Crime sit­u­a­tion still a damp­ener on the mar­ket

Weekend Argus (Saturday Edition) - - PROPERTY -

OVER the past 20 months, South African prop­erty own­ers have weath­ered sev­eral ma­jor stor ms with com­mend­able suc­cess – but one fac­tor, crime, is still a cause for con­cern and a se­ri­ous damp­ener on the prop­erty mar­ket, says Tony Clarke, MD of Raw­son Prop­er­ties.

“Those who own prop­erty in SA should have been im­pressed by the way con­fi­dence has re­turned to the prop­erty sec­tor, but this con­fi­dence would have been at a far higher level if only we did not have a se­ri­ous crime prob­lem.”

He says the prop­erty mar­ket had suc­cess­fully come through a num­ber of ma­jor crises: the Zim­bab­wean cri­sis; the Eskom power cuts; the global fi­nan­cial melt­down; the Na­tional Credit Act (which more than any other fac­tor slowed down house sales); the banks’ in­abil­ity to grant mort­gage bonds as pre­vi­ously; the Polok­wane congress; and the es­tab­lish­ment of the Zuma regime. Then, too, there had been the new, rad­i­cal in­sis­tence on time-con­sum­ing train­ing for agents to bring them up to pro­fes­sional lev­els – a wise but ex­pen­sive move, says Clarke.

“All this came on top of the huge debt prob­lem that South African home own­ers and con­sumers got them­selves into, which, in the hous­ing sec­tor, has led to on­go­ing re­pos­ses­sions of many thou­sands of houses, the ef­fect of which will be to keep prices down for the fore­see­able fu­ture.”

All th­ese chal­lenges, says Clarke, h av e b e e n , o r a r e b e i n g , l i v e d through without killing off the prop­erty sec­tor. And the fact that South Africa has man­aged this bears wit­ness to the re­silience of the prop­erty mar­ket and on­go­ing per­cep­tion that prop­erty is still a safe in­vest­ment.

“If, now, South Africans start a ch i ev i n g a n i m p rove d c r i m e record, the stage will be set for a fullscale re­vival driven by pent-up de­mand for homes, which in­creases month by month. Right now, South Africa has the fastest-grow­ing mid­dle class in the world, a fact con­firmed by sev­eral re­ports, and most of th­ese newly em­pow­ered peo­ple want to up­grade their liv­ing stan­dards and be­come home own­ers.

“That is the first rea­son for faith in res­i­den­tial prop­erty. The sec­ond is that our ba­sic fis­cal strate­gies, poli­cies and bank re­serves are sat­is­fac­tory. South African banks did not, like so many of their First World col­leagues, fall apart re­cently in the global re­ces­sion.

“Then, too, we have shown an im­pres­sive abil­ity to host in­ter­na­tional sport­ing, con­fer­ence and tourist events, and this, it seems, has had a good pub­lic re­la­tions ef­fect world­wide. Add to th­ese fac­tors, the boost the 2010 World Cup is al­ready start­ing to give to our econ­omy and the in­creased ex­po­sure world­wide that South Africa will en­joy as a re­sult of it, and we have yet an­other rea­son for con­fi­dence.

“The chal­lenge now, there­fore, is to get on top of our fast in­creas­ing crime prob­lem.”

In cer­tain ar­eas, says Clarke, crime is now the num­ber one rea­son for em­i­gra­tion – or at least for keep­ing the pos­si­bil­ity of em­i­gra­tion

‘Four­teen per­cent of rich peo­ple are re­ported to have moved else­where in SA pri­mar­ily for safety rea­sons’

alive in peo­ple’s minds. This, he says, was con­firmed in FNB’s lat­est re­port, which in­di­cates that crime is now re­spon­si­ble for about 45 per­cent of all em­i­gra­tion. It has also been re­spon­si­ble for a new trend, where South Africans move to ar­eas in the coun­try where life is thought to be safer.

“Four­teen per­cent of rich peo­ple are re­ported to have moved else­where in SA pri­mar­ily for safety rea­sons,” says Clarke. “The ma­jor ben­e­fi­cia­ries of this have been the coastal ar­eas of the south­ern Cape – Ge­orge, Knysna, Plet­ten­berg Bay and Mos­sel Bay in par­tic­u­lar, and the north­ern and south­ern coastal towns of KwaZulu-Natal.”

“In the cir­cum­stances,” says Clarke, “the new com­mis­sioner of pol i c e ’s ( Bheki Cele) i ni t i at ive s aimed at re­duc­ing crime are very wel­come.”

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