Hard to believe half the year has flown by!

It has been loaded with politics including a national election and the finalisation of parliament, economic data for the first quarter that sucks at -3.2% GDP growth, SOEs’ revelations every day that boggle the mind, defamation claims that seem to have become lawfare, and emigration statistics that leave you reeling. Never a dull moment in SA Inc.

That said, we have survived and even Donald and China seem to be reaching some agreement. Hauwei or Meiwei is Donald’s Wei but I Mustsei, he currently has the best stock exchange performance in the world – often in excess of 15% with the Nasdaq flying. And then there is the Brexit “Deal or No Deal” show which, with the weakest Bachelor I have ever seen, has had us glued to the screen more than Netflix. I never knew I would binge on Theresa May – flicking from her to Deputy Chief Justice Zondo more times than a fly escapes its swatter. Never a dull moment in world politics either.

Our property market has moved sideways and getting a positive article out of anyone that I didn’t think was simply “talking it up” has been really hard. But out there, hard-working men and women have made ends meet and sold and sold despite the push-back of the market. That it is a buyers’ market, there is no doubt but even getting a buyer to bite has been tricky. You can’t do deals with people walking through your show-house; you actually need an offer to make a negotiation possible. My friend who has had 25 couples come through his house in two months feels exactly what I’m talking about. But I must say, both from a rate and an approval point of view, the banks have remained really good. No shut down from them and truly, they hold the key to continued sales and borrowing. If we can just hold Eskom solvent, we have a good chance of emerging from the mess we are in. Heaven help us, please!

Getting technical for a moment, I received a good article in Businesstech, 29 June 2019, quoting Tobie Fourie, National Rentals manager, Chas Everitt and entitled, New South African rental laws may be implemented soon – these are the changes you need to know about, that gave some good insight for those of us owning buy-to-lets or in the rental business. Some extracts:

Top of FormBottom of Form

The Rental Housing Amendment Act will be implemented soon. The ‘new’ Act – which was actually passed in 2014 – contains the most recent amendments to the Rental Housing Act of 1999, which is still in force.


The act currently governs the overall relationship between tenant and landlord and sets out their statutory rights and obligations and aims to clarify certain aspects of the older Act that have given rise to many differences of interpretation.


The main provisions that landlords and tenants need to be aware of include:

  • It will become compulsory for lease agreements between the landlord and the tenant to be in writing and legally enforceable.
  • All sections of the lease and any explanations and definitions it contains will need to be explained to the tenants and understood before the document is signed.
  • It will be the landlord’s responsibility to ensure that the rental property is in a habitable state, which is in line with the existing Rental Housing Act.
  • The landlord will be responsible for maintaining the rental property and will have to ensure that it has access to basic services such as water and electricity.
  • Only the local authority will be permitted to cut off services to non-paying tenants.
  • No tenant may be prevented from entering the rental property or denied access to the rental property without a court order.
  • A joint inspection by the landlord and tenant has to be done on the commencement of the lease period, and if the landlord does not participate in this inspection, no part of the tenant’s deposit for repairs or damages may be withheld when the tenant leaves.
  • A defect list will have to form part of the lease agreement as an annexure.
  • When the deposit is paid back to the tenants, the interest earned on that deposit must also be paid to the tenant within seven days of the expiration of the lease, subject to any deductions for damages.


Landlords who fail comply with these and other requirements within six months of the new legislation coming into force could be liable to pay a fine or even face a jail sentence for non-compliance.


“And these legal complexities will make it all the more important for landlords to appoint reputable, reliable, knowledgeable, qualified and legally registered rental management agents to assist them and ensure they remain compliant”, said Fourie.


Let’s face it, if you are letting a premises that is not habitable, without a written lease and for which you do not have an inspection list at the beginning and the willingness to fix problems that arise, you should not be a landlord. On the other hand, good landlords have always paid some interest on deposits as they have earned [read: saved] interest if they took the money and put it in their bond on the property. But, there is the nagging feeling that letting is carrying more and more onus on the landlord to be proven right and the tenant to be proven wrong. Having said this, I can honestly say I have never had a bad tenant. Those of you who have will tell me to be very grateful, I know.


We enter the second half. Hopefully our politics settles down and the Zondo Commission provides an interim report on glaring state capture and we have a rate decrease. Then if we can hold onto our investment grade from Moody’s and fund enough of Eskom to keep the lights on, we may be through the first part of the drift. It’s knife edge to be honest but failure is also not an option.


Neither is pessimism. I understand how you feel believe me but one thing I know from personal experience is that all the worry in the world does not move you forward. Worry is like sitting on a rocking chair thinking you’re moving. You’re not; you’re just standing still and getting weaker every day, physically and emotionally. Cut it out and remind me to do the same if I lapse back. Homeloan Junction is in the same boat as you, nothing more and nothing less. We are here to support you to the best of our ability and are onside to help you succeed. Success to you in the second half!! – the same success we wish ourselves.


Yours in Property.



Shew, this month has been hectic! Yours as well?

We’re on the last of our three blogs on the “I” of the acronym, LIFE. So far, we have covered Live, Laugh and Love. Then Imagination and Inspiration – that was a tome as I re-read it 😊

Today, we’ll cover Investment and I promise it will be shorter. Nonetheless, I am again ready to “throw my heart into it”.

Albert Einstein dumfounds me when he says, The most powerful force in the universe is compound interest.” Every time I read it, I think he must have had unaffordable debt and he couldn’t believe the cost of not being able to pay it off on time, but, of course, that’s tripe – if he ever had debt, he knew how much money he repaid. We, at Homeloan Junction know that at 10%, a 25-year bond is 2,5 times more than the original cost. Throw in the transfer, attorneys, etc and buying houses are expensive.

Of course, this type of compounded interest we all know well. Hopefully, we also know enough to never incur credit card, and upwards in the sense of interest rate debt. My rule is simple,
what you can’t settle on your card at month end, can’t be bought. With that rule, I buy almost everything on my card and just settle the balance at month end. Negative compound interest kills and especially when no tax deduction lessens the load on our purse. The inverse is Investment. Here, compound interest works splendidly.

The other day I helped an elderly lady consolidate her investments; little bits and pieces in three financial institutions. Wow, what a surprise as I trawled through old records dating back to the late 90’s when she retired. Figures like R43000, R60000, etc, but nothing too rich. Unsophisticated investing – a unit trust, fixed deposits, money market, etc. To our surprise, the total amount was over R600000! The reason is that she has lived off her dwindling pension in real terms and never dived into even the interest of her investments. Then, every 6 months or so, she would be advised to re-invest and she did. The lot just grew and grew and the end result was unexpected. No wonder a friend of mine once asked me, What’s the best investment?” I waited and he told me, The one you stick to.” You see, the elderly lady could probably have done better in Naspers, but what she knew all well was that time and interest are directly correlated and maybe she didn’t maximise the opportunity, but she had enough. I am not an investment advisor, but here are some generic rules for Investment from personal experience.

Time is measured two ways, the length of time you save and the length of time you don’t.

You see, R500 per month over 40 years at 8% earns you R1745504. The problem of not starting 40 years ago can be expressed in three ways:

  • 30 years: R745180
  • 20 years: R294510
  • 10 years: R91473

This is the way we normally look at it and, often, we look at it relative to a fixed date, retirement, child’s education, the coffee shop we’ve always wanted to own etc.

There is another way and it’s not insurance broker-speak, just a fact of life – Cost of Delay. You see, the numbers of 40 and 30 years may kinda look alike, but the difference is R1000324. That’s a Million Rand! Compare it to the R91473 which you save in the first 10 years and the number is 11 x [1000324/91473] more than you could save. That’s the awesome power of compounded interest. It builds like a hockey stick at the end if you have not touched it.

You see, when the “fixed date” arrives and its retirement, the third problem is that you just don’t have 40 years of R500 per month to catch-up. Very sobering, I know.

In case you think you’re the only one who missed this, I took out a unit trust in 1976. It was R50 per month. As a guess, the JSE Index would have been about 500 then. Today it is 55000. Doing the sums, that’s 11.22% growth plus dividend yield of, say, 3,5% would total 14.72%. Using that “interest rate”, my little R50 per month investment would be worth about: R1900000. Makes you think, doesn’t it?!

So, the moral of the story is: Take out an investment while you’re young. Don’t delay, and then, stick to it.

You know as well as I do, that the money part of this Investment is the easy part. Life calls for an investment as well. For that thought, I turn once again to my old well-known guy, Dr Dennis Waitley, who said, It takes as much energy to live a good life as to live a bad one. So live a good one.” There’s a thought, but we also know we don’t always put the “good” together long enough to make the ultimate difference. We sometimes stumble up and then stumble down and then stumble up again.

We all seem to do it; I include myself. On the negative side, it seems we have the ability to:

  1. Try
  2. Fail
  3. Regret we failed
  4. Regret we tried
  5. Then try again
  6. Repeat the cycle.

You there as you read it? The downward spiral of defeat and “if only’s”? You know that the only failure is failure itself. Don’t judge me by my successes, judge me by the times I failed and then stood up again”, said Nelson Mandela. Read some of his books and this understanding of life permeates them. “I should have…”, “I could have…”, “I shouldn’t have…” are often on his lips but in the end, “I did, and if I failed as I or some may think, I tried again.” [My way of expressing this man’s attitude to Life]. Ultimately, despite the naysayers, Nelson Mandela succeeded beyond our expectations.

So let’s rerun a “good life”. One that you invest time, energy, and a focus on priorities into: 

  1. Try
  2. Fail
  3. Forgive yourself or ask forgiveness
  4. Learn
  5. Succeed
  6. Repeat the cycle.

You see, investment in yourself tries, parks the past, learns falling forward, and never gives up. Please hear me!

Taking from the financial lessons above:

  • Start as soon as possible. Lives also endure the cost of delay.
  • Invest regularly and as much as you can. A little study is better than none. An hour a day extra doing what you believe is important, not urgent, is 3650 hours of extra focus on your priority every 10 years, not just your “stuff”.
  • Opportunity cost is real. Redefine your focus by all means, but don’t stop doing what is right for you.
  • If you’ve wasted time, stop regretting it and get on using the time you have left.
  • Forgive yourself, you’re better than you think.
  • Celebrate successes, even if you’re alone.

I don’t want to go on to produce a tome like Inspiration, though I could. Thus, a closing thought from the Good book. Job is a well-known story – a great guy who loses everything and then recovers “twice as much as before.” At the end of chapter 42, the last verse says this: The he [Job] died an old man who had lived a long, full life. That fact stuck with me when I read it about 2 weeks ago. Long is easy – Job died at 140 years of age. Right now, scientists are telling us that the person who will live 200 years has been born. Whilst I’m thrilled that’s not me, the “full” caught my attention and has wandered through my thoughts since. What is a ‘full’ life? What things have I done, seen, been to, given attention to, consistently undertaken, left, adopted, listened to, read, spoken about, focussed on, achieved, believed, debunked, tried, striven for, loved, hated, bought, sold, eaten, experienced, achieved, learned, given birth to…that makes up a life that is “full”? I’m still teasing this out so I don’t intend to answer my question right now. However, I encourage you that if something in the question, or anything else above it, has struck you, read it again, begin to coagulate your thoughts, mind-map them and let them develop into something positive and forward-thinking.

As the business of HLJ, we are all on this journey. We have chosen to associate with each other. We have common ground, knowledge and resilience. Use what we have to make a better place from our inside out. Touch lives and encourage them upwards once again. For those on a high, imagine the possibility of being an inspiration to the rest of us and invest some time in all of us, and all of the others, you meet.

Yours in Property.


Boy, do we have an interesting market at this stage in the game.

Our gut would tell us that the property market is slowing. Recession, politics and pessimism [RPP] all seem to indicate the obvious, but in some of the recent reports received from Homeloan Junction, some great contradictions appear to be happening. Make no mistake, the general trend is downwards from both the estate agents and the economists, but let’s see what jumps out of the woodwork to encourage us.

The following extracts are used for explanation and then I will make brief comments on some of the aspects:

First of all, the ooba ORIGINATION OVERVIEW: SEPTEMBER 18 tells us that “the Bond Application Intake for September 18 was 10.8% lower MOM and 8.9% lower YOY.  Cumulative volumes for 2018/19 are 10.8% down on same period 2017/18.”

Guys, if we had “suffered” that level of reduction in Sub-Prime [2008-2012], we would have been ecstatic. Most of us were down 90% by January 2009 from the height of July 2007. 10% is surprisingly good given the level of RPP in the market right now. I bet many origination consultants with good estate agent relationships have not yet felt any marked decline in their business. Admittedly, the issue is always pipeline and when that begins to drop, watch your step.

FNB’s Property Insights report, covering the FNB Estate Agent Survey’s 3rd Quarter 2018 indicates this slowdown:

“The 3rd quarter FNB Estate Agent Survey points to a further weakening in the housing market (and perhaps economy too) in the near term. A broad declining trend in the Residential Activity Rating started in 2015 and has continued in the most recent quarterly survey.

From a multi-year low of 5.35, seasonally-adjusted, in the 2nd quarter of 2018, the Activity Rating declined further to 5.12. On a year-on-year basis, the indicator went deeper into negative rate of change territory, from -7.21% in the 2nd quarter to -9.2% in the 3rd quarter.”

The direction in the rate of change in the Residential Activity Rating correlates reasonably, though not perfectly, with the direction in the rate of change of the OECD and SARB Leading Business Cycle Indicators for South Africa, sometimes even leading the Leading Indicators with directional changes. Both indicators thus point to an economy still in the doldrums, with weakening in the near term a possibility.

Agents point to further deterioration in market sentiment post “Ramaphoria”. Those that cited “Positive Consumer Sentiment” in the 1st quarter of 2018 were a far greater 56.7% of survey respondents. In the past 2 quarters, however, the response has deteriorated markedly. By the 3rd quarter 2018 survey, those respondents pointing to “Positive Consumer Sentiment” had dropped back to 9% of total respondents, while those pointing to “Economic Stress/General Pessimism” have increased noticeably to a very high 77%. The economic weakness thus appears to be increasingly taking its toll on sentiment in the market. Within this response category, agents include “recessionary conditions”, “cost of living increases” which include petrol price and tax hikes, and “policy uncertainty”, as factors.

For new mortgage lending, this can all have implications with a considerable lag.

While also having weakened of late, Gauteng appears to be the region where Residential Activity has held up best in the weakening national market. Of the 3 Major Coastal Metros, it has been Cape Town that has returned the lowest Activity Rating. This should not be too surprising, however, after recent years of far stronger house price growth than the rest of the country, Cape Town has run into home affordability challenges that have dampened demand and general activity.

Segmenting by Income Area, the Lower End outperforms, but the gap between it and the HNW has diminished.

In FNB’s Property Insights report, covering the FNB Estate Agent Survey’s 3rd Quarter 2018 Indicators of Price Realism and Market Balance,  in the 3rd quarter of 2018, we saw a slight quarterly increase in the estimated average number of “serious” viewers per show house before sale. From 10.42 viewers in the 2nd quarter, the estimate rose to 10.77. However, the average remains well below the 14.42 high reached in the final quarter of 2013, just before the early-2014 start of interest rate hiking.

In the 3rd quarter of 2018, we saw a further increase in the average time of homes on the market prior to sales. From 16 weeks and 4 days in the 2nd quarter 2018 Estate Agent Survey, the average time of homes on the market rose to 17 weeks and 6 days. We take the admittedly subjective view that around 12 weeks (near to 3 months) average time on the market more-or-less represents a market equilibrium situation on a national average basis. The market has thus broadly been drifting away from that equilibrium level since 2016.

No further rise has occurred in the high percentage of sellers required to drop their asking price to make the sale. The 3rd quarter 2018 survey showed a slight decline in this estimated percentage of sellers having to drop their asking price, from 96% in the previous quarter to 93%. Stock constraints remain low. We see very few agents pointing toward housing stock constraints in the market and slightly more pointing towards “ample stock”.

I order to corroborate the FNB and estate agents’ perceptions, just a short extract from Standard Bank’s Property Research of 25 October 2018:

“The SA property market was again softer Q3:2018 due to uninspiring real economy data and mixed signals from business and consumer sentiment indices. Also, financial conditions have remained tight, although relatively relaxed when compared to 2007 when last SA was in an economic recession. Consumers remain reticent about big financial obligations despite their relatively upbeat outlook on SA economy.

Regional house price trends show that the inland metros (Johannesburg, Tshwane and Ekurhuleni) still enjoy steady price growth but lost momentum in Q3.

In contrast, the coastal metros of Cape Town gradually decelerated in the past few quarters. Cape Town now is at the slowest pace since 2012. According to SBR’s regional HPI, it is also the first time since 2012 that JHB, SA’s biggest property market by volume, has outperformed CPT which is SA’s biggest market in value terms. We regard the current trends in CPT as a necessary cyclical downturn to realign prices with economic conditions at both regional and national levels.

The recent surge in prices (between 2014 and mid-2016) seems misaligned with the strength of economic fundaments at that time; now, prices are moderating. Waning sentiment due to the SA drought as well as policy uncertainty here and abroad, and a slowing influx of the affluent, restrained property prices in Cape Town. Properties in the higher end of our price segments are now deflating in the region and the volume of cash transactions is trending downwards.”

So we have the two banks pretty much in synch and the FNB Estate Agents’ research is really close to the coalface. To end, some points:

  1. On the lighter side, maybe I can get some sympathy for my early-year assertion that Gauteng would show real house price indices. At the time, I foresaw a good GDP growth and the fact that Gauteng house prices are really cheap in relative terms. At least now, Gauteng is the strongest performing market so I’m somewhat vindicated nearing year-end.
  2. Cape Town is adjusting significantly. No games here, it’s expensive and the only really good news is that we have alleviated Day Zero until the rainy season in 2019. Farmers and residents alike are delighted and the mood is far more positive on that front. It remains now for Patricia and the DA to sort themselves out so we can all get really happy so close to the next General Election.
  3. Don’t underestimate the fact that the SARB has not raised interest rates. Crippling would have been the effect on the back of Oil and VAT if they had. Thank you, SARB.
  4. The extended delay of house sales goes without saying but so interesting that the number of price reductions for a sale has reduced. FNB warns that we should not hang our hat on one measure, but despite the estate agents being “in stock”, buyers are willing to pay reasonably priced houses; that’s good news.
  5. On the other hand, sellers seem to be holding out for their price. Based on an average of 12 weeks on-market, that is increasing to over 16 weeks – a third longer. What that tells me is that genuine sellers are selling for good reason and that distressed sellers are fewer and further in between. In other words, distressed sellers would collapse their price to sell urgently but that’s not happening. I think part of the reason for that is that employment is holding its own except in distressed areas like the Platinum belt.

    Remember, things change quickly. Ramaphoria showed us all how quickly our perceptions become our reality and what an impact that has on our behaviour. The Rating Agencies are holding their horses, Tito is making very positive noises, the Nugent Commission is drawing to a close with an obvious outcome and the SARB has inflation on the side for the time being. Election 2019 will take place and I believe, is predictable. To not have that view is not an option to me.

    Things are positive and if there was any relaxation in the Emerging Markets drama, it would augur well for SA Inc. Look up, it might be sooner than you think. Whatever the case, HLJ continues to be in the market and there for you.

    Yours in Property.


“Sorry, seems to be the hardest word.” That’s how the song goes. But in my last blog, I said sorry for over-estimating the rise in Joburg prices this year and the GDP growth of the country :-(!

Let’s have a look at the property market in this blog.

I still think that we’re being let off the hook and things are going fairly well given the dire economic news we read every day. My opinion tries not to be scientific so a lot of gut-feel goes into that statement. In addition, I live in a small, upmarket town which has had some raw land-delivery protests in the recent past and this, together with talking to contacts who are steeped in national property businesses, I’m sure colours my view. As you read, you may have a different perspective so let me know if you differ significantly.

Some insights:

  1. FNB’s John Loos, in FIN24.com on 4 September 2018, informs us that “the majority of home sellers (96%) have to drop their asking price in order to sell the property” in the Q2: 2018, according to the latest FNB Estate Agent Survey. “This is up from an estimated 91% reflected in the first quarter survey and compared to an estimated 78% who ended up having to lower their asking prices in 2014. He says the survey evidence suggests that asking prices on average have become less realistic in recent years. The estimated magnitude of asking price drop needed to make a sale became slightly larger – from -8.2% in the first quarter of 2018 to 9.2% in the second quarter”. And finally to this point, “FNB has not seen any noticeable increase in the percentage of properties resold at prices lower than the previous purchase price. About 9.6% of total properties resold in July were estimated to be at lower prices than the previous purchase price. This is higher than the 8.7% of May and 8.9% of June.”

    The word “realistic” is loaded with sentiment, the seller’s state of mind. If my home must be sold at less than the purchase price, about 10% per the comment above, that’s stressful. Making a capital gain of less than inflation is going backward fast especially given all the costs of selling and re-buying or renting. Making no gain could best be described as a stress-sale. On the other hand, in some parts of the country, 10-15% gain almost per annum, has been the order of the day. No more and my friend in Cape Town says that “to drop a Million on your price” is the nature of house sales at the moment. So, would any seller drop the million before selling? I don’t think so. You’d do that when you are a serious seller and see that no one is coming through your door. Getting the price right depends on the seller’s desire to sell. We have a house nearby going for R12.3m which has been on the market for about 6 months. It’s not going to sell even on a lucky dip and the price indicates seller reluctance.

  2. On the other hand, in a place like Hermanus what would be the price of this seller’s house? My guess is about R10m. Why a guess? Well, the market has definitely received more stock given the recent unrest which, as we’ve discussed before, is very in-your-face in a smaller town, so the outworking of these sentiments remains to be seen. The jury of potential buyers is out. Linked to this and for interest sake, the EFF held it’s Provincial Conference in Hermanus last weekend over three days. In the Zwelishle Primary school hall, the conference was orderly and had very little impact on the town. On Sunday, Julius held a rally at the sports fields and that went off peacefully as well. We’re grateful and trust such behaviour continues to pervade the run-up to the elections.
  3. Another aspect of the higher asking prices is that sales are taking longer to conclude – about 50% longer depending on where you read. 40 days on the market has moved out to 60 days overall. Again, I bet you the unrealistic expectations of sellers have contributed to this situation. What would be really interesting to see is the number of houses listed and then withdrawn from the market. That trend would tell you how needy the sellers were to sell for whatever reason. On the face of it, “I can’t afford my house anymore” should be rising as the economy remains very sluggish and jobs become more insecure, thus reducing confidence.
  4. Sadly, allied to the “I need to sell” category is higher levels of emigration. One can read very valuable information from the FNB Barometers covering this aspect, but perhaps the most interesting for me is that Police Clearances have moved out from about 6 weeks to 12, and even 15, weeks.
  5. One aspect that drives much of this conversation is the rate of interest and the desire of the banks to lend. The former stayed level last week as SARB, I am sure, attempted to supplement President Ramaphosa’s stabilization package and his envisaged stimulus mega-fund. On the other hand, the banks seem to still be saying Yes to lending and are thus a welcome part of the answer to growth; long may that be! On the absolutely negative side is an apparent helluva increase of petrol coming soon. What a tragedy that the tax on fuel and the VAT increase [which by estimates then, take R29bn out of consumers’ pockets], is simply the penalty of corruption under the leadership of the ex-president and his cronies. Imagine the same increases being ploughed into the Investment Mega-fund for housing, schools, and tourism! What a country we could have!

In summary, we are better than we could have been, in my humble opinion. I often say that as I write and then qualify myself by saying that I genuinely believe that. I have lived through terrible recessions, and this for all of its insidious undercurrent of large-scale theft, is not “terrible” in its outworking. Granted, these are not the “ol’ days” pre – 2008, but they could have been much, much worse for the property industry. My encouragement, therefore, is that we vasbyt. Reiterating my previous blog, our President can pronounce R400bn and maybe we don’t know where it’s coming from but from what I hear from his United Nations conversations, he has acquitted himself well. Remember, it was not long ago that Pravin Gordhan was called back from speaking to investors with R5tn in investment funds on the pretext of a one-pager spy accusation which resulted in Gigagupta being appointed in his stead – WE’VE COME A LONG WAY IN 2018!!!]

I learned an Afrikaans idiom the other day, “Die hoop beskaam nooit.” For the uninitiated, “Hope does not disappoint” [Romans 5:5], or, “Hope does not embarrass you.” On the contrary, hope rubs off on those around you. Enthusiasm is hope internalized and expressed. Remember, if you’re happy, tell your face. We are all more beautiful when we smile and “smile lines” are never wrinkles 🙂

Yours in Property.

MAURITIUS 2018 [Part 2]

In our previous blog, I began writing on the plane to Mauritius with the 2018 Winners. Over the next 5 days, I spoke to them about what it takes to be a winner, some recent in their success and for others, simply a trail of achievement over years.

We continue with the theme…

“She taught me”. Mentorship is a key to many things in management, leadership and business. The fact that a person is attributed with the success of a winner is noteworthy. How many of us are mentioned in the life successes of other individuals? What meaning for both parties is that in the course of our lifetimes; to see the other grow, to experience the dark days and enjoy laughter and prosperity together? Mentorship is crucial to our personal and business wellbeing’s. When I start out as a newbie, I watch and learn by being shown by example and taught through lecturing and then trial-and-error. Slowly, patiently I progressed to maturity in the business – this is what I call the apprenticeship. Just a slow grind of technical competence long before anyone would trust you with their bonds, both estate agent and customer.

I have a number of mentees in my life as the principle of mentoring has always been fundamental to my management. The fun occurs, when over the years, you are surpassed by your mentee; how cool is that? They take on a life of their own, learn skills different to yours and then progress even to be more successful than you, however, you decide to measure that. Truly, a virtuous cycle of life. I’ve found the challenge is to acknowledge when someone is simply better than you and then to just graciously encourage who they have become. One final note, when you have reached the pinnacle of success in your field, you need to teach others. None the least of which if you have the opportunity, those who have been previously disadvantaged. Remember, the essence of greatness is realising an abundance mentality gives everybody a place in the sun; their slice of a growing pie.

Competitiveness should give way to co-opinion as you grow your skills together in the marketplace. Some of us know these truths, whilst some still cower and “defend their patch” and the other final note is a statement that I really like, “Ek like die mense.” Let me sum up this one – if you like people, people will like you. There is no formula equating the two but it is my experience is that a smile begets a smile and an attitude begets an attitude; positive and negative. Think of it this way, don’t you like people who like you? “Passion for what you do” means that you rub off not up and people excite to you and what you have to offer.

Talking about an offering, “process and consistency” came through as the winners spoke about their technical attributes. One person was even more specific, “become more efficient and productive and respond to market changes faster while providing better service to your agents and clients.” That’s saying it like we all need to hear it. For most of the winners, they spoke about administrative efficiency in that their process had become slick and as quick as possible. What this winner is saying is that when your process is efficient, it needs to answer the question, “Is what I’m doing adding a competitive advantage?”

“Service” and “quality of work” were always mentioned in this regard, but have you looked at your competitors and said understood what it is that makes you special. Remember, one of the reasons I harp on about relationships includes the notion of your stakeholders simply knowing that their transaction is safe on your hands every time. You may need to step up to a higher level, understanding what that is, by becoming even more productive. There is a sense of enlightened self-interest in doing that – you work less when your process is optimal and you need only focus on the exceptions rather than applications that follow the norm. My suggestion is that you take a morning to observe your team and see how deals pass through the process; have a group discussion and see how the team could organise themselves either to handle more volume or, just become slicker at what they do. That way, they buy-in and everybody works a little less and agents and customers will love it. In closing, one winner had this to say, “Keep it simple, listen to the customer and know your product.” That’s sound advice on any day.

Most winners did not just arrive in Mauritius 2018. They determined to get there early enough to be considered. In the Conference, one said, “Next year I want to be in the Top 5” and set about some obvious changes: Visit 2-3 more estate agencies per month, new packaging of their offering and solid you management information to form the basis of well-prepared feedback sessions with their lead providers. Sounds easy, hey? And it worked, the business grew significantly enough to qualify. I guess the next question is, “And this year?” Why not just keep up good habits, systems and reports? At the heart of success are goals that drive you.

SMART goals that add meaning, encourage, employ people, impress agents and make customers repetitive. “Luck!” said one winner, just before she smiled and told me “angels on her path” had helped her over the years. Stories of her Dad and his influence on her life and family who had transformed her computer skills, but underpinning her confidence, and even faith, was the reality that she never gave in to giving up; something continued to drive her success. Goals set the upper limit, encourage success and warn of unacceptable performance. Goals focus the mind and secure intentionality until the rewards of success kick in to spur us on. Set some right now – “I’m going to be there next year” is the attitude of a winner. Like your Mom told you, you’ll never know until you try.

No blog of this nature would be replete, without a mention of the leader of this business. Vincent was referred to many times. “Calm, relaxed, not grilling me…a human element” was the description of this quiet yet determined man by on winner. “Mevrou, jy gaan ‘n kantoor oop maak in…”, a powerful comment for the listener; a sense of positive self-expectance and an opening up of possibility and change in an anticipative, encouraging, exciting way. Vincent has a character that, as I said at the final dinner, knows disappointment, determination, relationships and how to privilege others. That’s why he wins as his companies follow his lead. From sub-Prime to Highest Sales Performance: ooba licensee, an award won even while we were away. In typical style, Vincent hardly mentioned it but it’s an unbelievable achievement especially as we face technical recession head-on. Vincent, we respect you and appreciate you. We consider it a privilege to part of the team and to have been in Mauritius 2018, a privilege-upon-privilege. Keep it up for All of Us!

Two quotes that appeared on bed-drops each night are:

“To accomplish great things we must dream as well as act” by Anatole France, and;
“Great things are not done by impulse, but by a series of little things brought together” by Vincent van Gogh.

On that note, think about what you’ve read then decide on your response. You know as well as I do, that reading about winners is much easier than being one, but you can dream and act. You can take little things and bring them together into one big success, even next year and for a lifetime…

Homeloan Junction wishes this upon you. Like the Afrikaans says, “Ons gun dit vir jou”.

Yours in Property


I am on a plane to Mauritius. How privileged am I to be included in a group of Homeloan Junction and Ooba Winners who have shot the lights out in 2017! I did nothing, they did everything to be here.  We have first-timers, people who have never flown internationally before. We have golden oldies, those who have won over and over again and now, have won again. Each has their own story so let’s explore that.

In my management career, I have met winners at the airport.  The most excited are those who have never flown before.  They are nervous to the point of fidgety; will I be safe,  will I return to the one who kissed me tenderly at the airport? Of course, you will say the initiated – just enjoy the flight. Light-hearted, but also caring. And then there are those who are used to winning; the die-hards who have done the hard yards, amazing people who have been consistently successful over years, even decades.  Amazing that!  To do it in one year is good. To do it over and over again takes a different story completely.

So, over the next two blogs, here are their un-named stories and a summary of their critical success factors…

“Success is what you believe in”. Perhaps this is a crux of the matter as I look back on the people I met in Mauritius. They are confident and assertive – there is an air of success about them. They know what they know and find themselves often in the company of winners. You can see it in the way they interact and hear it in their language as they speak to others and together. There is a balance of affinity, distance and a professionalism that is pervasive. They know how to have fun as well; they laugh easily and play appropriately, but they overdo nothing and enjoy the moment. You can just feel, these people believe in success.

“Perseverance and long hours”, says another. Some of this team know what it takes to work 18 hours a day. From early in the morning to late at night, administration with constant calls in between, they set to the task of satisfying customers. You know what it’s like – the young couple have bought their house and they’re starry-eyed as they await bond approval. The estate agent has done the sale and is counting the commission. The developer needs 70% successful sales/bond approvals for the development loan. You have your own office costs and need to build relationships. Little wonder that perseverance and long hours are needed, not just in the short-term but as a daily habit. We all know that over time, this hectic pace dissipates as a general rule, but every now and again, the need for huge effort raises its head. These winners have ceased wondering when it will stop; instead, they lift their game when required, every time.

“Niks, I just go with the flow.” I know this lady well and she is not a Niks kind of person. What has happened here is that decades of service have done two things – cemented relationships, and generated repeat business as a significant part of her income. She did the hard work years ago and has skilled herself through thick and thin to deal deals with the estate agents and the banks. She knows her oats and doesn’t submit what will not be approved; she’s efficient, values her time and that of others. On the other hand, if anyone in that process disagrees, they could cop the lip that comes with 20 years of experience. For the uninitiated, the matter of apprenticeship comes to the fore. You don’t study to do homeloans and your BCom degree means little if it has not taught you some property law, finance, credit, banking, administration management and then overlaid that with huge dollops of inter-personal skills. You don’t get to quip “Niks”, if you haven’t done the “Baie”.

Relationships are built over years. It is often said that a relationship takes years to build and seconds to destroy. I would add that where money is involved, that formula speeds up. Making my money through consistency and quality of work is good for relationships; a kind of “spice on the top” of commercial associations. But one lie, one un-met promise, or, one poorly managed expectation, can turn your relationship into a nightmare. By the way, but for the first malady which can often be terminal, the others can be dealt quite efficiently by what I call “emotional reserves”. These reserves are built over time and can be likened to a petrol tank’s gauge. Trust, care, friendship, efficiency, feedback are all ways to build emotional reserves that fill the tank of a relationship.

A mistake may use up some of the supply, but can be accommodated from the relationship’s reserve. This may sound a little “soft” but all relationships, personal and business, where emotional reserves have been built up can then be used, by saying sorry or committing [and keeping the commitment] to do better next time. Winners manage expectations and then even in the face of bad news, have a positive approach to an outcome. How often have I myself, told a customer they are flying high in terms of their credit request and then managed them through the decline of the bank to a more realistic application. By the way, another thing here is the question of credit terms. A customer’s lack of knowledge of banking can lead to the question, “Will you get me the best rate?” My answer, “No, but I will get you the best credit terms.” What is the good of Prime – 0.5% with a deposit of R100000 if the deposit does not exist or, was destined to be used for TLC of the property? Prime + 1% may be far more acceptable with no deposit under these circumstances. Don’t get caught up-front in pricing as the bottom line of your service; you’re better than that.

“Origination is entrepreneurial and gives you an opportunity.” I guess this goes for any self-employment though it never feels like that when you’re building your business. But as the years go by and your competency and relationships strengthen, origination is a really nice business to be in. It gets you out, gets you in, and gets you going. Office jobs are crucial to service delivery, but marketing gets you face-to-face with the customer and interface with the stakeholders; it gets you out. It gets you in, into suppliers, interesting projects, opportunities for value-adds and serious negotiations. These are the places where long-term, solid relationships can be built and sustained. And, origination gets you going; every day and continuously. Perhaps one of the cutest comments in my interviews with the winners was simply this, “I won’t change my job!” Not for anything; that entrepreneurship and opportunity talking and from behind a broad smile.

On the other hand, it takes a “wild ride” to leave a stable job and come into this crazy world of property and bonds. None of the winners found it easy but they figured that origination, with its value-adding benefit to the customer absolutely free-of-charge, was the way to go. “I wondered how I would survive” was almost common to all the newbies in Mauritius. It takes a strong cocktail of self-belief and courage to walk away from the known into the unknown. Just like any business venture, you will have days of doubt and days of elation, but what our winners know by their success is that “origination is for me.” Just a point on the taking and managing of risk. Consider the risk carefully, consult wise counsel, be fairly sure of your ability to succeed and why. Wait to build the skills and/or contacts if you do not feel ready, but once you jump, then begin to manage the risk.

Start within with positive self-talk and surround yourself with winning combinations of people and processes so that you give yourself an undisputed chance of success. Like the old saying goes, “you can’t fly like an eagle with turkeys like these.” If that’s arrogance talking, get off your high horse, nobody likes a smart-ass, but if you do not have the right people on the bus, get the right people – you can go out and compete in the marketplace every day but you better have a strong, competent team behind you. You cannot fight a frontal and a rear-guard action at the same time. Think about this, it’s absolutely true. Indeed, a critical success factor.

More to follow in our final part to Mauritius 2018…

Yours in Property.


Okay, just before you think I have the answer to my question, here are two extracts from two leading banks as of June 2018:

Bank#1: “Therefore, the signs are increasingly pointing to an even slower average house price growth year in 2018, than in 2017, and possibly the 4th consecutive year of house price growth slow down, despite recent mild growth acceleration.”

Bank#2: “We still see 2018 house prices stronger than in 2017 due to the turnaround in business and consumer sentiment as well as gradually easing credit conditions.”

So the answer to my question is simple, “I don’t know!” OR, “Eish!”

Of course, one should be grateful for the freedom of the Press and the competition between the banks. Either, or both, would allow for such disparate views between the banks and no doubt, economic models and sentiments have been incorporated in these views.

To the latter point, B#1 has a more jaundiced view of the future than B#2. B#2 continued to say, “We are, however, slightly more cautious in the short-term but remain convinced about longer-term improvements. We maintain our view that building and purchasing activity, relatively subdued in the last year, will benefit from the upswing in business and consumer sentiment. Indeed, data already indicates signs of improvement, with year-to-date to April volumes of building plans passed rising 18.8% above their 2017 levels in the same period.”

Readers of this blog know my views on Perspective. I’m not humanist in these views, but I do contend that a positive perspective has a far better chance of positive results than a negative one. So, if there were a vote, this time I’d vote for Bank#2. In fact, really little difference exists between the banks’ reports on the House Price Index other than their statistical methodology creating slightly differing percentages. Here are the relevant extracts:

Bank#1: “On a year-on-year basis, the B#1 House Price Index’s growth rate continued to accelerate mildly in June 2018, reaching 4.1%, up from a revised 3.9% in May, and the 4th consecutive month of growth acceleration since the 2.9% low point reached in February 2018.

In real terms, however, when adjusting for CPI (Consumer Price Index) inflation, house prices remain in decline. As at May 2018 (June CPI not yet available), real house prices declined year-on-year by -0.5%, with CPI inflation at 4.4% in that month and house price growth at 3.9%.”

Bank#1 has this to say by way of explanation, “We believe this recent mild acceleration in house price growth to be the lagged impact of that brief sentiment improvement in the country early in 2018 on the back of the major political leadership changes in the country, notably a change in President. That sentiment improvement led to a noticeable 1st quarter increase in residential market activity and demand and this has arguably fed through into price growth of late.”

Bank#2: “B#2’s HPI has retreated further, to 4.4% y/y in June, from 4.9% in May (revised from 4.8% y/y), dragging year-to-date average annual growth to 4.9% – virtually flat from the annual average growth of 4.7% in 2017.” For the sake of comparison, B#2’s CPI in their report is 4.2% and this results in a 0.2% real growth in house prices for year-on-year, June 2018.

Like any good economist, B#2 preface any possible over-positivity with this comment, “Much will depend on how much sentiment translates into investment and, ultimately, higher employment levels.”

Two major banks assessing the same data and coming up with very similar results but with different outlooks.

Let’s just analyse B#1’s comment on the lag effect of good news, termed, “that brief sentiment improvement”. Essentially, CR’s election to President caused such a stir that housing activity lifted and estate agents were busier and sellers achieved their prices and banks lent buyers the money. I fully agree with B#1’s sense, though I imagine, the first quarter is generally better as we all return from leave and transfer to new job opportunities etc. This fact makes you think though, and I’ll close on a possible scenario allied to this. In the meantime, turning to B#2, their more positive perspective is that CR will, in fact, be able to lift economic output and thus sustain “Investment and, ultimately, higher employment levels.”

If I look at his successes in Saudi Arabia and $20bn being invested in Energy and Trade, and many of the other initiatives that his government has achieved, I sense that he could make a difference. And of a truth, probably nothing could be worse than the captured state we were in before his election. The issue, given the incredibly high stakes economically, is “how much better” rather than “whether better”? These points bring me to a close. To put you out of your misery, the banks are FNB and Standard, respectively. On the lighter side and to Standard’s kudos, they mention, “We expect a gradual easing of credit standards this year and next, alongside moderately improving consumer affordability matrices.” “Yes pleez!” I hear you All Cry.

Soberly though, the question posed is: Where are we? The writer’s view is simply that we are in better shape than we would have been even though the house price growth is marginal in nominal or real terms. The fact that it is anywhere near positive in real terms, is a tribute to Inflation management by the SARB’s MPC. The recent holding of the interest rate in the face of inflationary pressures from the Rand and Oil, and backed by Standard Bank’s view that “the SARB is likely to keep interest rates unchanged over the next 12 months”, is great news. But the question remains as to what would recover that sentiment that “led to a noticeable 1st quarter increase in residential market activity and demand” and cause it to be maintained?

I have no research department behind me, but I put to you the following: To sustain an encouraging level of housing activity and price rises, South Africa needs 2%-plus growth for 2 years after an initial pick-up period of 6 months. In essence, it is my view that we need Ramanomics and not just Ramaphoria to sustain a higher level of confidence and property economics. I think we have a shot at it and Lesetja Kganyago, the SARB Governor, projects 2% economic growth in 2020 off 1.7 – 1.9% growth in 2019. Now I trust, that’s got you thinking!

Bottomline, we remain hopeful.

Yours in Property.


I called a friend of mine in Sydney for his birthday and found myself in the inevitable conversation about property. “What’s happening to property in Sydney?” was the question. I almost heard, “Eish!” but seeing he speaks Australian now, it was more along the lines of, “Shew! Bad…Mate” We spoke about Cape Town being a proxy for Sydney – high performance prices over a long period of time but now tailing off quite rapidly.

Then my wife showed me an article about Bo-Kaap, those beautiful painted houses in which the oldest Muslim community in the country live. In reading it, I decided to title this blog, Something Different. You see, in this country of ours there are always pro’s and con’s, swings and roundabouts, and contradictions. With protests again in Hermanus, it feels like we’re always on the edge and never quite sure of what is going to happen.

But you know that! You’re in the property business

Coming from the Cape[town]etc website, the following extract:
“Long standing local residents of the Bo-Kaap are clamouring to hold onto their homes as property rates increase and investment markets turn on the heat in order to obtain their houses.
Bo-Kapp is nestled in the corner of the City Bowl and offers an authentic Cape Malay cultural experience right in the city centre – it is safe to say that Cape Town would not be the same without this ironically vibrant neighbourhood.

Well-known for its rich history and culture, Bo-Kaap is a place where many residents inherited their homes.  With recent developments along the area, Bo-Kaap is becoming prime real-estate and international investors are bidding to obtain property or land in the district. Property has obtained a higher value than ever before, causing property rates to increase rapidly. Locals are unable to keep up with the increasing property rates as their wages account for the bare minimum. Combined with the increasing gentrification and opposing protests, residents fear losing their homes along with their heritage as Bo-Kaap is one of the oldest Muslim communities in the country.

International investors are focused on the property value and numbers. Many buyers are interested in purchasing the house, flipping it and selling it to the highest bidder. A lifelong resident, Shamil Jassiem shares his grievances with GroundUp, ““Investors are not interested in you and your history and your culture. All they want to do is buy the houses, renovate them and sell them for more a year later,” In a world where we are increasingly alert about strangers, the Bo-Kaap offers a sense of community that echoes the principle of ‘ubuntu’ – where residents can rely on one another for a helping hand. “I will never leave this place because everybody knows everybody and it’s a safe place to stay” says resident Faiza Larney. At the age of 68-years and retired, residents such as Larney are having to pay property rates that amount to R 6000.00. Larney’s only source of income is her pension which amounts to R4300 both government and private pension are included in this. Property rates do not include water, electricity, sanitation and refuse collection – meaning that residents must fork out more money that they do not have. Many residents are currently in arrears with their rent causing the option of selling tempting.

Properties have risen in value by 11 – 12% annually over two decades with property being purchased in 1999 at R200 000, now valued at R1.3 million. The overall increase in value can be attributed to the method of marketing, geographical location and beneficial investment output. Chairperson of Bo-Kaap Civic Ratepayers association Osman Shaboodien shared, “Property sales are spurned by marketing. Bo-Kaap for instance is sold as a quaint, historical place with cobblestone streets and old Dutch houses.” The people of Bo-Kaap are now faced with a daunting situation – to sell their house, heritage, history and culture for financial comfort or turn away buyers and work more than one job to cover the basic costs of staying in their homes.”

We have been talking about the Cape Town market slowing down but here pops up an article that investors are still hunting for and finding value. We had a cooking lesson in one of these houses for a friend’s 60th birthday, and I can tell you the Bo-Kaap is beautiful, friendly and quaint. Not a reason in the world that if these little homes achieve R1.3m in the market that you would not want to renovate a few and rent them to young professionals who work in the City Bowl. Big returns at that price, so I can understand the problem and even, the dilemma, residents may have.

Now, some interesting news from Sydney. Remember in Australia, homes are not sold by agents but rather auctioned. As a guideline, 90% are auctioned there as opposed to 90%+ here that are sold by agents. That explained, this weekly report I received from my friend, talks about Clearances – this is the term used for “sales on auction” over a weekend and imply that if there were a 100 houses listed and 92 are sold on auction, then the Clearance would be 92%. This example is exactly, according to my friend, the Clearance figure 18 months ago. In other words, 92 out of 100 auctions achieved a house sale; imagine that demand!

But times have changed and last night’s [10 July 2018] Clearance Rate was 53.53% on 673 Total Scheduled Auctions in New South Wales, the province in which Sydney resides. In other words, Australian auctioneers [read: estate agents] have experienced a 92-53 = 39% decrease in sales and I bet, the house prices have also declined concomitantly. That, in 18 months. I’m not sure that you have experienced anything like that anywhere in South Africa; I certainly hope not! Mind you, I was also comparing house prices with my friend and in that regard, I have another friend who has just sold in Hermanus within walking distance to the beach for R12m. He has purchased a similar sized house within similar access of the beach and he paid R35m ie A$3.5m. That’s three times the price in Rands. And, just by the way, I see the interest rate advertised in the report, is 3.69% variable. That’s three times less than our rates.

Moving on to house price increases, the report is also quite insightful:

Demand for all property across Australia has increased 5.2% year-on-year with houses increasing at 7.8% but apartments decreasing at -1.2%. The report continues, “The housing market slowdown in Melbourne and Sydney is dominating headlines, but the reality is the market is highly divergent. On one hand, Sydney prices have declined by 7.4% year-on-year, while on the other extreme, Hobart continues to surge, with prices rising by 16.1%.

Sydney is experiencing the biggest drawbacks. Melbourne is still holding. Pricing is up year-on-year and although activity among offshore buyers is cooling off, foreign investors are still actively looking for properties in the city. Softening market conditions are now starting to take hold and, surprisingly, given the widespread concern about apartment over-supply, in relative terms, it is housing demand that has weakened more. While Melbourne and Sydney slow, demand is creeping up in Perth. Although prices are still down year-on-year, the increase in demand is now the third highest in Australia, after Hobart and Canberra. Brisbane is experiencing similar increases, also suggesting that the tough times are over in the city, which is consistent with recent jobs growth numbers.”

And, final thought about the factors causing much of this reduction:

“Generally, across Australia, the premium market is holding up better than more affordable locations, however it is too simplistic to say that it’s the only market doing well. The strongest suburb over the past 12 months was Tamarama in Sydney’s east, which saw a median price increase of more than $1 million. [That’s R10m! In one year!!] Looking ahead, the housing market in Australia is under a lot of pressure, which will cap price growth everywhere. The reasons for this are varied.

Fewer offshore investors: Last year, new taxes were implemented in many capital cities and Foreign Investment Review Board applications dropped dramatically. Foreign buyers are still interested in Australian property (we continue to see growing numbers of Asian property seekers looking in all capital cities, except Sydney and Adelaide), however they are not transacting. While the new taxes are partly to blame, a change in sentiment has also occurred. There is also less development taking place (foreign buyers are restricted to buying new properties), as well as fewer Chinese developers. Property is now on the restricted list in China and more often than not, Chinese developers tend to sell back to their home market.

Fewer local investors: Investor lending has dropped by 15% over the past 12 months and sentiment of local investors has changed. A lot of this has to do with problems related to getting finance (far more restrictive and more expensive), but many of the incentives that investors got on off-the-plan developments, for example, are no longer available. The beginning of price declines is only worsening the situation.

Financial Services Royal Commission: This is currently underway and although it won’t be completed until late this year, banks are already starting to restrict lending on the back of what they expect to happen. The biggest impact right now is greater scrutiny of potential borrowers’ spending behaviour. [ed. I’ve heard that somewhere before ] Previously, banks mostly accepted what people said they spent at face value, however they now require more proof. Interest-only loans have also been restricted and many investors had relied on these. It is likely even greater restrictions will be put in place over the next 12 months.

Mortgage rates: Australian rates aren’t budging but US rates are increasing. Australian banks raise about 20% of funds that they lend to Australians from wholesale markets, so this is impacting mortgage rates already. Add in an interest rate rise and we will see less money being borrowed, as well as lower levels of interest in buying a house.

Change of government: A federal election will happen in the next 12 months and changes to negative gearing have been flagged by the ALP. This would have a big impact on the market, with an expected decrease in prices of about 10% in Sydney and Melbourne, according to Riskwise and Wargent Consulting. If markets are already weak and dropping, this could have a dramatic impact on investment levels and, subsequently, prices.

The likely outcome over the next six months is continued moderation of pricing in Melbourne and Sydney, while our other markets will hold up a lot better. Predictions that median prices will decline by about 10% seems a bit light in Sydney, given that prices have already dropped by more than 7%. Melbourne is likely to see declines this year, however, at this stage, it is unlikely to be as extreme as in Sydney, particularly given that on a year-on-year basis, we are still seeing a very slight increase.

On the positive side, the Australian economy is very slowly heading back to growth mode and as the development pipeline has slowed dramatically, particularly for apartments, this means less property will be available to buy. These will provide buffers to negative changes in the market, something that was not occurring the last time we saw big declines post the Global Financial Crisis.”

Just, by the way, the median [read: most often achieved] price in Sydney is A$925000 or, wait for it, R9.25m. No wonder, even at 3% interest, the market is adjusting.

Something Different, indeed! And when you read the reasons for the changes, if you closed your eyes, there wouldn’t be too far a difference to our reasons. Government change struck me and are we expecting that quite soon. However, banks tightening lending and the Financial Services Royal Commission [What a mouthful; sounds so British! Just read: National Credit Regulator] automatically adjusting spending patterns of applicants to avoid over-lending, is pap and wors in our mortgage space. The Chinese influence is very interesting and simply resulted from mega-rich Chinese buying practically whole developments and then loading unit prices by A$100000 only to sell to the locals for enormous gain. The Aussie government stressed out [that’s an election issue in the modern economies] and got the Chinese government to stop approving offshore monies going into such ventures.

In little ol’ SA we have our problems. But so far, we have held our own. The list of headwinds would be similar and the interest rate may rise even this year. I stand by my prediction that SARB will hold the rates fearful of curtailing growth and therefor, employment. Time will tell.

Hope you enjoyed Something Different. Good to see that other countries are struggling and that we are not unique. At Homeloan Junction we plough ahead. No time to put your head in the sand, but rather to Stand Tall with positive self-expectation. We have a proud history and we intend to keep our yesterdays on the same trajectory.

Yours in Property.


Just an opening comment about Ramaphoria. How cute we are as a nation to adopt words like Rainbow Nation, Zumanomics, and, our latest euphemism, Ramaphoria. When we give it a name, we somehow settle back into our armchairs and watch Chicago Fire. Without a name, we stress. Ramaphoria was never going to last. So, we should not make it “the next big thing” to complain about. I have asked a friend to correct me whenever I moan about the country and my reason is simply this, if you think that Ramaphosa is moving too slowly and we should be arresting more people, getting more money back and recapitalizing the SOE’s faster, never forget you could have had Mrs Zuma and a horrible catastrophe as Eskom breached the fiscal cliff, the Rand collapsed [I mean COLLAPSED] and every scrap of international investment left our shores.

Listening to this morning’s Talk Show, Cas Coovadia of the Bank Association of South Africa, was speaking about the willingness of the Banks to support a restructure of the SOE’s. “They have been robbed and now we’re expected to risk our savings to bail them out”, one Caller lamented – but just imagine if the President didn’t have the ears and brains of the bankers and other relevant parties to turn this mess around. Yes the ANC allowed Zuma to run wild but at least, some self-correction is creeping back under very difficult circumstances for those willing to be tasked with the unwind of State Capture. It was all too frightening to consider but thank Goodness the Good Guys won and we have a chance at Hope and Reconciliation again. It could have been worse, MUCH WORSE! Don’t lose Hope and when you have it, Encourage Others – you could see it as your National Duty. You can never build anything focused inwards; it’s outwards or bust. Look Up, Look Out and make yourself, drag yourself if need be, to be part of the solution.

I often refer to John Loos and I like the manner in which FNB brings the estate agents into the picture. I know you read the Property Barometers so forgive me for extracting from them, but they do allow me to make some points which I hope you find valid. In this blog, I refer to three latest Barometers……

Early signs of the positive national sentiment shift impacting on national house price trends

This was the headline of May’s Property Barometer and it continued to say:

“May 2018 saw the FNB House Price Index growing by a faster 4.6%, year-on-year, up from the previous month’s 3.8% in April, and from a February 2018 low of 2.8%. This 3rd consecutive month of house price growth acceleration is an early sign that significantly improved sentiment in South Africa early in 2018 is beginning to impact positively on the housing market and house price growth.”

So there we have it, SA Inc set off like a steam train and house prices were rising significantly. But was it realistic and sustainable? Realistic? Yes, but simply because we all took a huge breath of fresh commercial and confidence air from the ANC December conference and we were willing to pay the price asked by Sellers. Sustainable? No. You can’t turnaround the wounds of State Capture in three months. To think you can is puerile.

But we continue: “Strengthening was witnessed in our own FNB Estate Agent Survey, with agents reporting a significant jump in residential market activity in the February 2018 quarterly survey. Further support for the perception of a strengthened Housing Market in the 1st quarter of 2018 was provided by a shortening in the estimated average time of homes on the market prior to sale, from 17 weeks and 2 days in the final quarter of 2017 to 14 weeks and 1 day, according to the Estate Agent Survey.” 

In other words, our “window to house prices” was telling us we were motivated to buy and pay the price. In conclusion, FNB says, “2018 is expected to be stronger on the back of a further small interest rate reduction as well as leading indicators having pointed towards further strengthening in economic growth as we’ve moved into 2018. We thus expect average house price growth to be in the 5-6% range for 2018 as a whole, which would imply some mildly positive real house price growth given the FNB CPI inflation forecast of 4.9% for the year.”

I agree with John, we could see a positive house price growth this year. The reason is that despite some recent news around Inflation and interest rates and the usual politicking, we will have a better year than last year. Surely, it can only be better!?

Now we return to our “window”. I have a high regard for the estate agents. In our economy and property market, they are the front line of property sales. They have and need the skin of a rhino and the hearts of a saint in order to traverse the minefield of Buyer and Seller negotiations. On their behalf, FNB proceeds to say that: “they perceive the sentiment “spike” from the early-2018 political leadership changes to have passed through, and it is back to “business as usual” in a weak economy. On a national average basis, the 2nd quarter 2018 FNB Estate Agent Survey showed a noticeable lengthening in the average time of homes on the market prior to sales, pointing to a renewed housing market weakening in terms of housing demand relative to supply. This is reflective of “Ramaphoria” tapering off.”

I accept that they are right. Humans like us, they could have felt more enthusiastic going into 2018, but that aside, the numbers are telling and don’t lie. The “average time of homes on the market lengthen noticeably, from 14 weeks and 1 day in the prior quarter to 16 weeks and 4 days, reflecting improved housing demand relative to supply in the 2nd quarter’ and, “from a previous quarter’s 91%, the percentage of sellers being required to drop their asking price to make the sale also increased to 96% in the 2nd quarter of 2018” and by an average drop in the Sellers’ asking price from “-8.2% in the prior quarter to -9.2%” in Q2:2018.

You can read the rest of these Barometers, but to sum up, the estate agents are telling us that there is not a stock problem generally and that negotiations are hotting up and Offers being accepted at a slightly lower price. It would be foolish not to accept that this status quo does not mean a slowdown in the housing market. 

But really, despite the news mentioned above around pre-election [I really hope] politics, Inflation and the possible rise in interest rates to protect the inflation target bands and the Rand [read: your petrol price], we are doing well under the circumstances. I wish I could wave a wand and “talk it up”; I cannot. But going back to my opening comments, we have no idea how bad things were and how terrible they could have been for every one of us; especially the Poor and the Unemployed.

Telling people that things are not as bad as they could have been always feels like a cheap shot from me. But, from my heart and the commercial heart of Homeloan Junction, we have the opportunity to rebuild and to restore, opportunities for jobs, housing and things that matter to common people like us. Do I sink back in my comforter unaffected and at peace? No, not really. But, on the other hand, I can see that once again SA has dodged the bullet – may I say, miraculously?  – and we have leadership that is fighting our way back against the odds. Whilst my hope does not ultimately rest there, it is a damn side better than anything I could have foreseen.

Like success, hope breeds hope. Have it and share it; it’ll be good for You.

Yours in Property.


It is not profound to say that good news is better than bad news but, my goodness, the statement in property that there is some good news is very profound. The reason, as we’ve discussed many times, is that Confidence is the primary yeast of mortgage book building and mortgages mean house sales. In addition, in this blog I have nailed my colours to the mast and said that Gauteng is on the verge of increasing house price movements. Good news, obviously followed up by business activity, will change the shape of Gauteng house prices. The sleeping giant will arise in my humble opinion and, in turn, Cape Town will slumber for a season. In the former, house prices are too low to represent value and in the latter too high to represent value. Put incredibly simply, selling a house in Joburg and trying to replace it in Cape Town is well-nigh impossible. I have two friends [sad hey? – just joking], who are experiencing this big time; the one Joburg to Cape Town and the other, even in KZN’s North coast developments.

This trend is highlighted in the latest FNB Property Barometer: 1st Time House Buyers. John Loos reports:


We find Gauteng still to be the strong 1st time buyer region on the one hand, and Cape Town to be the very weak 1st time buyer region on the other.


Greater Johannesburg had an estimated 1st time buyer percentage of 21.59% for the 2 quarters, and Tshwane Metro a massive 30.75%.

In the 3 major coastal metros, Ethekwini Metro had the highest rate, i.e. 20%, Nelson Mandela Bay a weak 10.5%, and Cape Town Metro a very low 6.46%

These major divergences partly reflect diverging home affordability trends in recent years. We believe that slow house price growth in Gauteng over the past decade or so has greatly improved home affordability (average house price/average household income ratio), whereas at the other end of the spectrum, Cape Town’s home affordability has deteriorated significantly during recent years of greater market strength and strong house price growth.


In short, FNB is saying that new homebuyers can’t afford the prices in Cape Town but can afford the slowed down prices in Joburg. Extrapolate that fact a few layers upwards and the middle+ markets, who are baulking at Cape prices, are seeing value in Gauteng. Really glad that we have this green shoot confirmation of above-average rising prices in Gauteng; a stance this blog has taken since December especially.

And here’s a stab in the same direction – the national GDP growth rate is going to be at or near to 1% for 1st Quarter 2018. May be naive but we should not underestimate the force of positive news on our economy.

A person who I have not had the privilege of meeting but who I admire through the Press is Andrew Cantor, CIO of Futuregrowth. Futuregrowth is a huge investor in Commercial and State Owned Enterprises [SOE’s]. It was Futuregrowth, with other significant players, who eventually refused funding to Transnet, Eskom and that other cash-eater, SAA, in 2016/7. Thankfully, we have not yet experienced the dire predictions of those times and may it remain so. But Andrew has written an article entitled, It’s not so gloomy in SA, in Financial Mail, the main points of which I share with you as an extract:

It has become all too easy to overlook the positive forces that have been at work in the country in recent years, and to underestimate the potential that exists for positive change.

It is my belief that SA has many core strengths and that its challenges can be met. I am comfortable, on a daily basis, to invest pensioners’ savings into this country.

We all know the bad news. So, to explain my confidence, I’d like to offer some perspective.

SA has witnessed a remarkable political change: a new president, new cabinet and clear evidence of a crackdown on corruption.

The Futuregrowth credit team has, since the fourth quarter of 2016, been in engagement with the six largest state-owned enterprises about issues of governance. We found that four had reasonable governance structures and practices and, subject to certain changes, we recommenced lending to them. Eskom and Transnet have been at the centre of serious allegations and these are being investigated through various parliamentary and judicial processes. Our analysts continue to be in discussions about governance and improved disclosure with both these organisations and are finding them co-operative. We have not yet recommenced lending to either.

As we look back, there are some very positive signs despite the past difficult decade:

  • SA’s constitution and judiciary have stood the test. The principles of the constitution were defended repeatedly by a free and independent judiciary.
  • SA’s incredibly free press played a critical role in creating a channel for truths to be aired and for the public to become aware of the problems.
  • Democracy itself has played a key role. The ANC suffered meaningful setbacks in the municipal elections of 2016, and the mood of the electorate was a clear warning that change for the better was vital for the party and the country.
  • Civil society found its voice through whistleblowers, e-mail-leakers, writers, academics, entertainers, financiers and others.
  • National treasury is the linchpin of fiscal control, and has a strong culture, with many dedicated professionals.
  • Often forgotten, the Reserve Bank has constitutional protection, a clear mandate and independence.
  • And SA has a large, professional and ethical investment community with a strong pension fund investment culture, legal frameworks and regulatory oversight.

As a bond investor, I deplore the weak standards in SA’s listed corporate bond market. However, that perspective can do an injustice to SA’s very strong equity market and its remarkable government bond market. Both are world class.

And we are in a unique historical position to effect positive change.

Despite good global growth in recent years, domestic mismanagement has undermined fiscal accounts and economic confidence — resulting in low domestic growth, credit-rating downgrades, and worsening inequality.

That said, the economic outlook is brightening:

  • While GDP growth estimates are still pencilled in at between 1.5% and 2% for 2018 to 2020, the rise in confidence gives a likelihood of materially better outcomes.
  • Domestic inflation remains subdued, offering scope for monetary policy flexibility.
  • We expect better fiscal control and growth to stabilise SA’s credit rating.

As we approach the 2019 national election there will no doubt be comments and cross-winds. This may be unsettling, but during my 28 years in SA good sense has ultimately prevailed.

Shew! If that does not encourage you, nothing will. Bad news will always be there. Just had lunch with British people and they are concerned about Brexit and would love to live here; how’s that? Andrew’s perspective lifts us from the gloom and places us in hope.

Do you do that daily where you touch the lives of Others?

Yours in Property.

PS – if you are looking for experienced and professional assistance with the home buying process, Contact Homeloan Junction – They take care of all the steps so that you can focus on what matters most to you.