Rawson Properties is weathering the current low state of the market better than most estate agency groups because they have a strong presence in the lower cost housing areas, says Rob Lawrence, Business Development Manager at their Newlands Cape Town head office.
Roughly 25% of the Rawsons sales are in areas where prices are below the R600 000 cut off point and the 'action' is still very satisfactory here, says Lawrence.
'In the sub-R600 000 group in areas like Mitchells Plain, Khayelitsha, Grassy Park and Strandfontein, prices have held up far better than elsewhere,' said Lawrence, 'because demand in these areas and for properties in this price bracket, is constant'
The problem facing agents in the low-cost areas, he added, is that perhaps one in three potential buyers will be rejected by the bank bond issuers.
This, he said, is not so much because of the National Credit Act criteria, although those have had a marked effect, but rather because of poor debt payment records.
'These days the banks are especially vigilant about what is described as 'conduct' because they can be made to carry the whole debt if it can be shown that they lent 'recklessly'. They check with all the major credit record compilers and retail outlets. If they then find evidence of a non-payment they will be obliged to refuse the loan in order to protect themselves'
At this level, said Lawrence, a 1% drop in the interest rates can make another 5% of the total population eligible for bonds so the second half of 2009 (when interest rates are expected to have dropped) should be a good time for buyers below R600 000 and should increase demand further in the low cost areas.
