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: Rawson revealed this week that his group, which has just over 140 franchises nationwide, had bounced back from a low in May / June to record a 250% increase in sales in September.
Rawson did, however, make the point that this upswing was no means universal and that his company was possibly unique in this respect.
'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'
Asked to what he ascribes this success, Rawson gave both political and economic reasons, he said that 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 Africas 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.
Asked how the international financial turmoil will impact on South Africa, Rawson said that we are in a position to ride it out because wise fiscal policies have resulted 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, although not welcomed by estate agents, 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'
The economic upsets of the last year, said Rawson, have not phased the Rawson management because they have been through similar tough times previously ('Many of us have over 30 years in the property industry') and know how to handle difficult conditions.
'It is quite clear, however, now that many of the younger companies have absolutely no experience of tough conditions and are suffering as a result. The well trained, well resourced teams are now coming to the fore'
Ongoing branding and marketing, with increased emphasis on sophisticated customer related IT systems, ongoing support for franchisees with training, advice and encouragement and upgrading of all the support systems (again, particularly those that are IT related) are the factors that are taking the Rawson group forward, said Rawson.
Particularly relevant in todays market, he said, are the facts that the Rawson franchises are strong in the middle- and low-cost market, which is where most of the action now is and that Rawson franchises can be low cost operations.
'It is quite possible for an ambitious but under-resourced agency to operate from the principals home for the first year or two,' he said.
Rawson franchisees, said Rawson, are still being sold at a steady rate. This year over 20 new franchises have been signed up and although some of these are resales where the new franchisee has found that he is not suited to real estate marketing, the group is in a strong position to expand from its current base.
