Whatshot
Bugle Sales Talk Editorial
Bugle Sales Talk Editorial
Date: 2015-05-08
As South Africans we are acutely aware of how the media can add to the fears of foreigners and create the impression that we are living in a war-torn zone. In reality non-South African buying of local residential property is such a small percentage overall, that the impact is limited. However, we live in a global village, with our wealth and livelihood dependent on active trade and demand for our goods, services and assets drawn from a global market. Thankfully the purchaser I was dealing with decided to proceed with the transaction. Possibly because they originate from Africa and the DRC in particular they understand political risk and the reality on the ground rather than a media embellished profile.
I do not expect potential buyers from more stable developed countries to have the same attitude. Unfortunately it is hard to quantify the demand for our residential property we would experience if our domestic profile was free from Xenophobic attacks, pseudo politically inspired land-grabs or the high and persistent crime rates we accept as the norm. The utter mismanagement of Eskom over many years was the seed sown and we are now reaping the limitations on supply that are regarded by the Governor of our Reserve Bank is being a significant impediment to economic growth for this year.
According to StatsSA the release of the February Electricity Sales data showed a continuation of the year-on-year decline in electricity consumed in South Africa of -1%, the 10th consecutive month of year-on-year decline. Other major economic indicators, such as the low growth in mining output due largely to last year's Platinum sector strike and the growth of the Manufacturing sector production being in negative territory of -0,5% in February, are weighing heavily on business and consumer sentiment. As reported in FNBs recently published report the benefits from sharply lower global oil prices have started to dissipate with some recovery in the oil markets (the average price per barrel of $50.1/barrel in January has risen to an average of $60.6/barrel in April).
The Rand exchange rate has continued is sideways movement against the Dollar with the weaker R12/US Dollar being the new average rate. The recently introduced increased tariff on fuel has also mitigated against the benefits of a lower fuel price rippling through the economy. As South Africans we use approximately 25bn litres of fuel per annum. Every R1 increase in the fuel tax adds R25bn to government coffers. It was therefore opportune that the government took advantage of lower fuel prices to raise significant revenue from this source. The cumulative effect of the wave of negative economic data and political and social instability is a drag on property prices and tempered demand.
The upshot is that if you have a positive long-term view like myself, then it is an excellent time to actively look for those buying opportunities. For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.
Andreas Wassenaar
Principal - Seeff Dolphin Coast
Cell: 082 837 9094