe it is what Nelson Mandela was talking about when he writes:

Do not judge me by my successes, judge me by how many times I fell down and got back up again.

Let’s peel an onion as we explore the R2-factor. The layers are:

Physical: All those years ago, watching Bruce Fordyce in the early morning winning the Comrades Marathon many times is imprinted on my memory. I tried my own marathon, the inaugural Nashua Marathon, in 1984. Still, with an occasional ache in my right thigh, my estimation of Bruce took on tangible admiration! Over and over, the commentator spoke about Bruce’s determination, his focus, his guts and his strategic competitiveness to win. If we just stopped here, you’d get the picture of the R2-factor in physical form.

Emotional: I have recently watched a family suffer the grief of losing a son and brother to a heart attack. I have watched them descend into grief and mourning with all the emotion that goes with it occasion by occasion. The emotion is often as visible as Physical resilience as it cuts etches in the faces of the grieving. I know, I was one of them. But I have also watched the R2-factor come into play and the same people come to grips with their pain felt for a loved one. Slowly but surely, they have each “lifted the load of life” to full capacity; pained but not broken.

Mental: If you’ve ever written an exam, accepted criticism from your boss, absorbed correction gracefully when you were wrongfully accused, or borne the pain of depression and rallied only to lapse back again – some normal life occurrences for many of us – then you have experienced the R2-factor. Sometimes this is a very personal and even invisible [to others] journey and other times you “wear your heart on your sleeve” and others notice “you’re down.” Voices pulsate in your mind and we know the prefrontal cortex becomes hectic to the point of headaches as we slash away at one thought after another like Attenborough through a jungle. Then, for reasons we will consider below, the mist begins to lift, the rationalisations take root and we begin to rebound from our crazy thoughts. Resilience may be evident on our face and in our posture, but it occurred invisibly in our mind.

Spiritual: If you read about Resilience, few people enter this space. Religion is out of bounds for political correctness. However, I cannot ignore that many of us have beliefs beyond ourselves. Our R2-factor is inextricably tied to our belief in God. But let’s not fool ourselves, as we have been saturated by corona in overloaded news both true and fake and seasoned by conspiracies, we may have experienced a crisis of faith at times. Nicky Gumble of Alpha fame, has  messages on YouTube entitled: Coronavirus: Where are you God?/Is there any hope?/God can you hear us?/Faith not fear. Surely, he has prepared these messages because he saw the need in the questions people asked him and he resolved to encourage Resilience.

The onion peeled, I come back to the pervading thought in my Contentment blog: Resilience, like character, is often refined in a crucible. Adversity, like we’re experiencing in this unprecedented way, can be the yeast of our R2-factor. In an excellent article by Faisal Hoque, a contributor to HuffPost, he says, “Resilient people develop a mental capacity that allows them to adapt with ease during adversity, bending like bamboo instead of breaking.” He continues, “I had to learn the art of resiliency to survive and then thrive.” Resilience is not like skipping – you’re up and down but always trying to avoid the sting of the rope. Rather, it’s like climbing a mountain one step at a time and at the top, enjoying the view.

I have often posed the question, Are you thriving or surviving? Or, it’s the latest version, Are you isolating or hibernating?

So, how do we develop the R2-factor?

Pages of theory abound but thank goodness, most of us have some resilience embedded in us to cope with what life throws our way. Shania Twain says, “Life unravels the way it does, and it has an effect on you, but you have to take responsibility for dealing with it.” Frankly, if you’ve coped with Subprime and got this far with covid, you’re already strong!

But here are some thoughts to increase our R2-factor:

Embrace Adversity

This always sounds so trite, so cliched. Our first response to adversity, which normally has an element of surprise anyway, is shock and horror. This can’t be happening…to me…this way…OhhMG! If I therefore have a point, and I’m implying that by making this the Number One builder of Resilience muscles, then you have to deal with the adversity with speed or, at least acknowledge it, as “here to stay”. I’d put to you that the speed with which you embrace adversity is a key indicator of your R2-factor. In fact, most of what I relate below is actually premised on the assumption that first and foremost, we have to embrace sudden change.

Control Everything and Nothing

To be more resilient:

Stop.
Think.
Act.

Stop. Doing what you’re doing. Is this matter in or out of your control? Control is that little matter that we all have that makes us feel proudly powerful. Let’s say the Oil price went up from $30 to $80, could you control that? At the moment it is creeping back up, probably a function of reduced supplies and the sense that the pandemic is moving off the list of global threats; did I control that? Of course not!

Think. Get over your shock and patiently think. Face the disruption head-on.

Act. Take one step in the direction of your uncertainty. Let me put this one incredibly simply. Last week I heard the fuel price was going to rise. Before I knew how much and when, I took my car out to fill up; R270 for a ¼ tank but at the cheapest price at which I’ll see Diesel for years. One step… you don’t need to know the future to enter it with circumspection.

Allied to this matter is Julian Rotter’s concept of Locus of Control. Some people, he says, view themselves as essentially in control of the good and bad things they experience — i.e., they have an internal locus of control. This internal locus allows us to create options and scenarios based on experience, the situation, and foresight. It allows us to create alternative plans in anticipation of, or amid adversity. An external Locus of Control simply means we bend with the storm. Circumstances hold our fate and we are incapable of influencing the opposition or its consequences. We sadly may become victims of our fate.

Mary O’Neill reminds us, “Who has not first tried to get out of a tough situation before truly dealing with it?”


Remember Past Successes

Little beats good experience. Did you survive subprime? Then I have confidence in you to survive covid. Success in dealing life builds flexibility and confidence. “If I could do it then, I can do it now”, I hear you say quietly but with a sense of the competence and skills it will take. In you lies GOLD – the resourcefulness, perseverance and willpower that it takes to grit your teeth and be resilient. You lean into the wind spurred by the knowledge that you may not have all the information, but you do have the scars. Success has been defined as: The ability to endure pain. If you’ve watched the recent RMB-sponsored SA Olympic Rowing team, you will understand this is not an exaggeration. A story of courage…on YouTube.

Sensitize Your Expectations

“Perfect” is great. “Enough” often suffices. I think that one of the secrets of thriving is not striving. Per Ardua Ad Astra, my school motto, has a ring to it. After all, By hard work, to the stars is a wonderful expectation. But hard work and obsession with perfection, are two different things. I’m sure in the recent SpaceEx launch, Elon Musk must have had a sense of such achievement as the two astronauts took off, flew for 19 hours and then safely docked with the ISS.

Awesome! But so often unless we set those kind of expectations and then pull them off, we become despondent and incapacitated. Elon Musk has been trying for decades to do what he has just done and wants to inhabit Mars in his lifetime. He may still. But he has tried and failed and disappointed more shareholders repeatedly than many other global CEO’s. 

I’m not suggesting you give up or lower your standards. But I am saying that you need to be sensitive to the unrealistic. Instead of motivating, un-realism can cripple the enterprise that lies within you. Just be sensitive and be kind – to others and to yourself. Remember the saying, Laugh at yourself? Just have one on you; it’s okay.

Look True North

There is a space and a direction to which each of us aspire. Be Yourself and live your dreams is really cute, but it implies that in your journey to the place you decide, with the values you espouse, with the mistakes and successes you manage, you keep looking forward and up. True North is scientific, but it was used by Stephen Covey in his books to be the niche of time, direction and integrity you decide for yourself. It is not self-centred; it is self-generated. It incorporates others from the closest to the furthest of the reach and range of your life. But when you find your True North, no other direction makes long-term sense for you. For some, like Elon, it is space exploration and Tesla to boot. For others it is being a good mother to your children and husband to your wife.

Live with Destiny

What is it that pulses in your veins? What gets you up and going in the morning? What points you at and through a problem? What causes you to celebrate with humility on the other side? What has driven you to put in a hard day’s work this lockdown even though your boss cannot watch you? What makes you better today, even though you may feel you failed dismally yesterday? Then, what makes you confident that SA will survive this pandemic? What makes you be part of that solution? What news do you listen to that encourages you to believe and go on intentionally?

Destiny and it’s bedfellows, Meaning and Purpose, is what does that for you and I. They make the difference between “have to” and “want to”. They lift your eyes, your innate sense of wholeness, wellness, and hope to press on. You see, Resilience comes from within. Whether it is physical, emotional, mental, or spiritual resilience, the R2-factor always has its genesis within you. Others may support but ultimately the power of how you react, what language you use, what you choose to do and for what reason, lies within you. Nothing like a sense of Destiny, creating monuments you may never see, drives you to look at and look through adversity. My level of R2-factor will always and only be in proportion to my sense of meaning in and to the world.

Harness Support

No man is an island, the saying goes. You don’t need lots of friends and family to feel supported. You may know many people, but you only need a few to really know you so that you have support. After the inner spirit of the Destiny above, why this need for others’ support? Because, if we have lived, we know there are times we need a friend. I’m not going to say more than this…to my dear Family and Friends, how grateful I am that you are there and that in the busyness of your life you make the time to know me. Patiently you listen, kindly you often speak, and always you encourage and motivate me. You are a huge part of my R2-factor.

The R2-factor – in Conclusion

There is so much more to say about our new-found factor, the R2-factor of Resilience. Perhaps Arthur Lynch captures its simplicity in these words:

The future seems a little gloomy! Go to bed early, sleep well, eat moderately at breakfast; the future looks brighter. The world’s outlook may not have changed, but our capacity for dealing with it has. Happiness, or unhappiness, depends to some extent on external conditions, but also, and in most cases chiefly, on our own physical and mental powers. Some people would be discontented in Paradise, others… are cheerful in a graveyard.

In my research for this blog, I came across a questionnaire about Resilience. You may find it interesting to complete for yourself…

A survey conducted by Everyday Health, in partnership with The Ohio State University, found that 83 percent of Americans believe they have high levels of emotional and mental resilience. In reality, only 57 percent scored as resilient. – https://www.everydayhealth.com/wellness/resilience/get-your-resilience-score 

It feels to me like lockdown is making way for normality. There is a huge amount of opening up and then hard work to recover completely. Many pundits put “years” to that timeline. Subprime did take 2 years [2008-2009] to reach the bottom, then 2 years [2010-2011] to recover but, from 2012 to Q12020, the developed world enjoyed significant prosperity across many countries even though the scars of some were still apparent going into covid.

We must believe that we will find our R2-factor as a nation. We will recover.

I finish with two quotes:

And once the storm is over, you won’t remember how you made it through, how you managed to survive. You won’t even be sure, whether the storm is really over. But one thing is certain. When you come out of the storm, you won’t be the same person who walked in. That’s what this storm’s all about.
Haruki Murakami


I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say. Part of being optimistic is keeping one’s head pointed toward the sun, one’s feet moving forward. There were many dark moments when my faith in humanity was sorely tested, but I would not and could not give myself up to despair. That way lays defeat.
Nelson Mandela

Yours in Property

CONTENTMENT IN LOCKDOWN

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Here I am “talking psychology” again.

Whenever I moan or listen to a moaner in these days of lockdown, I’m reminded of so many things. And between the moaners and myself, we have moaned a lot lately. Isn’t it funny “how things get you down” and you find yourself moaning? At that point in time, your moan almost helps you face the day and find perspective again. Are you moaning more than usual? It really is quite normal, you know, in times like these. So, give yourself a little break. Too much of anything is a bad though.

What do we moan about? Most of it is the present at this stage in the game. Limited freedom, too much TV and its news, all kinds of issues about government, and then there’s your spouse or the kids, and, of course, no ciggies or the cost of those “on the dark side”. Lots to moan about and even to worry about in the future as well. Has the Rand peaked out and when will it strengthen and by how much? Will Eskom keep the lights on? Will it appropriate its new increase to paying off its debt or just “waste the money”? Again! And that DG of WHO who purportedly cosied up to China who owns Africa in the latest conspiracy theory….on and on, my moaning justified by where I’m at, and all those nasty things happening to me…

But then there’s a thing called Contentment. Without Googling it, it’s that feeling we get when we have enough. Or, maybe it was a decision to accept that we have enough. In our modern world, enough is never enough – you’re getting “old” when finally, you come to the reality that maybe there is no more, and this is it. You have a nestegg and it’s about as big as its ever going to be. Maybe it’s not financial, maybe it’s emotional; the day you look in the mirror and decide “I’m okay”, in fact, I’m getting to like you. Self-acceptance slowly begins to overtake comparison. Perhaps it’s the day you realise you have peaked out in your career and whatever else you desired “at the top” has been reached and you watch some whizzkid overtake you…and you’re prepared to mentor her… Contentment is seldom sought after. It’s not glitzy, it’s not competitive, it’s not fashionable; in fact, it’s easier to see ambition and corporate ladder climbing than contentment.

Contentment, like character, is often refined in a crucible. Adversity, like we’re experiencing in this unprecedented way, can be the yeast of contentment. So, yes, we may moan and feel better for it, but until we realise this is not going away and it’s going to be okay, we will never enjoy contentment. I’m tuned in to a few friends who are my beacons in this time. Some have “lost it” and nothing makes them happy. We should jump to Level 2 immediately to avoid a bloodbath but if we did that, then why not just chuck Levels out and let’s get working again. Like a Trump moment. Others are philosophical – what will be will be. They rationalize the time they’re spending with the kids and enjoying watching them enjoy themselves and this too will pass and then we can go on a little break and spend some time walking the beach. Others are grateful the golf course has opened, and they can even play a four-ball again. Others are encouraging, humourous, and supportive. Recognise yourself in this splay of human reactions and thinking. I can see where I fit in.

But if we are ever are going to approach Contentment, then there will need to be a combination of thought and emotion. You see, contentment is learned; it comes naturally to very few of us. It is propagated by adversity. When everything is going well and you’re earning six-digit commission and the banks are saying “Yes” all the time and relationships are strawberry fields and puffy clouds….who needs contentment when it’s all so rosy? In those times, I am just content. But ruffle my feathers and annoy me and my contentment vanishes to be replaced by…well…lockdown ☹

It’s the very thing that takes away your sense of contentment that becomes the obvious thing to overcome in order to be content. I feel like writing that again. Let’s say you don’t believe me or that you think I’m being “holier than thou”. In your wisdom, you then throw in a tablespoon full of Worry. Now you’re on a roll…South Africa is on the brink. And if you think I’m staging this, I believe Dawie Roodt told Jeremy Maggs that this morning; my source is solid. Now your contentment isn’t, and your worry is.

Here’s where it gets really interesting. Daniel Goleman, the father of Emotional Intelligence [EI] speaks to this moment as follows:

The brain has two memory systems, one for ordinary facts and one for emotionally charged ones. Strong emotion can create neural static, sabotaging the ability of the prefrontal lobe to maintain working memory. That is why when we are emotionally upset, we say we “just can’t think straight”. Despite their intact intelligence, people in this state can make disastrous choices.

We’ve spoken about the prefrontal cortex [PFC] before. It’s about a credit card size right behind your forehead. It is the “stage” of all thinking. All the time you’re cognizant, thoughts, stimuli, reactions, actions and responses are flying through your head. They are like actors on the stage in the PFC and they enter and leave in nanoseconds sometimes. When worry predominates, these thoughts are always clouded and tainted by the latest piece of worrisome news. It becomes the centrepiece of our thinking and exhausts us. Think of not being paid last month, just having had a fight with the kids, closed schools and the need to earn a living – nothing trivial but all-consuming. No joke, many of us have been there recently.

What a far cry from contentment! Alan Knott-Craig speaks about “Hope as a strategy”. His recent podcast is great to listen to as he talks about our last few weeks. Dominated by corona and lockdown and maybe even some infections close to us, we often ponder if this will ever go away. Hope is not some vague “feel-good” in his message. It is the emotion, the sense of being, that lifts our eyes and our spirits time and time again. The execution of Hope gets us going in the morning with an attitude of gratitude. “But I’m so out of control”, you say, “I feel powerless.” You may be but there are always things within your control even if they are just the way you chose to view a situation or little things for which you’re grateful.

“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,” says Steven Maraboli.


I’m so glad I saw this quote and began to internalize its meaning for me a few months before lockdown. Little did I know that in a few months my world would be turned upside down with potentially doing nothing. Out of its meaning for me, I allowed myself to understand what control had been taken from me – no travel, no physical touch, no shops beyond food, Hermanus Provincial hospital theatres shut-down for disinfecting, the Western Cape a COVID epicenter, etc – but then I decided on what I could control and my journey began. So much I can control mainly on the inside – my emotions, my attitude to health, physical wellbeing, my garden, my family’s sense of being, health and relationships, overcoming frustration and not “fetching” the future which I just cannot control.

When do you say, “I don’t know,” and it sounds okay? Do you really have to know everything…all the time? Suddenly it dawns on you that others may be in a far worse place than you are, and you mobilize to help as much as you can. Hope begins as a seedling and with a little compassion and empathy, becomes an action that makes a significant difference to someone. Someone else gets hope because you dared to hope a little yourself. Maybe, just maybe, in all that outward-focused activity, a little contentment creeps into your life.

Here are some closing thoughts. Contentment swells when you:

  • Believe you have something to add and begin to share.
  • Listen to your words, curtail extremes and speak kindly to others.
  • Do something – gardening, soup kitchen, donating, house-cleaning, studying.
  • Stay healthy. Make your facemask your fashion accessory.
  • Socialize. Thank Goodness for WhatsApp, Zoom and Microsoft Teams.
  • Know many people feel like you. You are not alone.
  • Ask for help if you need it.
  • Believe COVID stands for Concentrate On Victory In Defeat.

In short, even if you only have one rose, smell it. I hope some of this message appeals to you. Maybe just triggers a little Contentment flavoured with a dose of Hope; something you can be grateful for and hang on to. It is not intended to be clever; we all feel the reality of this situation and it does get us down. But we will come through it and we will prosper again. Character, and its elements like contentment and gratitude and good choices, is moulded in a crucible and we will be stronger for this experience.

HLJ is in this with you. We celebrate the interest rate reductions, contained inflation, the low fuel price, the Deeds Office opening and the banks working throughout. All of those material things are positive. But beyond these, we celebrate our people from every walk of life, specialists in their fields of endeavour and supportive of our cause. We cannot wait to see you again, exchange a smile and a happy greeting. We know we will and right now, we are content in that hope.

Yours in Property.

SOME THOUGHTS

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This is my first blog since I wrote the three on COVID in March.

I stand by the thought that COVID could stand for: Concentrate On Victory In Defeat. Not sure how you’re feeling at this stage of extended lockdown but at least, Concentrate. In doing so, even though a possible mist of bewilderment, you can begin to think, relationship manages, and plan what lies ahead. I’m involved in a couple of these scenarios in the other work I do and whilst there is a large margin of error, the exercise is necessary and thought-provoking. Necessary, because we will return to normal again. Thought-provoking, because you actually have very little control over how things may unfold.

One of the things I find annoying is the over-60 rule. I mean really, I know 80-year olds who are fit mentally and physically and 40-year olds who were high-risk a long time before coronavirus. Surely, and especially if I bring the rich skill of experience and/or capital to a business that employs others, a medical test including corona, should be sufficient to establish my ability to deal the virus? Blanket solutions are understandable, but every blanket solution should have exception rules to get on with life, especially work life. I just don’t see enough of that in the rules per Level.

Then we have a new business and principal in Hermanus who got a slot in the trendy newspaper to write uplifting property articles. His energetic February article was headed, Two Months Into 20Plenty. I kept the article as I often do, for insights and maybe some inspiration for my blogs. Reading it this morning, one sentence caught my imagination:

The root causes of the situation [referring to “a tough market”] included a significant decline in economic activity in the country as a whole, caused in part by an epidemic which has become known as state capture.


The above thought got me going for what will be my only blog this month…

We’re Human: It’s really hard to laugh at yourself. It’s often the other guy who’s the idiot or, worse, that ah-word. But when it comes to your feelings, your moods, your thoughts in your self-isolation, you and I are only human. It’s good to be positive and the Always-On guy in yourself and for everybody else, but every now and again you may let slip, let your guard down and perhaps even regret or self-deny what you said or did. That’s forgivable so Let It Go. Say your sorries if you need to and then Let It Go. We love to call it “cabin fever” but if I told you 2 months ago you’re going to spend 5 weeks in compulsory isolation and then another 2 months in some kind of voluntary isolation, you would have thought I’d lost my marbles. Well, you’re just 2.5 days away from the first bit. We made it, many of us without ciggies or the odd lemon-butter-cherry vape. No wonder you may have been grumpy on day 22. It’s okay, Let It Go.

The Future Isn’t What It Used To Be: Donald is claiming “sarcasm” in his conversation with USA’s leading medical scientists including the President of CDC [Centre for Disease Control], about injecting disinfectant against the virus. Dettol ads on FB now give free exposure to our most well-known disinfectant brand. The only problem is, he was exchanging ideas on America’s most watched channel and programme – his slot to address the nation! Needless to say, the future isn’t what it used to be. Does that scare you? Are you the ‘comme ci comme ca’ kinda guy who manages a shrug and says, “We’ll take it one day at a time?” Have you managed to mentally rummage through all the conspiracy theories and pick your poison? Or are you faithful and hopeful that God will have His way?

Truth is, whatever “kinda guy” you are, the future isn’t what it used to be. The little I know about that future is that in this present, we tend to Catastrophise. It’s a normal part of the human condition and “not being able to see the wood for the trees” is our catchphrase for the way it seems. So, as much as you Concentrate on the future, cut yourself some slack on what it looks like. Perhaps the most honest and open thing we can say, like “Sorry” above, is “I don’t know.” I watch eNCA, Sky and CNN every day to get a sense of what the virus is doing in other parts of the world and how other parts of that world are reacting [particularly loosening] to it’s spread. I watch enough just to get a sense because I’ve learnt in the 42nd interview by the 22nd guy on the same topic on CNN…that they don’t know either. Watch the American Governors struggling to open their States as people have become more belligerent over time. Their fear: Too early and a contagion starts up versus No Jobs, No Income. And you have the future mapped out…? Really!?

One of the ways to assess the future that we’ve all become accustomed to is Scenario Planning. Base, Best, Worst case theory. Don’t write it off. Once you’ve done the obvious calculation of “Can I survive financially and, if so, for how long?” the next best thing is an estimation of the time “this” is going to last and how you intend to relaunch your business relationships and success. Don’t lose sight of keeping in touch with people virtually – a positive telecall or some smiles during face-time will do wonders 2 months from now when the market begins to open. Remember to write down your thoughts so you can refer to them later even if only to reset them.

Watch Your Words: Even as I write, I’m conscious of my words. “2 months” in the first point above may have some readers reeling while others are thinking, “I hope so.” 20Plenty is the exact kind of cliché I would have used to motivate you in February. It was cute then but looking back, it may seem so inappropriate. Trust me, I’m not trying to be clever when I quote the sentence above; I could have written it exactly the same. It’s so important at those times when we’re emotionally or even physically tired, to watch our words. Like a boxer, don’t get yourself locked into the corner where you are pummelled by “I shouldn’t have said that.” It is true that words are Life and it’s so important during these times to be careful of our moods and what we say. The other day we met with a man who was battling to work at home; we could hear the kids in the background during a business meeting. Just like people could hear my dogs bark when the doorbell rang. What about those Mom’s who are working, cooking, house-working and homeschooling all at the same time? Pulling your hair out, I would think – so just watch your words.

To be honest, I’m not sure how I got to this point in writing this blog. Perhaps you need to hear the thoughts or perhaps you’re reading because “boring” is better than “nothing.” I always have to be confident enough to say what I think will count but also confident enough to accept some may hate it. Fact is we’re all human at some stage and pressure brings out the natural part of me and it’s not always pretty. As regards to the future, we really don’t know and if our fears patrol our mind, we may get it completely wrong. To this point, just remember about one third of the World’s population has been, or is, where you are; you’re probably normal as things go. Part of that “not pretty” is what I say under pressure. It can be ugly but just make sure those words are not indelible. “Hang loose” a little before you “hang up” on someone.

To conclude, here are five tips to cope with corona:

  1. Take “Me time”.
  2. Create routine.
  3. Plan what you need to do and do it.
  4. Exercise.
  5. Sleep.
  6. Eat well [By the way, Lindt Easter bunnies are R30 on special at Checkers ☺]
  7. Be flexible as you plan

In closing, ensure a support system. WhatsApp will get you so far and comical videos may make you laugh a little, but sometimes you need “people with skin” to confide in. Know them, trust them and share if and as you need to. True love is a precious thing, but true friendship runs a close second.

See you in Level 4. Keep distance and wash your hands. We have to, and can, beat our way down as quickly as possible.

Per a DSTV ad: We are All of Us, Delicate.

God bless You.

Yours in Property.

OPPORTUNITY BEGS [Part 3]

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In Part 1 we used the acronym of COVID to good effect. Our COVID stands for:

Concentrate On Victory In Defeat

We said that using a crisis for victory, means that although you are not exempt from it and may even be infected, you use every ounce of your energy for two things:

  • To protect yourself, those closest to you, and those beyond.
  • To learn from the crisis and then begin to plan for life after the crisis.

Point is, you don’t plan for the crisis but through it. It is a juncture, a point in time, an event that can precipitate change if you isolate but don’t hibernate if you lift your head and don’t succumb to defeat.

Your immediate three actions are:

Hygiene. Isolation. Test [if you get a dry cough and sense a fever].

In Part 2 we considered some gifts that are human and precious:

Choice. Family. Panic vs Patience. Levelling. Connectivity.

We concluded with these thoughts:

  • Coronavirus begs a response from us. It is business unusual. We now have time to change where change is needed.
  • Character is refined in a crucible.
  • Choose Family. Be Patient. Allow yourself to be levelled. Stay connected.

I have had positive feedback from some readers. But in receiving that, I cannot describe how I didn’t want it in the sense that right now, I’d prefer to be writing about a rebounding market and interest rate drops and recovering businesses as staff return to them. What do I say in Part 3 to businessmen and women who are facing a financial crisis? How do I explain away Moody’s Ba1 Negative Watch rating and that the Nedbank share price is R67? Right now, to me the only good news on the horizon is a R2 reduction in the fuel price.

Most of my readers I imagine are businessmen and women. Anyone who has had the courage to step out from corporate salaries and face the prospect of commission-based sales as an originator, an estate agent, an estate agency or a conveyancer is a businessperson, in fact, an entrepreneur deluxe.

Let me tread this water as humbly and hopefully as I can:

    1. Saleable, Scalable, Sustainable: Being clever in hindsight is not my style. But allow me this one look in the review mirror. No matter how small or big you are, these three things are a guiding light for business.
      • Saleable implies that you are building a business that someone else will buy whenever you begin to prepare to sell it. Of course, this does not apply to sole traders other than you have a database of relationships built over years and you “sell” that in different ways. Financial brokers value their forward annuities from clients. Doctors sell a practice with known incomes over a previous period which it would be up to the buyer to retain. Principals would do the same.Large businesses would have developed structures of mangers to make the entity saleable without the original founders involved, and then the past income multiples would kick in. The only point I make is that this process takes time and strategy to work out for your business but don’t lose sight of the value you have built up over time through hard work.
      • Scaleable: Point here is that it would be preferable if your business was scaleable. Investors buy income streams, but they also often buy expansion opportunities. How many estate agency offices do you think Seeff started with? One. How many today? “Over 200” says Google with 1200 agents. Not bad for a company founded in 1964. Whether scaleable by opening branches, licensees, franchises, etc, it really doesn’t matter. Think about the scalability of your business and follow the strategy with intention.
      • Sustainable: This is the hardest one for me right now. Let me handle it away from our property focus. Edcon [Edgars opened its doors in Joubert Street, Johannesburg in 1929 and now incorporates JET stores], is in trouble again. I got to meet its CEO, Grant Patterson, who is ex-Spar and -Massmart, back in the days I managed Nedbank’s Card Acquiring division. He’s been overseeing the turnaround at Edcon. My heart broke for him on Thursday when he wept as he told all his Suppliers that Edcon does not have the money to pay them. Briefly, Edcon has R400m and that is needed to pay staff who cannot work during lockdown and by end of this period, Edcon will be R800m shy of budgeted turnover. Without a fresh capital injection by shareholders, Edgars and JET will finally be no more. He has been praised by some suppliers for having the courage to face them with the news instead of, as some have done, sending a cold “we-have-a-problem” letter to suppliers. While off the focus, the SOE’s have proven a disgrace for the government. Imagine the R100’s of billions used to save them being in the bank right now for COVID measures. R16bn is still set aside for SAA. For what? Com’on, shut it down. Richard Branson’s Virgin Airlines is asking for a rescue package and the USA’s airline industry is taking $60bn in rescue from the $2trillion package signed off yesterday. How do you think SAA is going to fly again? Right now surely the only sensible thing left, seems to be to salvage those businesses with a fighting chance and close the rest, thus giving the staff decent retrenchment packages. Heaven help us!These real-life dramas dramatically speak to Sustainability. Essentially, being sustainable is having money in the bank when times get tough and enough of it to survive commercial storms. Today the question is how much it would take to survive coronavirus for each of us in business?
    2. Caring for the assets: Many owners pay lip-service to their most important asset. Intentions dictate People but behaviour may demonstrate more inanimate things. In financial services, very little beyond brand and technology has much value. We are people-orientated and people-intense businesses; you just have to walk through a conveyancer’s office to realise that. I put to you that if you care for the Hero, the business, as I described in Part 2, then you will naturally care for the employees.When all is said and done and the virus is dead, your people will return to work. Some may have expected compensation, but I’m positive that loyalty will increase with having been cared for to the best of the owners’ ability. I’m not a cynic who says if you want loyalty, buy a dog; I have experienced gratitude even in instances where tough calls were made. People appreciate people – care as much as you can for your employees. After all, they are probably the reason why you got where you did in the first place.
    3. Protect the Hero: The business gives returns to the investors and employees to the staff. In that sense, if your actions sustain the business through the tough times, it may not come through unscathed, but it may come through. In doing so, however, downscaled, it will continue to offer returns and employment for many years to come. Here is the rub: What is needed to sustain your people and keep even a remnant of the business alive? Monitoring what you have in the bank, allowing for a high percentage of non- or short-payment from debtors who have their own predicaments, providing for delays in conveyancing and registration, and then looking at your costs, is your best estimate of how much you need to survive.This principle is no different for individuals and I have no doubt thousands of people are planning to delay their debt repayments in order to fund themselves or their businesses. No wonder Nedbank’s share price has plunged to R67 [by the way, it was R54 after the crisis of the early-2000’s]. Your finances will be tested to the hilt and you may need to make terrible calls way before you hit rock-bottom. And remember, you need to act sooner rather than later to ensure you’re not too late. At a national level, as an example, I can’t help but feel it’s too late for SAA. What I have written before when discussing these matters is that the business that survives continues to employ for many years. The originators and so many other stakeholders in the property industry bear testimony to this truth. Some I can think of right now have flourished even more in the last decade than before the Sub-Prime crisis.
    4. Protect your brand: Your brand, both personal and business, is the beacon by which others know you personally and commercially. Whatever you do, protect your brand. Openness, optimism, pre-emptive actions, foresight, understanding, consideration, humility and courtesy, to name but a few attributes, are the characteristics that matter most.You and your business can have those attributes. What also happens in a crisis is that people lose sight of these human and business qualities. Psychologists doing Management interventions test you often at your limits; it’s there that fuses shorten, negative instincts exhibit and the real “me” come to the fore. Especially be honest with your people. Many of them know your business as well as you do. Tell them the truth as best as you understand it, they will value your transparency.
    5. Make contingencies: There is an old term: Hope for the best, prepare for the worst. It’s not helpful at the extremes as very often the real scenario occurs between the two. The only way I know to deal with this is by using probabilities. Using base case as normal business, you need to assign probabilities to income, debtor repayment and creditors’ willingness to assist. These probabilities would then give you a worse case and then a worst case. At these cases, the amount you need to survive the storm becomes calculable.Some things from experience:–
      • This exercise almost seems puerile to discuss. It is really obvious. However, the reason why I mention it is because we may become paralysed by anxiety and spend more time worrying than acting. The exercise helps you focus on what needs to be done and when. Action casts out fear.
      • Don’t delay. If you need facilities, arrange them. If you need debt relaxation, ask; there is nothing lenders hate more that borrowers who duck and dive their payments – talk, restructure, arrange to pay a minimal amount. And if you need to shed costs, shed them before it is too late.
      • A planned reduction in overheads proportionate to turnover may become a hallmark of your leadership in a crisis. Watching the originators who survived 2008-2010 and then diversified their businesses into auxiliary financial services, they have done very well and are now better poised with more annuity income to ride this storm.
    6. Working remotely: We have talked about this phenomenon since the invention of the computer. The internet raised the opportunity. It was interesting to hear the CEO of Verizon talking about his 135000 global workforces working remotely as far as possible. What he also shared was the upgrades to their systems to enable corporate-orientated bandwidths to be upscaled for domestic traffic; a project to which they allocated $500m. How do you now manage? – no coffee meetings, no MBWA, no social occasions, no physical meetings. I’ve never done this, but I am now chairing boards virtually at least until end-April and finding it tough. I tend to watch people and facilitate meetings accordingly, now, especially with some line-loss, I find myself interrupting more frequently. Here are some of my thoughts:
      • Monitor technology links real-time.
      • I would have a virtual meeting first thing every morning to uncover needs for each role.
      • I would contact individual staffers to ensure their anxieties are aired. This would not be forced but a natural conversation between “friends”.
      • I would check myself daily for stress. As intimated above, unnatural circumstances affect behaviour. “You can’t preach the measles if you’ve got the mumps”, said one of my pastors years ago. Even though your time is face-only time, your eyes and voice will resonate unease. Calm down as a daily routine.
      • Manage your expectations. Nothing changes in delivery required to satisfy your clients. They may make some allowances, but don’t assume they will; retain standards of performance and especially, business risks management.
      • For the rest, be yourself. “This too will pass” must be our mantra as we deal some of the shocking revelations from every information source.

In conclusion, this has been very difficult to write. People matter and I’m writing to and about people with as much empathy as I can muster. But we must prevail and prevail we will.

Homeloan Junction is in this with you. We are not immune in the least and have uncertainty at every turn. However, we salute those of you working from home. Thank you for your support. We assure you of ours. Please keep in touch and let us know how things are going.

We trust God’s protection on you and your families.

Yours in Property.

OPPORTUNITY BEGS [Part 2]

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In Part 1 we used the acronym of COVID to good effect. Our COVID stands for: Concentrate On Victory In Defeat

We said that using a crisis for victory, means that although you are not exempt from it  and may even be infected, you use every ounce of your energy for two things:

  • To protect yourself, those closest to you, and those beyond.
  • To learn from the crisis and then begin to plan for life after the crisis.

Point is, you don’t plan for the crisis but through it. It is a juncture, a point in time, an event that can precipitate change if you isolate but don’t hibernate, if you lift your head and don’t succumb to defeat.

Your immediate three actions are:

Hygiene. Isolation. Test [if you get a dry cough and sense a fever].

One thing that you now have on your hands in isolation is time. Planning in the situation and through it, becomes eminently possible. But before I consider that, what can we take from this that is human and precious:

1. Choice: Up to the time of isolation we had free choice. I’m surprised that some wise guy has not taken the government to ConCourt because their “right to choose” has been violated. A National Disaster status allows our choice to be curtailed. What a privilege Choice is and, like so many things, when it’s removed legally, we realise how much we miss it. It is a right, but it is also a precious right.

I have a cricket field close to the house where we walk the dogs every afternoon because the spaniel paws us to go from 2pm onwards. Now I have to explain to them that their walk is banished – frankly, I’d rather do that than have your problem isolating schoolkids ☺

2. Family: Talking about children, how important is your family? Very important. And now, for the first time even including your last holiday, you are locked in. Dads, you will have to be inventive in your play. TV games will only get you so far but then you’ll need to do something else. Let me suggest: Pay Attention, Talk About Important Things and Listen.

I am no role model, but I understand that you can spend years grafting your backside off and seldom have or take the time to look someone you love in the eyes and Listen while they Talk. It needn’t be styled as a therapy session, it could be helping with a braai, or playing on the grass. Time exists now to love your family and restore relationships that may have frayed.

3. Panic vs Patience: I was speaking to a friend yesterday about banking and investment portfolios. Bad enough to be utilising retirement portfolios to supplement your income, but how does it feel to have your business at risk? I was CEO in 2008 when we shut down our mortgage origination business, person by person; for the associates across the country, the property market slowly shut them down. Paramount at the time for me was the notion that the business is the Hero. If you keep that alive, you keep hope and employment alive. Whilst turnover decreased from R888m in July 2007 to R92m in January 2009, we hung in with a tiny team.

It took a mammoth effort to keep the company alive, but we did it and today it, and two of the largest players have continued – even though, never to the same levels. In that calamity, Panic was never an option even though it was your natural response; it truly was a frightening time. Og Mandino, a well-respected American author, in his best-seller, The Greatest Salesman in the World, had a chapter titled: This too will Pass. I have never forgotten those words and their meaning. You see, when you begin to realise this too will pass, you find Patience. Patience to sit it out, patience with your kids, patience, almost positive acceptance, at the state of your investment portfolio, patience to cope with what you should be doing and who you should be seeing but, alas, cannot.

Let me put it this way: May Panic elude you and Patience find you.

4. Levelling: Rich, poor, black, white succumb to this virus. It is a great leveller. It was found amongst the Chinese in Wuhan, it came to South Africa as a result of a returning traveller and now we have four cases in the Overberg. Egos should be put aside; “they” and “them” are “you” and “I” as we face this unprecedented lockdown. We’re all equal. But if you can, spare a thought for those with children in a nearby shack who have to “slum it” literally, while we enjoy the relative luxury of our homes. We should be on-our-knees grateful for our circumstances and our health. Realise as you contemplate the “trial” of isolation how brief Life really is. And, how fragile. A 125nanometer [that’s one billionth of a meter] ugly little virus that looks like a sea mine, has flattened the globe. I don’t have a word beyond “fragile” to describe our human state right now. We have all been levelled.

5. Connectivity: We are also all connected. We have a Soup Kitchen every Monday at church where we serve the homeless. That event has grown from a low of about 18 people to 41 the previous week and over 50 last time. Those people are connecting because they’re hungry and soon even the restaurants’ bins will be empty. We certainly are all connected, even from the highest to the lowest of our society.

Even in isolation, with the help of modern-day media, we can remain in touch, remain connected. Make a list of those you love and those you call friends and then phone them periodically. Try not to share your problems as they probably have enough of their own already. What they need is care and encouragement. They need to hear that this too will pass and may even appreciate a lekker joke. Tell it and whatever “heavies” you share as friends, always try to finish off with a word of hope, a story of “Victory in Defeat”, remembering it’s often only the last few paragraphs of a conversation that you actually remember. Always invite them to call you if they need to chat.

I guess I could go on and on, but just a last point. Selfishness and materialism could be at the heart of your and my need to change. We may live “isolated” lives in principle – me, mine and ours – permeates so much of who we are and what we do. I remember a FB comment after two weeks of protesting in Hermanus that said something like this: “Com’on now, stop it. My domestic needs to get back to work.” I remember how I felt, an initial smile and then an anger at such insensitivity.

The lady domestic was cordoned into her own township and not allowed to leave the perimeter without paying an exit fee and if she did not return on time with what she said she would buy, they threatened to burn her house down [they only needed to do a few to get their awful message across]. What a disgraceful way to view the plight of those people, telling them to stop so as to “ease my inconvenience” at having to do housework! Shame on us! We need to open the curtains on our selfishness and let the light change our attitude. Lay down our materialism; everything is getting scratched, chipped and older anyway.

I’ve taken a moral high ground in this blog. I have done it for effect. I am guilty as charged and probably as guilty as anyone when it comes to poor attitudes at times. However, coronavirus begs a response from us. It is business unusual. We now have time to change where change is needed.

Character is refined in a crucible.

Choose Family. Be Patient. Allow yourself to be levelled. Stay connected. You could be amazed at the change that will occur in you, around you and because of you.

In Part 3, I’ll talk to some commercial implications of COVID, in my humble opinion.

Yours in Property

OPPORTUNITY BEGS [Part 1]

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This title is the best of three so far.

I’m trying not to use the acronym, COVID-19 for the Coronavirus disease or its virus’s code: SARS-CoV-2. The latter is ominous and is an abbreviation for Severe Acute Respiratory Syndrome which when coupled with 3 times the degree of contagion, is the essence of this problem globally. Probably my first and last piece of humour: I’m so glad Eskom seems to not have caught the virus. Please stay indoors Eskom, preferably close to the boilers.

For the rest, my thoughts, hopefully, to lift our eyes and hearts….

CRISIS in Chinese contains two symbols: Danger and Opportunity. I’m sure you’ve often heard that even from me. However, I learned this morning that though widely used, it is not the correct interpretation of the Chinese term. Rather, it means: Danger at a point of juncture. To take the meaning further, Juncture means: A particular point in events or time OR, A place where things join.

Machiavelli first said: Never waste the opportunity offered by a good crisis and Winston Churchill popularized Machiavelli by saying: Never let a good crisis go to waste.

With those thoughts on the table, what does it mean to us? Firstly, we are in a crisis. Every now and again I allow myself the luxury of wondering why Flu kills 600000 people a year even with a vaccine and we hardly bat an eyelid. Cancer, road accidents, diabetes, obesity and heart attacks follow suit. But drawing myself back to the evidence, Covid is three times more contagious and would kill more acutely if allowed to get out of hand. In short, if 70% of 7billion people were infected, then by Christmas, 49million people would die if the health services held up. Concentrated in older or less-immune populations [read: Italy and South Africa], that 49m would be unevenly distributed across the globe and wipe out the aged and weak, but much more like a mudslide than a fast-flowing river.

In other words, a mudslide takes everything with it whilst a river may be escaped by those able to flee. At tiny proportions of these sums, the health systems would collapse by end-April and remain that way as the impossible task would exhaust every resource in a country’s medical arsenal. Another issue is that you have it for up to 2 weeks before you know it so it’s not what you have initially, it’s what you give that is the frightening thing. So, to sum it up, me and those I “touch” would not escape the rampage of the virus.

Ironically, as there is no real medicine to counteract the virus at this stage, the unsophisticated cure to this crisis is to lock-down in self-isolation and/or respect physical distancing. To do any less, unless it is critical to do, is selfishness of the highest order. Already governments are calling in unprecedented measures to make people isolate as far as humanly possible. Watching Boris Johnson last night after the British people took to the streets and parks in a weekend of rare Spring sunshine, he was blunt in what he will do next if they don’t behave and isolate. His argument is that Italy has excellent medical care, but they have fallen over in exhaustion losing the battle now at up to 800 deaths per day. The NHS will do the same, he insisted.

So, what about us? We are precarious with a dual population of well-off and poor. Predominantly amongst the poor, we have twin peaks of TB and AIDS. Then finally, we have people come into our homes, shops and factories every day who arrived there in congested taxis, buses or the odd train. We truly have a cauldron of contagion, a crisis, and we cannot think it away. No wonder the President has made radical decisions so quickly even though we cannot afford them. By the way, he has been brilliant in my opinion and for once, all his personal imperatives and skills at consultation, have kicked in for all of us to see. Political parties [except the Reverend Kenneth Meshoe, ACDP, who is quarantined], Labour, Business, and Social Groupings all combining to accept and agree on packages to make our isolation to 16 April, a possibility. Well done, Mr President! We don’t like what you’re doing but we really value that you’re doing it to try to “flatten the curve”. And what an amazing gesture of support for the nation in the R1bn donations each from the Rupert and Oppenheimer families.

Please, my reader friend, listen to him – you are less bullet-proof than you think.

Now that I’ve stated the obvious and re-nauseated those of us exhausted by the news, what was all that about “not wasting a crisis”? I am intrigued by the notion of “juncture” this morning. It is the danger at a point in time or where everything meets, that the word CRISIS speaks to. I like to think of snooker balls that are aimed and strike each other at precise angles – a point in time and juncture. No matter how softly, they clink and bounce apart on an intended path. The energy of the player transmitted through the cue drives the energy that moves the balls. What a different metaphor now than the one I intended when I sat down to write this blog! You see the snooker balls are designed for movement, not to stick together. They are designed for winning ways. When they’re sunk, they score and sometimes, when sunk by mistake they are re-introduced to the game, they literally, get a second chance. No wonder the inimitable Winston Churchill, admonishes us to “never let a good crisis go to waste”.

With this blog in mind I have been trying to come up with an alternate acronym for COVID. I’m sure you have many, but in the light of the above, I propose:

Concentrate
On
Victory
In
Defeat

You see, using a crisis for victory, means that you are not exempt from it and so you enter it with everybody else whether you’re infected or not. But then you use every ounce of your energy for two things:

  • To protect yourself, those closest to you, and those beyond.
  • To learn from the crisis and then begin to plan for life after the crisis.

Like I’ve said about retirement, you don’t plan for retirement, you plan through retirement. You answer the question: When I retire, what will I do beyond that “juncture” to ensure life is meaningful to me and others. To use the metaphor above, you’d just be moving your snooker game to a new table but use the same balls. This crisis has the potential for good change if you isolate and don’t hibernate if you lift your head and don’t succumb to defeat. Trust me, I’m not being patronising or clever. I’m already speaking to people who confess they’re “benoud” [fearful, anxious] and I don’t blame them.

Coronavirus has the potential to cripple lives, finances, dreams and even societies and their governments. I’m watching President Trump like a hawk and last night distinctly felt he’s losing grip of the situation and any hope he has for a second term. Phaffing around with the Defence Bill, wondering if 15 days of shutdown is excessive, bidding against New York State for medical supplies, may be sowing the seeds of his own downfall. On the other hand, Italy, Britain and South Africa seem to have the leadership fortitude to succeed “whatever it takes”.

To finish this Part 1, my immediate actions for your consideration:

 

  • Hygiene: The big no-brainer at this stage of the game. Sanitise, sanitise, sanitise. You cannot wash your hands enough. And then, DON’T TOUCH YOUR FACE! Yes, that includes you Jack – I really battle with this one and sometimes I feel like Nadal before he serves ☺
  • Isolate: Whoever and as much as you can. I’ll say that again, Whoever and as much as you can. It is the big gainer in this disease. It flattens the curve and if you have doubts, China shutdown Hubei Province of 60 million people and Wuhan City in it. Whilst Wuhan remains closed until early April, Hubei is open for traffic. No better sight was seeing cars on their highways this morning as life begins its journey back to normality. Joy to the World; there is hope at the end of the isolation tunnel!
  • Test: If you get a dry cough and sense a fever, test without failure or delay. Plan now how you may isolate in your own environment if you test positive to prevent infecting those nearest to you.

I realise that many of you for valid reason feel you cannot isolate. However, be bold enough to ask yourself the question: What would I do if infected? And then work back from there. In this regard, we have a church of about 700 people with 80% of them over the age of 65, the highest of risk by any metric. It has been a real challenge to cancel all meetings, at this stage probably Easter, and then trying to stay in touch with the congregation many of whom are technically challenged and perhaps not even wealthy enough to be tech-savvy. Dealing with this issue in a short space of time has given me a little insight into the difficulties many readers will face in their business.

Have patience with your leaders at whatever level; they have never been here before.

We’ll continue with Part 2 in 48 hours tops.

Yours in Property.

2020/21 BUDGET

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This a very short blog.

In my humble opinion, the Budget was good. For property, it means:

  1. Less transfer tax with property less than R1m zero-rated.
  2. More money in the pockets of people who may be 1st-time homebuyers. The tax entry threshold has been increased to R83000 and lower-income tax rates have been reduced.
  3. The Treasury has decided to reduce government expenditure as required by any corporate who has grown their staff to the point of unaffordability. In addition, even though recent declines have occurred in numbers of employees, the wage bill has increased by a real rate of 40% in the past 5 years [I think I’m correct about the time, but I’m definitely correct about the increase].
  4. About R260bn is being cut out of government starting this year over 3 years.
  5. Money has again been allocated to Eskom and SAA; about R160bn. Eskom is simply too big and too important to the country to fail.
  6. Fuel is going up but VAT and Private tax is not. Corporate tax may come down.
  7. “Sin” taxes are up.

Give that man a Bells! Oops, it’s about 30c more expensive ☺

So, if the banks continue to lend and, as we expect, the rates may continue to go down, property will be in the pink.

Now for the bad news…….

  1. Government has blown its budgets for years now.
  2. If Tito fails and the EFF march on Eskom today and the “declaration of war” by Cosatu succeeds to shy away from the resolve of the government and the President, our Debt: GDP ratio, which is already in eye-blinding spheres, will disappear into the stratosphere. There, we will ask the IMF for a bailout or not, but whatever, it will be ugly.
  3. Moodys will probably downgrade us and the ultimate question: Is Junk priced in? will be answered.
  4. The money paid into SAA will be wasteful expenditure ab initio. That into Eskom may just do what it has to and help keep the lights on.

It’s a brave man who calls what will happen but indulge me and let me give it a try…..

  1. I think the Finance Minister will be able to convince the Unions that less is more, and that destroying government is counter-productive for everybody.
  2. SAA business rescue will succeed with a very trimmed down airline, or a sale with half the jobs protected and, whichever, the management will be sanguine and professional going forward.
  3. Eskom will tide our way by spluttering through on three cylinders. Private power will increase rapidly and more and more, large public and private institutions will generate their own power. This will place an already battling Eskom under enormous pressure but never again will we be in this one-man-one-power position. None of the major nations I have visited have all their electricity coming from one supplier. In America, with hurricanes and snow tempests, they could not stomach them if they did not have widespread power producers; just makes sense.
  4. Government will come good with repatriations of money stolen by corrupt means, it will prevent wasteful expenditure and SCOPA will prosecute offenders, it will take the pill of salary reductions for staff continuation and it will muddle its way through ANC factions and opposition’s disgusting behaviour. Maybe I’ve just been reading too much Mcebisi Jonas, After Dawn, Hope after State Capture, but I was buoyed by the grip he has on matters economic and the Foreword by Cyril Ramaphosa. They know exactly what to do and that if they do not, the lights will not be the only thing that goes out.
  5. The President’s meeting with business and his urgency for private investment must bear fruit. Off this low base, every R1bn will count towards growth.
  6. As I write the stock markets have plunged and the Rand has followed suit. The only good news [for the wrong reason, of course] is the Fuel price. The downgrade may affect already-scared sentiment, but right now Corona has terrified the world. I thought the 58% theoretical infection of the global population was unlikely. But it’s creepy at the moment. Who knows but that Corona will dissipate and a downgrade will be lost in the noise of it and then we’ll rise up again? Truth is I have no idea but I sure do hope so. In the meantime let your nervous twitch cause you to wash your hands frequently and touch anything but your face.
  7. I think the banks will continue to lend, but the rate will need to remain so as to protect the Rand somewhat. Bond investors will continue to call for a world-beating rate differential but that certainly is already priced in. It seems the Citi World Bond Index investment may only be about $8bn so that will not affect us too much.

Motherhood and apple pie, my thinking may be. But if you panic, panic first; it’s too late to panic now. So, I would not say, Eat, Drink and be Merry, but certainly let’s understand when things are not under our control and relax in the knowledge, we have done our best.

If the virus begins to be contained and the budget has a shot at implementation, property – our main focus – will benefit and things will improve again. We will hope for that normalcy back in our lives again. In the meantime, spare a thought for China, its neighbours and Italy who all seem to be in the eye of the storm.

Yours in Property.

THE LAND QUESTION CLARIFIED

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I’m grateful to a friend who let me have this newsletter this morning [11 February 2020].

I am very reluctant to copy articles into my blogs but there are times that I simply cannot do justice to a critical subject about our property industry like an expert has done. I have often referred to JP Landman in that regard. In this case, the Land question is so sensitive, has become the political soccer ball of both Left and Right, and may have led to my own oversensitivity in the way I express myself. In the latter regard, I’m acutely aware of words having influence and would never like to leave a wrong impression where it is not justified.

So, with clear and sole reference to JP Landman, I send you his important perspective verbatim.

Land Expropriation Without Compensation

3 February 2020

Changing the Constitution to allow for expropriation without compensation has certainly ignited South African politics for 2020. It is worthwhile cutting through the noise.

Current Position

Currently, expropriation is allowed and is governed by both the Constitution and the Expropriation Act. Section 25(2) of the Constitution (the property clause) is quite clear: Expropriation is allowed subject to compensation, which must be just and equitable. Expropriation decisions are taken by the Executive (government) and the courts can review those decisions and make a binding order. Considerable jurisprudence has been developed on how expropriation should be done, and compensation calculated. These rules bind all parties, including the Executive.

The decisions on expropriation are taken by the Executive branch of government, in practice mostly the Departments of Public Works and Land Affairs. In the last few years a specialist agency, the Valuer-General, was developed inside the Department of Land Affairs with the specific responsibility to advise on the value of land. The Valuer-General is part of the Executive and is subject to the authority of the Constitution, legislation and the courts.

So, the current legal position is clear: The Executive branch can expropriate, subject to the criteria of the Constitution, legislation and general jurisprudence; and the Court has the final say on whether the Executive has met those criteria or not.

Suggested Changes

What then has changed and why is the land expropriation issue now so hot?
Expropriation without paying compensation has become a policy plank of the ANC. After the 2019 election, the new Parliament appointed a committee to handle the amendment of section 25.

In assisting the committee, Parliament’s legal services drafted a short Bill that amends the Constitution in three ways: It provides that ‘… a court may … determine that the amount of compensation is nil’; that the R nil compensation must (still) be ‘just and equitable’; and lastly that national legislation must be enacted spelling out the ‘specific circumstances where a court may determine the amount of compensation is nil’.

Political Differences

The Parliamentary Committee met on the 3rd of December to discuss this draft. According to the minutes of the meeting the honourable members disagreed on, amongst others, two issues.

Firstly, DA and Freedom Front Plus members wanted the specific circumstances where R nil compensation can be paid to be spelt out in the Constitution itself and not in accompanying national legislation. Advocate Van der Merwe from Parliament’s Legal Services argued for separate legislation. The committee agreed to reflect on the issue and then come back to it.

Secondly, members disagreed on the role of the courts. DA and Freedom Front Plus members felt the courts had to be involved in the decision itself (not just the review of a decision), particularly where R nil compensation is payable as it is so serious. ANC members agreed that ‘The courts had a role to play as forums to mediate on disputes’, however, they did not want to make the courts responsible for deciding on expropriation. That is a function of the Executive. The issue was left there. The Draft Bill was published on 6 December for public comment without resolving the differences between the parties.

On 21 January, in his concluding remarks after a four-day ANC National Executive Committee (NEC) Lekgotla, President Ramaphosa said: ‘We are encouraged that the Lekgotla endorsed the recommendation that the power to determine the quantum of compensation for land expropriation should reside in the Executive.’

Then all hell broke loose.

So, What Has Changed?

The current position on expropriation is that the Executive decides and the courts review. Nothing in the Draft Bill, the president’s remarks, nor the comments of ANC members in the committee suggest that this will change. Any person who is not happy with any expropriation amount, including R nil, can still approach the courts and ask for relief based on the ‘just and equitable’ test of the Constitution, or any other legal prescripts in our law.

In that sense, the current hysteria over the ANC making a U-turn and changing its position is clearly overdone. It is clear from the committee minutes what the ANC’s position has been all along. The hysteria that the courts are being cut out is also wrong – they retain the right to review and can amend or set aside any Executive decision (including R nil decisions) that do not meet the requirements of our law.

Separation of Powers

What will be a change is if the courts are made responsible for administering R nil decisions, ie taking a decision on when an expropriation should be R nil. It all comes down to the doctrine of separation of powers.

The Constitution protects democracy by separating the power of the state into three parts or ‘arms’: the Legislature (Parliament, the nine provincial legislatures and local councils), the Executive (ministers and government departments that run the country from day to day), and the Judiciary (the courts).

Constitutional lawyers like Professor Elmien du Plessis from Potchefstroom argue that giving that discretion to the courts ‘…is not without problems. It is not for the courts to administer the legislation. They should only mediate disputes, and in doing so, they can lay down principles and guidelines for decisionmakers. The power to expropriate stems from legislation …’ and ‘The Executive executes the legislation’. In short, one does not want judges acting as civil servants.

Under What Conditions Can R Nil Compensation Be Paid?

The answer lies in the new Expropriation Bill that was published for comment in December.

The Bill lists five instances where land can be expropriated without compensation (clause 12). These are:

1. Land occupied or used by a labour tenant (as defined in the legislation);
2. Land held for purely speculative purposes;
3. Land owned by a state corporation or state entity;
4. Land that has been abandoned; and
5. Land where the market value is equal to or less than money the state has already spent on it.

Clearly there are some major definitional issues. When, for example, is land held for purely speculative purposes?

Patricia de Lille, Minister of Public Works, will be responsible for taking the Expropriation Bill through the Parliamentary process.

Timeline

The one thing on which the Parliamentary Committee agreed is that the process of changing section 25 must be completed by the end of March. That looks completely unlikely as the deadline for submission has already been extended to the end of February. Allowing for the normal slippage, we can only hope for closure and certainty on this important matter in the second half of the year.

So What?

  • The current system of expropriation where the Executive takes the decisions and the courts can review them will remain. Nothing has been proposed to change that.
  • Some political parties want a change that will put that decision-making with the courts. The ANC is unlikely to accept that.
  • The separation of powers doctrine requires that executive and judicial decisions are taken by different arms of government.

The recent explosion of emotion around this issue again underlined how important it is that this matter is finalised, and certainty created. The lingering of this issue and constant emotional explosions undermine confidence, investment and economic growth. It is lingering too long.

JP Landman
Political & Trend Analyst

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Yours in Property.