Auc­tion­eer pre­dicts 2010 will be ‘the year of two halves for prop­erty’

Weekend Argus (Saturday Edition) - - THE ALLIANCE WEEKLY -

AC­CORD­ING to Al­liance Group chief ex­ec­u­tive Rael Le­vitt: ‘For most prop­erty play­ers, the past year has been first arid fore­most about short-term sur­vival

Le­vitt be­lieves that the out­look for than 2010, 2009 while which still mild, far bet­ter Ii9ht­en­ing saw many peo­ple

their belts to deal with the weak econ­omy and grow ing un­em­ploy­ment.

‘10 2010, peopIe’at­start­spenc1-eq more as the stock mar­ket con­tin­ues to rally and the eco­nomic out­look im­proves. Keep­ing the show on the road dur­ing the past 18 months of tur­moil hat been a true test for many de­vel­op­ers, bro­kers and banks, while this year the chal lenge will be to ref ocus on the long term ond what the post-World Cup pe­riod will bring. We nest not for-get that 2010 may well be a tale of two halves,” he Con­tin­ues.

“The first halt of the year un­til lune 11 will see our coun­try show-cas­ing its beauty and its as­sets to a cu­mu­la­tive au­di­ence of some 30 bil­lion peo­ple. One can­not un­der­es­ti­mate the im­pact of the World Cup. Our cities will very shortly be host­ing the world’s most spec­tac­u­lar global event. The World Cup will be a chance to s[bi­w­case

SouthiAfrica and, de­spite high lev­els of crime and a still-shaky econ­omy,

South Africa will prove the scep­tics wrong,

‘For the first time the world will see that South Africa is, in many ways, closer to Argeetina and

Malaysia than it is to most African states. Prepa­ra­tions for the World Cup have al­ready given a boost to the econ­omy through in­fras­in­uc­tural spending.

“Pa foot­ball fans from around the world de­scend upon as, we must

re­mem­ber that the eco­nomic head-winds will still be strong and

unerr’tioy­ment, above 2096, is still alarn­ingIy high. The prop­erty mar— ket, still bur­dened by debt, faces a long, hard slog. In fact, our view is that the prop­erty mar­ket is in­deed in a pe­riod of slow, weak aimd dull re­cov€ry. While the World Cup will boost sen­ti­ment, and likely cause a bounce in high-value res­i­den­tial propø’ties, it un­for­tu­natc’ won’t be a magic p’11 to guickly re­lieve the down­turn.’

Le­vitt pre­dicts that ri the first half of the year the prop­erty mar­ket siII ex­pe­ri­ence larger prop­erty liqx­ida tions and in­sol­ven­cies than ever ex­pe­ri­enced in the counts)

“A sweet spot may emerge for es­tate agents and auc­tion­eers if buy­ers are buoyed by­pos­i­tiveWorld Cup sen­ti­ment, hut sell­ers who are mildly dis­tressed will ac­cept re­al­is­tic prices. I truly hope that cer­tain agents don’t cre­ate hy­per­bolic eu­pho­ria around the World Cup and cre­ate a sit­u­a­tion where sell­ers start ask­ing un­re­al­is­tic prices think­ing that soc­cer fans are head­ing to South Africa on prop­erty shop­ping trips. This will kill sales.

“The sec­ond half of the year may well be more chal­leng­ing and, while we don’t be­lieve that t[ere will be a ma­jor post.World Cup hang­over, re­al­ity may well set in for cer­tain prop­erty play­ers. [louse price growth threat­ens to be lim­ited for the next year be­cause of the dam-ag­ing Ie­gay of the past two years,” says Le­vitt.

“The last decade led to large house price inflation aird, as banks have be­come rel­a­tively sober in

mort­gage lend­ing, the com­plica tions left by the past decades prop­erty boom will be with us for a while.”

With re­gard to the auc­tion in­das try, Le­vitt be­lieves that auc­ticers will grow as far­ther new en­trants join an in­creas­ingly com­pet­i­tive space. As a re­sult of this grow­ing com­pe­ti­tion which is, ac­cord­ing to Le­vitt, “mar-ket­ing it­self and thu5 the in­dustly, auc­tia­neer­ing will see fur­ther growth in 2010 as the in­dus­try gains more and more ac­cep­tance as a first-choice method of sale.

Fur­ther­more, dis­tressed prop­erty sales will still be­com­ing to the auc tion floor for most of the year,

“We will see pri­vate in­vestor ap­petite growth in com­mer­cial prop­erty and, when our barks fur ther loosen credit lines, we will see even more growth in auc­tions as a means of buy­ing.

“TIns year will also see reiord num­bers of the larger listed prop­erty funds sell­ing their smaller Roper-ties as smaller in­vestors get back on the ac­qui­si­tion troll, The smaller in­vestors who were bat­tered by the tight credit mar­ket were some of the big­gest sell­ers in the mar­ket only six months ago but

— are now also looking to buy again,” coir­dudes Le­vitt

RA[L LEVIIT

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