Rawson MD rebuts allegations of "Spin"

DECEMBER SALES WERE 27 % UP.

Are South African Estate Agents trying to talk the market up, or are they, by and large, honest analysts of the property scene?

One company, Rawson Properties, has always claimed to be in the latter category – but has recently found itself and its media liaison man, Tim Cartwright, the target of criticism for putting a spin on its figures.

Tony Clarke, MD of the Rawson Group says that a statement by Bill Rawson, chairman of Rawson Properties, that the group’s December 2008 sales were significantly up on those of 2007 was “absolutely correct” and not in any way “spin”- and he wants the world to know this.

“In late December when the report was made we did not have final figures and had to take into account that although the trend was definitely upward certain sales were still to be finalised. However by 8th January we were able to confirm that our December 2008 sales were 27 % up on those of December 2007.”

Although surprising, said Clarke, this does not in his view necessarily mean that the market has bottomed out but it probably does indicate that the collapse - trauma period is over “and the patient is in convalescence”

“Right now,” he said, “it is significant that since August 2008 there has been a slow but discernible improvement month by month, with one exception, October. Looking ahead and trying to give a prediction as to when we will be into “normal” trading conditions with prices rising once again is very difficult – rather like trying to predict when the universe will implode.

“My view which is based on a range of available figures, is that on the grandfather clock cycle, which we at Rawson’s have always found valid, the property sector is into an initial recovery phase and is heading for a marked upswing in the second half of 2009. Now, therefore, would be a good time to buy provided it is always borne in mind that it is possible to lose money even in a good property market but that, in my experience, long term investments i.e. those in the market for five years or more always show a profit.

Business confidence, said Clarke, was reported in the financial press to have hit a 20 year low in the same month (December) that Rawson experienced its upswing but it is likely, he said, to be boosted by four or five factors regularly mentioned by property spokespeople.

“The most important of these is very definitely a probable drop of 50 to 100 base points in the interest rate after the February meeting of the Monetary Policy Committee – and this will almost certainly be followed by further cuts.”

Also pushing the market, said Clarke, are the lower petrol price and the reduced CPIX both good reasons to continue to lower the interest rates. Equally important, he said, is the R600 billon infrastructural investment package implemented by finance Minister Trevor Manuel who, Clarke quoted, foresees the current 3,2% growth rate increasing to 4,3% over 2009/2010.

Clarke reminded sceptics that day-to-day residential requirements caused by transfers, promotions, redundancies, moving to be closer to schools, divorce and death always provide a base-load turnover, even in a slow property market – and, he said, Rawson has had its fair share of this trade.

“I find it particularly interesting that a small but well informed handful of investors has now come back to us and is favouring property rather than the stock exchange”, he said.” “I foresee this continuing to happen for at least a year because prices are currently so favourable.”

Article from: www.rawson.co.za