Strong demand for low cost housing very difficult to meet, says Rawson Properties' Chairman
Eighty percent of the demand for residential housing is now aimed at the sub R500,000 market and a large portion of the remaining demand is for homes in the R500,000 to R1 million bracket, says Bill Rawson, Chairman of Rawson Properties.

“Wherever we have properties in these price categories, we are still able to find buyers quickly despite the tighter credit restrictions and the high interest rates,” said Rawson. “We ourselves would very much like to be doing more development in these sectors. However, so often we come up against the very high costs of land, which makes projects here non-viable.”

Hinting that this might be an area in which a government committed to the provision of housing could give assistance (possibly by buying and retaining the land while allowing the developers to get on with the building and selling of the homes), Rawson said that his group now has a Cape development coming up in the sub R500,000 bracket and is looking at several in the R500,000 to R1 million bracket.

“We accept that as South Africans we have a real duty and a commitment here,” he said. “Privately owned housing has always been the bedrock on which stable states are built. A home is not just a place of shelter. It is also the incubator of ideas, new ventures and prosperity. It is from this base that the family members, particularly the young, go out to make careers for themselves and change the world - and this is nowhere more evident than in the townships. All the evidence at hand indicates clearly that when a family home falls apart, crime and unemployment almost invariably follow swiftly.”

The value of housing, said Rawson, had again been proved in the current financial difficulties.

“It looks very much now as if the world’s economies will take some two to three years to sort themselves out and get rid of the huge debt incurred,” he said. “However in these difficult conditions South African housing continues to be bought and sold at the levels that pertained in 2006. Even if we dropped to 2004 levels, as seems just possible, the truth remains that housing has been able to ride out the current bumpy patch far better than most asset classes.”

Recent auctioned property, added Rawson, had achieved higher than expected prices, a sign that people have retained their faith in the enduring value of property.

Another side of this, he said, is the growing trend among the new middle class to upgrade their homes, either with improvements or by moving to a new area. Armed with a new awareness of property values and of the current conditions, he said, many of these people are proving extremely hard bargainers, both in getting good prices for their new homes and in ensuring that the homes they sell go at market or above market values.

Commenting on the minor furore that an interview given by his MD, Tony Clarke, to the online property press has provoked, Rawson said that Clarke’s basic message had been very similar to his, i.e. that property has remained a safe investment and one that had fared well in the current troubles. One of the reasons for this, he said, is that property meets two basic needs, a place to live and a place to work, and for this reason the property market, except in times of real upheaval, will always fare better than most asset classes.

In his interview Clarke implied that the “experts” who had sold off shares and other financial packages over the last two years and had not seen the advent of the current crisis had some explaining to do and this, said Rawson, was no doubt the main reason why the article had caused such a storm.

Article by: www.rawsonproperties.com