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:
- It could be as simple as a rebound from a long period of inactivity.
- It could be that people have done the sums at a 7.25% Prime and found bonds affordable for them.
- 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.