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