PROPERTY NEWS - A number of indicators right now point to the months ahead in the property sector being a period of slow but steady upturn and recovery, says Bill Rawson, Chairman of the Rawson Property Group.
The chief of these indicators, he said, is the fact that the average House Price Index is now at a two year high and, according to the FNB Property Barometer, is now rising at 8,6% per annum.
Also encouraging, as was recently pointed out to him by an eminent property analyst, is the fact that there has been a 12% plus decrease in civil summons in the first quarter of this year, a 42,4% decrease in liquidations and the number of 100% bonds issued has risen by over 35%.
Another factor which very definitely could also boost the entire house marketing sector, said Rawson, is that the motor manufacturer BMW recently declared an intention of moving into home finance, a field in which they have been quietly active in for some time.
"According to reports now appearing in the media," said Rawson, "they have already in fact started to ask for more applications. It seems that BMW Finance believe that the home finance divisions of the banks have given extremely poor service and are no longer judging applicants on their true merits. They have also, it appears, said that they will be able to issue loans at lower costs and lower interest rates than the banks are currently doing and give better service. They have, in general, promised to get back to the applicant within one week of the application, provided that the documentation they ask for is in order."
Rawson commented that the move by BMW Finance, in his view, makes complete sense because the existing BMW clientele base is almost certain to be an excellent initial target market. The link-up between motor cars and homes also increases the security of the loans because homes are a more reliable asset than vehicles.
"What is particularly exciting about BMW's move," said Rawson, "is that it is likely to make the banks more competitive in chasing the home finance market. It could also lead to other motor finance houses following suit, thereby greatly widening the options open to home loan applicants."
Asked if the pending Eurozone crisis and possible collapse will not affect South Africa's economic (and housing) performance, Rawson said that, as he sees it, South Africa is now positioned to ride out the problems being encountered in Europe.
"My analysis of the situation," he said, "is that we will be no worse off in the difficult times ahead than we are now. The European and other major banks have already factored into their calculations the possibility of a massive debt write-off and will come through the next year or two severely hurt but not killed off and providing the basic necessities of life such as food and housing will keep economies ticking over."