The fact that Rawson Properties’ May month’s recorded sales were the highest in their 30 year history – and that in the first five months of this year they were 47, 8% up on the same period last year and again achieved turnover levels never before seen in the group – is a clear indication that the long-awaited upturn in the residential property market is now a reality, says Tony Clarke, Managing Director of Rawson Properties.
The banks’ relaxed credit criteria coupled with the expectation that interest rates will probably remain low at least until the first quarter of 2013 have, said Clarke, been major reasons for a clearly perceptible increase in potential property buyers’ confidence. This, he said, is now evident throughout the South African market.
In particular, said Clarke, he welcomes the fact that the banks’ income-in-relation-to-bond size criteria are no longer the sole measure by which applications are assessed – the size of the client’s equity input is also now playing a big part in their decision-making, the perception “quite rightly’’ being that an ability to put down a large deposit is an indication of the client’s financial stability.
“We are now seeing the four major commercial banks and other players in this field josting for market share and becoming increasingly competitive,” said Clarke. “We are also seeing the number of voluntary (as opposed to distressed or forced) sales increasing. At present, too, a higher percentage of sellers (up 19% according to a recent survey) are now planning to upgrade and this too is a good sign.”
Voluntary sales, added Clarke, tend to take place at 90% to 100% of the home’s asking price and at present in South Africa are being concluded on average within 100 to 110 days of listing. Forced or distressed sales, by contrast, he said, are still achieving only 70% to 80% of the home’s true market value.
With the 4th June FNB Property Barometer now recording a 9% y-on-y growth, said Clarke, buyers are – or should be – beginning to realize that the bottom of the cycle has now passed and those who do not get onto the property wagon may find it difficult to do so before long. The current very low interest rates, he added, also point to this being the right time to buy.
A further sign of increased confidence in property, he said, is that in all three of Rawson Properties’ training centres – at Cape Town, Johannesburg and Durban – have recently received greatly increased intakes of people wishing to become estate agents and/or franchisees.
“History, I believe, will show that the franchise system did much to change the face of residential property marketing in South Africa,” said Clarke. “The simple reason for this is that it appeals to the genuine entrepreneur, who tends to be more go-ahead and proactive than an employed branch manager.”
