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The TTPS Newsletter

One cannot open a newspaper anymore without some “expert” giving his two cents on the property market, it seems. Prices are going up, prices are going down, it’s the right time to buy, it’s the wrong time to buy, get in, get out, this area, that area…

It can be quite confusing. To help you make sense of it, our monthly electronic newsletter will provide you with the correct information when you need it. It is short, to the point and will help you to stay abreast of the latest developments in the property market. This is invaluable when you are looking to sell or let your property, or if you are looking to buy or rent property.

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Absence makes the heart grow fonder

We recently fixed some bugs on our blog. The format as well as the look have been changed. Tell us what you think.

Of course, this blog will still be the same useful resource for all things related to property. We have also recently revamped our website completely. We’ll have a separate post on this. In the meantime, check it out here…

Garden Route Property | Terblanche Total Property Solutions

The end of 2008

What a year we’ve had. Worldwide and right here in (not always as) sunny SA. The year just started along the wrong lines with Escom’s infrastructural and coal supply hangover. The free-falling Rand and skyrocketing fuel prices and interest rates didn’t improve things for the ordinary South African. Then, of course, we all had to learn how to deal with the National Credit Act and its freezing effect on the banks. All along we were still importing much more than we were exporting and our trade deficit started to look really unhealthy. Couple that with political instability – remember our ex-President, a certain Mr. Mbeki who was asked to step down and Julius Malema of the ANC Youth League vowing to kill for Zuma – and it is clear that 2008 was a very challenging year for South Africans.

Ironically, it was the NCA, exchange control and our banks that insulated us from the real crisis that developed: the credit crunch and the collapse of the international banking system in 2008. When you hear names like Lehman Brother collapsing, you know things are serious. No surprise then that household consumption in SA nosedived with property prices. According to Absa’s latest figures, the real prices of most properties have been declining for about 9 months in a row now.

Goodness.

However, as with everything, so too this shall pass. The governor of the Reserve Bank, as predicted, lowered interest rates by half a percent at the December 08 meeting of the Monetary Policy Comitee. It is our belief that interest rates will be lowered at each of the coming sittings of the MPC until they’ve been lowered with another 2,5% to 3% by second to third quarter 2009. Of course, fuel prices have also come down hard and the South African consumer already felt the benefit a week ago at the fuel pumps with petrol going down by a whopping 161 cents.

2008 was a difficult year for everyone. Much of 2009 will still be difficult, that much is clear. However, one gets the feeling that there is an end in sight, don’t you? From the second half of 2009 South Africa will get the soccer world cup fever with all the optimism that it brings. Looking at the massive infrastructure spending going on currently, how could it not be positive? Even the new American President, Barack Obama, believes the answer to America’s problems is increased infrastructure spending. The point is that we’ve been here before.

Thank you to all our clients who shared their hearts, thoughts and time with us this year. We are very excited about 2009 and building our relationship with you. As always, we will serve you with integrity and honesty.

This is our last blog post for this year. Take care and God bless. See you on this blog again next year.

John Mauldin’s thoughts on South Africa

I know this is a bit early for our blog post this week. However, I recently read a great article by John Mauldin. For those of you who don’t know, John Mauldin is a multiple New York Times best selling author and recognized financial expert. He has been heard on CNBC, Bloomberg and many radio shows across the USA. He is the editor of a highly acclaimed, free, economic and investment e-letter that goes to over 1 million subscribers each week. He has recently been voted second only to Warren Buffet as an investment guru. He wrote the article after a recent trip to South Africa…

“I start this week’s letter somewhere over the Atlantic, halfway through an 11-hour flight from Frankfurt to Dallas. It has been an altogether marvellous 11 days in South Africa, speaking to over 1,000 people at 12 venues, giving a half dozen media interviews, and meeting with many individuals. This week, I want to give you some impressions of not only South Africa, but talk a little about emerging markets in general.

Finding Value in South Africa
As I observed South Africa, it was forcefully brought home to me that there is more to the emerging-market story than China, India, and Brazil. There are any number of countries that are seeing robust growth and contributing to the world economy. It was reported at Davos this year that for the first time the developing world has a larger share of world GDP than the developed world.

Before we get into some facts, let me give you a few impressions. First, there are construction cranes everywhere in the four cities I visited: Johannesburg, Pretoria, Durban, and Cape Town. Twelve years ago the thirty miles from Johannesburg to Pretoria was mostly agricultural land. Today it is one big city, with offices, malls, and homes lining the freeway. There was a significant number of rather nice new housing developments, many if not most being built on speculation all along the
freeway.

Johannesburg is a world-class city, on a par with New York or London or any major city in terms of facilities, shops, infrastructure… and traffic. There were new shopping malls all over, and the stores were busy. Durban is a tropical jewel on the Indian Ocean. Again, there was construction everywhere – a green, verdant city of 1,000,000 people, with modern roads and great weather. I have been to Sydney, Vancouver, and San Francisco. I love all of them. But for my money, Cape Town is the most beautiful city I have been to in the world. Amazing mountains, blue water harbour’s, white sand beaches, with wineries nestled in among the mountains and valleys.

Grant Thornton did a survey in the 30 countries in which they do business. The four countries with the most optimism and confidence were India, Ireland, South Africa, and Mainland China. There are several reasons why… The economy has been growing at a reported almost 5% a year for the past several years, which is quite strong. They have had 32 consecutive quarters of positive growth. But the official figures may
understate the reality by a significant amount. If you look at the VAT (value-added tax) receipts, as well as other tax figures, some economists estimate the economy may be growing by 7% or more.The stock market has grown by over 25%, 47%, and 41% for the last three years. Such a bull run is always a boost to confidence. But there are also some real fundamentals underlying the emerging-market Bull markets. South Africa has a strong commodity sector, with numerous commodities and not just gold.

Football as an Economic Driver
The attention paid to football (or soccer in the United States) is rising to fever pitch in South Africa. And for good reason: they will host the World Cup in 2010. They expect some 3,000,000 fans to show up. The government is using the occasion to spend some 400 billion Rand (a little over US $50 billion) on all sorts of infrastructure projects. It will have the added effect of making the country more competitive, just as infrastructure in China has been a boost to that country, and a lack of infrastructure has limited India. The World Cup will also be a boost to tourism, already one of the most important sectors of the economy. South Africa also has a strong entrepreneurial class which is the base for much of the new business and development, not just in South Africa but in all of Africa.

There is much to like about emerging markets. That is where a great deal of the real potential growth in the coming decades will be. And South Africa will be one of the better stories. If you are not doing business there already, you should ask yourself, why not?”

The grass is not always greener

I found this blog post on the Business Link Magazine blog recently. We are very positive about South Africa and our role in this country so this kind of article resonates with us. I include the full text here below.

24 reasons to stay in South Africa



Grumbling about South Africa’s current state of ‘crisis’ is commonplace. The gripes range from petrol price hikes, to rampant crime, government corruption and, of course, a critical energy shortage, all of which are making many South Africans seriously consider packing for Perth or other ‘greener’ pastures.



It’s all about perspective

Much of our point of view is shaped by the media, which invariably contains the bad, the shocking, and the doomsday reports (a trait that is not peculiarly South African).

Barry Glassner, in his book “The culture of Fear: Why Americans are afraid of the wrong things”, talks about misplaced fears. “Disproportionate coverage in the news media plainly has effects on readers and viewers,” he says. “Asked in a national poll why they believe the country has a serious crime problem, 76% of American people cited stories they had seen in the media. Only 22% cited personal experience. Between 1990 and 1998, when the nation’s murder rate declined by 20%, the number of murder stories on network newscasts increased 600% (not counting stories about O. J. Simpson).” Glassner also points out that we compound our worries beyond reason.

With this in mind, while South Africa’s imperfections are a reality, putting it into perspective is helpful. In the bigger scheme of things, and in relation to the rest of the world, South Africa’s future is actually looking bright – load-shedding or no load-shedding! In fact, there is so much good news about South Africa, that we do not have room to publish it all, so we will give you a starter of how green our pastures actually are – for the main meal, visit the website South Africa: The Good News, at www.sagoodnews.co.za. Also visit www.sarocks.co.za to start a blog on South Africa’s positive attributes.

The Facts

South Africa ranked 44th out of 131 countries in the World Economic Forum’s Global Competitiveness Report 2007/8

Three South African cities were voted amongst the world’s top 100 Most Liveable Cities in a study conducted by Mercer Human Resource Consulting. Cape Town was ranked 85th, Johannesburg 90th, and Port Elizabeth 97th

South Africa is ranked 20th out of a total of 128 economies in the World Economic Forum’s Global Gender Gap Report 2007, ahead of many developed nations, including the United States (31), Switzerland (40), Austria (27) and France (51)

South Africa is ranked 35th out of 178 countries for ease of doing business – ahead of Spain, Brazil and India – according to Doing Business 2008, a joint publication of the World Bank and the International Finance Corporation

South Africa ranks in the top four countries worldwide in terms of the transparency surrounding its budgets – ahead of the US, Norway and Sweden – according to the Open Budget Index

The number of tourists visiting South Africa has grown by 188% since 1994, from 3 million to 8.4 million in 2006 (Department of Environment and Tourism)

South Africa is the first, and to date only, country to build nuclear weapons and then voluntarily dismantle its entire nuclear weapons programme

South Africa will become the first African country to host the Soccer World Cup in 2010, and the first country in the world to have hosted the Cricket, Rugby and Soccer World Cups

South Africa is home to both the largest land mammal (elephant) and the smallest mammal (shrew)

South Africa is the only country to house an entire floral kingdom (fynbos), one of only six on the planet

South African Breweries ranks as the second largest brewing company in the world. It supplies up to 50% of China’s beer

Cape Town has the fifth-best blue sky in the world according to the UK’s National Physical Laboratory

21 South African beaches were awarded Blue Flags, an international indicator of high environmental standards for recreational beaches in 2007

South Africa ranks 57th out of 157 countries in the world in terms of economic freedom, ahead of Italy (64), Brazil (101), the United Arab Emirates (63), Greece (94th), India (104th) and China (126), according to the Index of Economic Freedom 2007

South African media ranks 26th out of 167 countries in the Worldwide Press Freedom Index 2007, higher than any country in Asia, the Middle East or South America, and ahead of Japan, Spain, Italy and the United States

South Africa accounts for almost 45% of the GDP of the entire African continent, with an economy three times the size of the second biggest country (Egypt)

The South African Constitution is widely regarded as being one of the most progressive in the world, drawing from the experiences of the world’s most advanced democracies

Almost a quarter of South Africa’s non-interest budget is spent on education

Johannesburg ranks second among cities in countries from Asia/Pacific, the Middle East and Africa in dealing with urbanisation and environmental challenges, in the MasterCard Insights Report on Urbanisation andEnvironmental Challenges

South Africa’s per capita GDP, corrected for purchasing power parity, positions the country as one of the 50 wealthiest in the world

Worldaudit.org ranks South Africa as the 40th most democratic country out of 150 nations

South Africa is the 35th best place in the world to do e-business, according to the Economist Intelligence Unit’s 2007 E-Readiness Report

South Africa is the best-ranked country in terms of price stability; our fiscal policy is ranked 11th, our international trade competitiveness 21st, and we are the 28th most-attractive destination for foreign direct investment, according to the World Competitiveness Yearbook 2005

The value of South African real estate has improved by 30% over the past five years