Eight weeks ago Bill Rawson, Chairman of Rawson Properties, said that, while it could take as much as a year for the turnaround to become fully evident, the SA residential property market had bottomed out and could now only improve.
This prediction, it now transpires, is becoming a reality, according to a company media release: Rawson revealed this week that his group, which has 140 franchises nationwide, had bounced back from a low in May / June to record a 250% increase in sales in September.
“At this stage,” he said, “I think our group is one of the very few which can report such a turnaround. Many smaller agencies are still going under and agents are still leaving steadily: the national figure for registered agents is now down from 85 000 to 55 000.”
Rawson attributes the company’s improved trading to political and economic reasons. “There is now a widespread belief that although interest rates are likely to decline, further rate increases are also unlikely and this has had a noticeable stabilising effect on the market.
“Also,” said Rawson, “although there are big questions about the direction the new political leadership will take and exactly how the ‘fairness to all’ dispensation will play out, the change in leadership has been well handled. It is also recognised internationally that the constitution-related way in which the President stepped down reflects a certain maturity in our politics today which has certainly not been typical of many African countries to our north.”
Added to these positive factors, said Rawson, is the fact that the new interim President has already shown an awareness of South Africa’s economic realities and has won a large measure of confidence from the business sector. In particular, said Rawson, there is now a widespread hope that the new ANC, even if it does split, will be far more effective at speeding up the delivery and ensuring that those sitting with large unspent budgets either get on with development or are thrown out of office.
Rawson believes that SA is now in a position to ride out the international financial turmoil because of wise fiscal policies have resulting in the treasury accumulating large funds for spending on infrastructural development. Furthermore, said Rawson, our banking system had been better regulated than those of many of the First World nations and was not overexposed to toxic debts. The National Credit Act, he said, had come just in time to prevent many middle-class South Africans from becoming over-borrowed.
“It is particularly encouraging,” said Rawson, “that many South Africans are coming round to accepting the new price structures in the property market. This often involves scaling down but the big increase in large deposits taken by our group recently (often 20 to 30% of the sale price) reflects the fact that buyers are scaling down.”
Rawson franchisees, said Rawson, were still being sold at a steady rate. This year over 20 new franchises have been signed up and although some of these were resales where the new franchisee had proved unsuitable for real estate marketing, the group was in a strong position to expand from its current base.