Clarke explains reason behind market 'panic'

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.

Clarke said that a recent statement from a leading estate agency to the effect that house prices could fall by 40%, although later withdrawn, had caused a massive loss of confidence in property and had done untold harm. It was, he said, based on no verifiable data and had been completely unjustified.

“What particularly annoyed me and other spokespeople for the real estate industry,” said Clarke, “was a follow-up statement from another member of the firm implying that those of us who protested were simply trying to protect our livelihoods and ignoring the facts.

“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.”

Clarke said that he recognises the importance of the media’s role in keeping readers up to date with the economic realities but, he said, the media have a responsibility to be balanced, well-informed and to avoid over-simplification – “especially in times like the present when the issues are complex”.

Among many good factors working to the benefit of the SA property market, Clarke listed:

· 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 opportunities; and

· 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 than before.

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.

“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.”

Clarke added that in the nationwide franchise network that Rawsons has established in the last two years (and are still expanding) many areas are still achieving steady, ongoing price growth.

“The fact that Rawsons have sold another 12 franchises in the last two months should tell the public something about how positive the outlook for real estate sector still is.”

 

Article from: www.rawsonproperties.com