Crime situation still a dampener on the market
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.”