Another high profile figure in the real estate sector, Tony Clarke, MD of
Rawson Properties, has reacted strongly to recent media statements
suggesting that the South African property market is in serious trouble.
The statements were, he said, based on no verifiable data and had been
completely unjustified. Our whole reputation depends on our giving buyers
and sellers accurate information so that they can make appropriate
decisions and this applies to all the major agencies. Most of us at this
stage in SA's history accept that a temporary slowdown in economic growth is
inevitable but most of us, again, see a great many reasons for the
continued positive outlook.
Right now, said Clarke, home sellers and buyers are at last adjusting to the
realisation that the heady price growth figures of the last few years are
over and that they will have to trim their sails. This in itself, he said,
is not all bad, because in the current scene buyers are being offered more
choice and are able to negotiate competitive prices within the more
stringent limits set by the NCA.
For some months, said Clarke, we saw buyers hanging back, waiting for
sellers to drop their prices. For many that waiting period is now over
they are moving in again in the belief that the market is bottoming out and
that, if they do not buy now, they may well find themselves paying more
later on, because property prices are still increasing albeit at a slower
rate than before.
If they are making use of bond finance they also now realise that with
further possible interest rate hikes later this year they will almost
certainly not qualify for the bonds they can now get.
The really fortunate buyers are those with accumulated resources who can
now climb in and get a good bargain, he said.
Many of our investors, encouraged by the higher rentals now obtainable,
realise that this is a good time to buy and those who have watched the
market carefully are making full use of the excellent deals now available.
Potential buyers who are still holding back in the hope of even more
favourable conditions may well find that they have lost out.
Among many good factors working to the benefit of the SA property market,
· the latest World Bank Report which predicts a 4,2% growth rate for 2009
and which says that high inflation, a weaker rand, fewer supply problems and
an unsatisfactory balance of payments scenario have been more than
counterbalanced by SA's wise fiscal policies. These, said Clarke, have
resulted in huge reserves now being available for infrastructural and power
station development and in a well-timed curtailing of irresponsible consumer
debt (through the National Credit Act);
· the wakeup call given by Polokwane, by the attacks on foreigners and
by other pockets of unrest, to the government to get on and be more
proactive in providing housing, better schooling, training and job
· the Memorandum of Understanding between the major banks and the
government which for the first time makes it possible to finance low-cost
housing on a large scale without huge risk. Even under the present
difficult conditions, buying of low income homes continues at a higher level
Looking at the residential property scene as a whole I remain confident
that house prices in certain areas will continue to show double digit
growth. My prediction for the average growth for SA housing until the end
of 2009 is still between 4 and 6% which, of course, in real terms is no
growth but is highly satisfactory in view of the country's economic
conditions right now.