(Foreign) DEAKIN WEST (March 13) - The Real Estate Institute of Australia (REIA) has released the REIA/Deposit Power Housing Affordability Report; a comprehensive assessment of the ability of Australians to meet the cost of home purchase.
The report, released on March 6, notes a record change is evident for the December quarter in the proportion of family income required to meet mortgage repayments. This percentage of family income needed decreased nationally from 38,8% in the September quarter 2008 to 32,4% in the December quarter 2008.
“This is the largest quarterly change recorded by the REIA since calculations of this affordability measure were first made in 1995”, said REIA President, Noel Dyett.
Housing affordability nationally improved significantly during the December quarter 2008 as the result of a combination of interest rate reductions, Government incentives and a changing market.
“Our data shows that average Australian households were paying in excess of $300 a month less for their home loan at the end of December than they were three months earlier at the end of September. This is tremendous news for homeowners who struggled throughout most of 2008 with rising interest rates and increasing loan repayments”, continued Dyett.
The December quarter 2008 is also significant because it starts to reflect the impact the Boost to the First Home Owners Grant has had on first home buyer activity.
ABS data included in the Housing Affordability Report, indicates that the Boost to the First Home Owners Grant, coupled with lower interest rates, is having a positive effect on the housing market.
The number of first home buyers increased by over 25% from the September quarter to the December quarter 2008, but the percentage of first home buyers is still 3% less than for the December quarter 2007.
“Market statistics highlight that first homebuyers make up an increased proportion of the total homebuyer market – a sign that the Boost to the First Home Owners Grant is making new home purchases more realistic for those who may not have been in a position to buy 12 months ago”, said National Manager for Deposit Power, Keith Levy.
“Housing is an important sector of the Australian economy and consequently will play a key role in helping the nation try to avoid severe recession. That is why housing has featured so prominently in the two economic stimulus packages delivered by the Government to date”, concluded Dyett.
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Thursday, March 19, 2009
Tuesday, March 10, 2009
International Investing - Why you can’t afford not to act - NOW?
Life is all about decisions and most importantly also the timing of these decisions. Scott Picken, CEO of International Property Solutions (IPS) believes it is very important to understand the opportunities which are available offshore in countries like Australia and also why it is so important to act quickly.
1. The first element is the Exchange rate
a. Currently, with the exchange rate, to buy your dream 4 bedroom investment house in Australia you need a minimum of R700 000 (deposit & all costs).
b. If the Rand was to lose 10% against the Aus Dollar, this amount would increase R70 000 or more. Now honestly, even in the next 2 months, what are the prospects for the Rand, taking these 4 elements into account:
i. In a recent article from the Economist, South Africa was portrayed as the most exposed economy globally, based on a statistical analysis and therefore one of the most vulnerable currencies in the global environment.
ii. Interest rates are coming down in South Africa to stimulate the economy and growth, which means South Africa looses’ appeal for international investors who are looking for higher returns and there is a concern of a foreign investment flight from South Africa.
iii. On the 22nd of April we will have a new president who is seen as populist and left wing, with heavy influence to the SA Communist Party and COSATU. Although hopefully this will not change government policy substantially, in the eyes of the world it is going to take a long time to prove this and in the mean time our currency will suffer. Imagine this with Trevor Manuel resigning....
iv. The ANC and COPE want to reduce the Rand to US Dollar to R12 to the $1, a decrease of 25% to improve exports and sustain jobs.
c. Based on all of the above a 10% decrease in the next 2 months is very conservative and it will probably be closer to 25%, which will mean the same property will be 25% more expensive or R177 000 more on the cash you have to input, as well as affecting your affordability for the mortgage.
2. Secondly, why it is so important to own offshore assets? Would / Should you want one?
a. The world is becoming a global village and it is very important to diversify your asset base and ensure you are taking advantage of other markets. Investors from all over the world are taking advantages of this in all asset classes.
b. However more importantly for South Africans who live in an economically and politically challenging environment (I love it as it presents opportunity) must be astute and invest part of their wealth in more economically and politically stable environments. This not only provides a Rand hedge which is vital, but also acts as an insurance policy should the unthinkable happen – you have to move.
c. I believe it is fantastic to live in South Africa, but it is a fundamental necessity to accumulate foreign assets. It is not only wise, but is prudent and essential.
3. Thirdly, understanding you want to invest, what is stopping you from acting now?
a. “I want to go to Australia to choose the right investment?”
i. IPS, through their strategic partners has done all this research for you. Scott Picken, CEO of IPS, has spent a substantial amount of time exploring all the states, cities and projects and also reading all the research to determine the best investment properties.
ii. Do you have the time, contacts or the knowledge in a quick trip to Australia to be able to make this type of analysis?
b. “I am worried about the management and maintenance of my investment property. It is so far away, what can I do if there are problems?”
i. Once again, IPS who have offices in South Africa and work with strategic partners in Australia and the UK, provide an end to end solution. Through Oz Invest, they provide a 10 year Leaseback Guarantee, where Oz Invest will manage and maintain your unit as well as guarantee your rental will be paid on the 10th of the month, each and every month for 10 years? All you will need to do is expect your rental money each month!
c. “What happens if the tenants don’t pay my rent, how can I afford my mortgage?”
i. Through the Leaseback Scheme, Oz Invest charge $15 a week to all their clients. They have over 1000 properties under management which equates to $15 000 a week and ensure they can not only always pay the rent, whether or not your unit has a tenant, but they also make a profit. Your rental is market related, guaranteed for 10 years and covers all your expenses being cash flow positive from Day One!
d. “What happens if interest rates go up?”
i. Investing is all about managing the variables. In property there are 3 variables, the rent, the interest rate and also the capital growth. For this investment the income is guaranteed, you can fix the interest rates for either 5 or 10 years and therefore eliminate the variables. It just leaves the capital growth and for this see below.
4. Fourthly understanding the market
a. Capital Growth - you need to ensure you are investing in areas with the right fundamentals – population growth, infrastructure growth, employment and transport nodes, etc. This is what IPS puts so much time into investigating and delivering to our clients.
b. It is important to invest in the right sector of the market and the best capital growth and rental yields are being found in the sub $500 000 range where IPS is focusing.
c. IPS, with its partners and thorough market knowledge has sourced the best opportunities in Australia.
What to do next?
So with an understanding of what is important, what do you do next? Basically there are a number of options.
1. Come to our next Australian Investment event. Go to http://www.ipsinvest.com/ to find the details.
2. Book an appointment – contact us on 011 463 0588.
As with everything in life, you often regret the things you do not do the most.
1. The first element is the Exchange rate
a. Currently, with the exchange rate, to buy your dream 4 bedroom investment house in Australia you need a minimum of R700 000 (deposit & all costs).
b. If the Rand was to lose 10% against the Aus Dollar, this amount would increase R70 000 or more. Now honestly, even in the next 2 months, what are the prospects for the Rand, taking these 4 elements into account:
i. In a recent article from the Economist, South Africa was portrayed as the most exposed economy globally, based on a statistical analysis and therefore one of the most vulnerable currencies in the global environment.
ii. Interest rates are coming down in South Africa to stimulate the economy and growth, which means South Africa looses’ appeal for international investors who are looking for higher returns and there is a concern of a foreign investment flight from South Africa.
iii. On the 22nd of April we will have a new president who is seen as populist and left wing, with heavy influence to the SA Communist Party and COSATU. Although hopefully this will not change government policy substantially, in the eyes of the world it is going to take a long time to prove this and in the mean time our currency will suffer. Imagine this with Trevor Manuel resigning....
iv. The ANC and COPE want to reduce the Rand to US Dollar to R12 to the $1, a decrease of 25% to improve exports and sustain jobs.
c. Based on all of the above a 10% decrease in the next 2 months is very conservative and it will probably be closer to 25%, which will mean the same property will be 25% more expensive or R177 000 more on the cash you have to input, as well as affecting your affordability for the mortgage.
2. Secondly, why it is so important to own offshore assets? Would / Should you want one?
a. The world is becoming a global village and it is very important to diversify your asset base and ensure you are taking advantage of other markets. Investors from all over the world are taking advantages of this in all asset classes.
b. However more importantly for South Africans who live in an economically and politically challenging environment (I love it as it presents opportunity) must be astute and invest part of their wealth in more economically and politically stable environments. This not only provides a Rand hedge which is vital, but also acts as an insurance policy should the unthinkable happen – you have to move.
c. I believe it is fantastic to live in South Africa, but it is a fundamental necessity to accumulate foreign assets. It is not only wise, but is prudent and essential.
3. Thirdly, understanding you want to invest, what is stopping you from acting now?
a. “I want to go to Australia to choose the right investment?”
i. IPS, through their strategic partners has done all this research for you. Scott Picken, CEO of IPS, has spent a substantial amount of time exploring all the states, cities and projects and also reading all the research to determine the best investment properties.
ii. Do you have the time, contacts or the knowledge in a quick trip to Australia to be able to make this type of analysis?
b. “I am worried about the management and maintenance of my investment property. It is so far away, what can I do if there are problems?”
i. Once again, IPS who have offices in South Africa and work with strategic partners in Australia and the UK, provide an end to end solution. Through Oz Invest, they provide a 10 year Leaseback Guarantee, where Oz Invest will manage and maintain your unit as well as guarantee your rental will be paid on the 10th of the month, each and every month for 10 years? All you will need to do is expect your rental money each month!
c. “What happens if the tenants don’t pay my rent, how can I afford my mortgage?”
i. Through the Leaseback Scheme, Oz Invest charge $15 a week to all their clients. They have over 1000 properties under management which equates to $15 000 a week and ensure they can not only always pay the rent, whether or not your unit has a tenant, but they also make a profit. Your rental is market related, guaranteed for 10 years and covers all your expenses being cash flow positive from Day One!
d. “What happens if interest rates go up?”
i. Investing is all about managing the variables. In property there are 3 variables, the rent, the interest rate and also the capital growth. For this investment the income is guaranteed, you can fix the interest rates for either 5 or 10 years and therefore eliminate the variables. It just leaves the capital growth and for this see below.
4. Fourthly understanding the market
a. Capital Growth - you need to ensure you are investing in areas with the right fundamentals – population growth, infrastructure growth, employment and transport nodes, etc. This is what IPS puts so much time into investigating and delivering to our clients.
b. It is important to invest in the right sector of the market and the best capital growth and rental yields are being found in the sub $500 000 range where IPS is focusing.
c. IPS, with its partners and thorough market knowledge has sourced the best opportunities in Australia.
What to do next?
So with an understanding of what is important, what do you do next? Basically there are a number of options.
1. Come to our next Australian Investment event. Go to http://www.ipsinvest.com/ to find the details.
2. Book an appointment – contact us on 011 463 0588.
As with everything in life, you often regret the things you do not do the most.
Monday, March 9, 2009
I dare you to visit Johannesburg, the city for softies
From the London Sunday Times... Jeremy Clarkson (the Top
Gear guy!)
I dare you to visit Johannesburg, the city for softies
It’s the least frightening place on earth, yet everyone speaks of how
many times they’ve been killed that day
Jeremy Clarkson – London Sunday Times
Every city needs a snappy one-word handle to pull in the tourists and
the investors. So, when you think of Paris, you think of love; when
you think of New York, you think of shopping; and when you think of
London – despite the best efforts of new Labour to steer you in the
direction of Darcus Howe – you think of beefeaters and Mrs Queen.
Rome has its architecture. Sydney has its bridge. Venice has its
sewage and Johannesburg has its crime. Yup, Jo’burg – the subject of
this morning’s missive – is where you go if you want to be carjacked,
shot, stabbed, killed and eaten.
You could tell your mother you were going on a package holiday to
Kabul, with a stopover in Haiti and Detroit, and she wouldn’t bat an
eyelid. But tell her you’re going to Jo’burg and she’ll be absolutely
convinced that you’ll come home with no wallet, no watch and no head.
Jo’burg has a fearsome global reputation for being utterly terrifying,
a lawless Wild West frontier town paralysed by corruption and disease.
But I’ve spent quite a bit of time there over the past three years and
I can reveal that it’s all nonsense.
If crime is so bad then how come, the other day, the front-page lead
in the city’s main newspaper concerned the theft of a computer from
one of the local schools? I’m not joking.
The paper even ran a massive picture of the desk where the computer
used to sit. It was the least interesting picture I’ve ever seen in a
newspaper. But then it would be, because this was one of the least
interesting crimes.
“Pah,” said the armed guard who’d been charged with escorting me each
day from my hotel to the Coca-Cola dome where I was performing a stage
version of Top Gear.
Quite why he was armed I have absolutely no idea, because all we
passed was garden centres and shops selling tropical fish tanks. Now
I’m sorry, but if it’s true that the streets are a war zone, and you
run the risk of being shot every time you set foot outside your front
door, then, yes, I can see you might risk a trip to the shops for some
food. But a fish tank? An ornamental pot for your garden? It doesn’t
ring true.
Look Jo’burg up on Wikipedia and it tells you it’s now one of the most
violent cities in the world . . . but it adds in brackets “citation
needed”. That’s like saying Gordon Brown is a two-eyed British genius
(citation needed).
Honestly? Johannesburg is Milton Keynes with thunderstorms. You go
out. You have a lovely ostrich. You drink some delicious wine and you
walk back to your hotel, all warm and comfy. It’s the least
frightening place on earth. So why does every single person there wrap
themselves up in razor wire and fit their cars with flame-throwers and
speak of how many times they’ve been killed that day? What are they
trying to prove?
Next year South Africa will play host to the football World Cup. The
opening and closing matches will be played in Jo’burg, and no one’s
going to go if they think they will be stabbed.
The locals even seem to accept this, as at the new airport terminal
only six passport booths have been set aside for non-South African
residents.
At first it’s baffling. Why ruin the reputation of your city and risk
the success of the footballing World Cup to fuel a story that plainly
isn’t true? There is no litter and no graffiti. I’ve sauntered through
Soweto on a number of occasions now, swinging a Nikon round my head,
with no effect. You stand more chance of being mugged in Monte Carlo.
Time and again I was told I could buy an AK47 for 100 rand – about £7.
But when I said, “Okay, let’s go and get one”, no one had the first
idea where to start looking. And they were even more clueless when I
asked about bullets.
As I bought yet another agreeable carved doll from yet another
agreeable black person, I wanted to ring up those idiots who compile
surveys of the best and worst places to live and say: “Why do you keep
banging on about Vancouver, you idiots? Jo’burg’s way better.”
Instead, however, I sat down and tried to work out why the locals
paint their city as the eighth circle of hell. And I think I have an
answer. It’s because they want to save the lions in the Kruger
National Park.
I promise I am not making this up. Every night, people in Mozambique
pack up their possessions and set off on foot through the Kruger for a
new life in the quiet, bougainvillea-lined streets of Jo’burg. And
very often these poor unfortunate souls are eaten by the big cats.
That, you may imagine, is bad news for the families of those who’ve
been devoured. But actually it’s even worse for Johnny Lion. You see,
a great many people in Mozambique have Aids, and the fact is this: if
you can catch HIV from someone’s blood or saliva during a bout of
tender love-making, you can be assured you will catch it if you wolf
the person down whole. Even if you are called Clarence and you have a
mane.
At present, it’s estimated that there are 2,000 lions in the Kruger
National Park and studies suggest 90% have feline Aids. Some vets
suggest the epidemic was started by lions eating the lungs of diseased
buffalos. But there are growing claims from experts in the field that,
actually, refugees are the biggest problem.
That’s clearly the answer, then. Johannesburgians are telling the
world they live in a shit-hole to save their lions. That’s the sort of
people they are. And so, if you are thinking about going to the World
Cup next year, don’t hesitate.
The exchange rate’s good, the food is superb, the weather’s lovely
and, thanks to some serious economic self-sacrifice, Kruger is still
full of animals. The word, then, I’d choose to describe Jo’burg is
“tranquil”.
http://www.timesonline.co.uk/tol/comment/columnists/jeremy_clarkson/article5
821586.ece
Gear guy!)
I dare you to visit Johannesburg, the city for softies
It’s the least frightening place on earth, yet everyone speaks of how
many times they’ve been killed that day
Jeremy Clarkson – London Sunday Times
Every city needs a snappy one-word handle to pull in the tourists and
the investors. So, when you think of Paris, you think of love; when
you think of New York, you think of shopping; and when you think of
London – despite the best efforts of new Labour to steer you in the
direction of Darcus Howe – you think of beefeaters and Mrs Queen.
Rome has its architecture. Sydney has its bridge. Venice has its
sewage and Johannesburg has its crime. Yup, Jo’burg – the subject of
this morning’s missive – is where you go if you want to be carjacked,
shot, stabbed, killed and eaten.
You could tell your mother you were going on a package holiday to
Kabul, with a stopover in Haiti and Detroit, and she wouldn’t bat an
eyelid. But tell her you’re going to Jo’burg and she’ll be absolutely
convinced that you’ll come home with no wallet, no watch and no head.
Jo’burg has a fearsome global reputation for being utterly terrifying,
a lawless Wild West frontier town paralysed by corruption and disease.
But I’ve spent quite a bit of time there over the past three years and
I can reveal that it’s all nonsense.
If crime is so bad then how come, the other day, the front-page lead
in the city’s main newspaper concerned the theft of a computer from
one of the local schools? I’m not joking.
The paper even ran a massive picture of the desk where the computer
used to sit. It was the least interesting picture I’ve ever seen in a
newspaper. But then it would be, because this was one of the least
interesting crimes.
“Pah,” said the armed guard who’d been charged with escorting me each
day from my hotel to the Coca-Cola dome where I was performing a stage
version of Top Gear.
Quite why he was armed I have absolutely no idea, because all we
passed was garden centres and shops selling tropical fish tanks. Now
I’m sorry, but if it’s true that the streets are a war zone, and you
run the risk of being shot every time you set foot outside your front
door, then, yes, I can see you might risk a trip to the shops for some
food. But a fish tank? An ornamental pot for your garden? It doesn’t
ring true.
Look Jo’burg up on Wikipedia and it tells you it’s now one of the most
violent cities in the world . . . but it adds in brackets “citation
needed”. That’s like saying Gordon Brown is a two-eyed British genius
(citation needed).
Honestly? Johannesburg is Milton Keynes with thunderstorms. You go
out. You have a lovely ostrich. You drink some delicious wine and you
walk back to your hotel, all warm and comfy. It’s the least
frightening place on earth. So why does every single person there wrap
themselves up in razor wire and fit their cars with flame-throwers and
speak of how many times they’ve been killed that day? What are they
trying to prove?
Next year South Africa will play host to the football World Cup. The
opening and closing matches will be played in Jo’burg, and no one’s
going to go if they think they will be stabbed.
The locals even seem to accept this, as at the new airport terminal
only six passport booths have been set aside for non-South African
residents.
At first it’s baffling. Why ruin the reputation of your city and risk
the success of the footballing World Cup to fuel a story that plainly
isn’t true? There is no litter and no graffiti. I’ve sauntered through
Soweto on a number of occasions now, swinging a Nikon round my head,
with no effect. You stand more chance of being mugged in Monte Carlo.
Time and again I was told I could buy an AK47 for 100 rand – about £7.
But when I said, “Okay, let’s go and get one”, no one had the first
idea where to start looking. And they were even more clueless when I
asked about bullets.
As I bought yet another agreeable carved doll from yet another
agreeable black person, I wanted to ring up those idiots who compile
surveys of the best and worst places to live and say: “Why do you keep
banging on about Vancouver, you idiots? Jo’burg’s way better.”
Instead, however, I sat down and tried to work out why the locals
paint their city as the eighth circle of hell. And I think I have an
answer. It’s because they want to save the lions in the Kruger
National Park.
I promise I am not making this up. Every night, people in Mozambique
pack up their possessions and set off on foot through the Kruger for a
new life in the quiet, bougainvillea-lined streets of Jo’burg. And
very often these poor unfortunate souls are eaten by the big cats.
That, you may imagine, is bad news for the families of those who’ve
been devoured. But actually it’s even worse for Johnny Lion. You see,
a great many people in Mozambique have Aids, and the fact is this: if
you can catch HIV from someone’s blood or saliva during a bout of
tender love-making, you can be assured you will catch it if you wolf
the person down whole. Even if you are called Clarence and you have a
mane.
At present, it’s estimated that there are 2,000 lions in the Kruger
National Park and studies suggest 90% have feline Aids. Some vets
suggest the epidemic was started by lions eating the lungs of diseased
buffalos. But there are growing claims from experts in the field that,
actually, refugees are the biggest problem.
That’s clearly the answer, then. Johannesburgians are telling the
world they live in a shit-hole to save their lions. That’s the sort of
people they are. And so, if you are thinking about going to the World
Cup next year, don’t hesitate.
The exchange rate’s good, the food is superb, the weather’s lovely
and, thanks to some serious economic self-sacrifice, Kruger is still
full of animals. The word, then, I’d choose to describe Jo’burg is
“tranquil”.
http://www.timesonline.co.uk/tol/comment/columnists/jeremy_clarkson/article5
821586.ece
Tuesday, February 17, 2009
South African Resolve - Graeme Smith has showed us how to do it!
At Smith's press conference yesterday, there was an air of maturity to his person, a quite resolve and a great amount of modesty. To an unknowing spectator it would be hard to comprehend that this man had captained a side that had recently rewritten the history books. This was a different Smith to the one who last led the Proteas to Australia in 2005. He arrived for that series full of bluster and pomp, and the Australians understandably revelled in the defeat of South Africa after they had beaten us in the series. The Australian press and the public shamed Smith for his over-confidence and for his inability to back it up with results.
However in this current tour, Smith has won over the same press and public by beating his opponents on the pitch, as a gentleman, and playing a hard-fought series full of conviction and bravery. The Australian press has always been extremely partisan when covering their nation's sporting events, and South Africa has on more than one occasion fallen shy of the persistent media frenzy that ensues during a tour Down Under. For the first time in living memory the Australian press not only began to present South Africa in a positive light, but rallied behind the touring side with an enthusiasm previously, and strictly, reserved for their own national side.
Headlines such as "Day the losing captain won" and "Maimed king wins hardest hearts of all" appeared in the Sydney Morning Herald, but these sentiments paled in comparison to the admission by Australian journalist Andrew Stevenson: "And for the first time in my life as a cricketing spectator I felt my loyalties shift. Having grown up on a diet of Lillee and Marsh and Chappell, I'd found an opponent I could love.
"With every play-and-miss, Ntini seemed more worthy. Every time Steyn stood in line with the stumps and offered fierce resistance, I was in his corner. Smith's arrival at the crease was the crowning moment. In defeat, South Africa issued a proclamation to the cricketing world every bit as resounding as their twin victories entering this match. If you want to beat us be ready for a long fight: we will not concede an inch.
A new champion has arrived in world cricket: long may they reign."
South Africans around the nation woke up early for that final test day at the Sydney Cricket Ground. Children, wives, husbands and grandparents, many of whom had never been cricket fans before, watched in anticipation as the South African bowlers stood their ground, bats in hand, against the Australian onslaught.
After an almighty performance, Dale Steyn's wicket fell, and the Australian fans went wild in victory. As if scripted, as if on a movie set, the camera panned to the South African dressing room, and clad in borrowed clothes, battered and bruised, Graeme Smith made his way to the crease.
As he descended those steps, as he walked out onto one of the most hostile cricket grounds in the world, the stands erupted in a standing ovation. The fact that he lasted seventeen deliveries matters not.
As he walked from that change room Graeme Smith, our boy captain, our broken soldier, showed us what mettle really is. Despite this, despite the praise and the accolades, despite the symbolism of the moment, Graeme Smith demonstrated one thing; he demonstrated bravery, spirit and ultimately a moral victory won through action, conviction and good sportsmanship.
South African sport has come of age; our captains and players demonstrate a standard to the rest of the world that demands recognition, respect and a certain form of emulation. They offer all of us a reason to be proud, a reason to be hopeful, an example to follow, but most of all the pleasure of seeing South Africans showing the best in the world how it is meant to be done. Earlier this week we were forwarded this (unfortunately anonymous) email from someone who had been moved by Smith's courage:
"What a day of contrasts. The early hours saw one previously unpopular South African; walking down the stairs of the SCG, to a standing ovation and bringing even the hardest SA fan close to tears of pride. That's us isn't it? That's you and me, or at least visions of how we'd like to see ourselves, battered and bruised but defiant in the face of improbability.
"I have this constant debate with my wife who fails to see the point of sport. We may not have an Obama to give us a speech that invokes in us strength to keep believing in the impossible, but even my wife sat transfixed this morning as a picture of a man striding down 20 steps said, without uttering a single word, to the rest of the world "try tell me that I can't."
"Later in the same day headlines are made by another ex-South African who quits his role as England cricket captain after just 5 months at the helm. The odds were too tough to make it happen in South Africa, the greener grass of foreign pastures too alluring to resist. Without realising it KP, you represent so many others like you. You are not alone, there are many like you who figure the odds are stacked too high to make it happen here in South Africa and look for the easier option. But you forget one thing; you forget that dealing with adversity in life breeds strength and character. Having the chips stacked against you, only to believe in something enough to defy the odds to come through these things again, and again, and again... that's something another coloured passport can not offer you.
"Thank you Graeme Smith, you gave us the Obama moment that reminded us why we love being South African this much. We are in for one hell of a tough year this year with no promise of what the end result might be. The rest of the world keeps telling us that we are just another part of the crippled body of Africa with no hope and a one way ticket to failure. Seems like a pretty good time to go and bat then."
However in this current tour, Smith has won over the same press and public by beating his opponents on the pitch, as a gentleman, and playing a hard-fought series full of conviction and bravery. The Australian press has always been extremely partisan when covering their nation's sporting events, and South Africa has on more than one occasion fallen shy of the persistent media frenzy that ensues during a tour Down Under. For the first time in living memory the Australian press not only began to present South Africa in a positive light, but rallied behind the touring side with an enthusiasm previously, and strictly, reserved for their own national side.
Headlines such as "Day the losing captain won" and "Maimed king wins hardest hearts of all" appeared in the Sydney Morning Herald, but these sentiments paled in comparison to the admission by Australian journalist Andrew Stevenson: "And for the first time in my life as a cricketing spectator I felt my loyalties shift. Having grown up on a diet of Lillee and Marsh and Chappell, I'd found an opponent I could love.
"With every play-and-miss, Ntini seemed more worthy. Every time Steyn stood in line with the stumps and offered fierce resistance, I was in his corner. Smith's arrival at the crease was the crowning moment. In defeat, South Africa issued a proclamation to the cricketing world every bit as resounding as their twin victories entering this match. If you want to beat us be ready for a long fight: we will not concede an inch.
A new champion has arrived in world cricket: long may they reign."
South Africans around the nation woke up early for that final test day at the Sydney Cricket Ground. Children, wives, husbands and grandparents, many of whom had never been cricket fans before, watched in anticipation as the South African bowlers stood their ground, bats in hand, against the Australian onslaught.
After an almighty performance, Dale Steyn's wicket fell, and the Australian fans went wild in victory. As if scripted, as if on a movie set, the camera panned to the South African dressing room, and clad in borrowed clothes, battered and bruised, Graeme Smith made his way to the crease.
As he descended those steps, as he walked out onto one of the most hostile cricket grounds in the world, the stands erupted in a standing ovation. The fact that he lasted seventeen deliveries matters not.
As he walked from that change room Graeme Smith, our boy captain, our broken soldier, showed us what mettle really is. Despite this, despite the praise and the accolades, despite the symbolism of the moment, Graeme Smith demonstrated one thing; he demonstrated bravery, spirit and ultimately a moral victory won through action, conviction and good sportsmanship.
South African sport has come of age; our captains and players demonstrate a standard to the rest of the world that demands recognition, respect and a certain form of emulation. They offer all of us a reason to be proud, a reason to be hopeful, an example to follow, but most of all the pleasure of seeing South Africans showing the best in the world how it is meant to be done. Earlier this week we were forwarded this (unfortunately anonymous) email from someone who had been moved by Smith's courage:
"What a day of contrasts. The early hours saw one previously unpopular South African; walking down the stairs of the SCG, to a standing ovation and bringing even the hardest SA fan close to tears of pride. That's us isn't it? That's you and me, or at least visions of how we'd like to see ourselves, battered and bruised but defiant in the face of improbability.
"I have this constant debate with my wife who fails to see the point of sport. We may not have an Obama to give us a speech that invokes in us strength to keep believing in the impossible, but even my wife sat transfixed this morning as a picture of a man striding down 20 steps said, without uttering a single word, to the rest of the world "try tell me that I can't."
"Later in the same day headlines are made by another ex-South African who quits his role as England cricket captain after just 5 months at the helm. The odds were too tough to make it happen in South Africa, the greener grass of foreign pastures too alluring to resist. Without realising it KP, you represent so many others like you. You are not alone, there are many like you who figure the odds are stacked too high to make it happen here in South Africa and look for the easier option. But you forget one thing; you forget that dealing with adversity in life breeds strength and character. Having the chips stacked against you, only to believe in something enough to defy the odds to come through these things again, and again, and again... that's something another coloured passport can not offer you.
"Thank you Graeme Smith, you gave us the Obama moment that reminded us why we love being South African this much. We are in for one hell of a tough year this year with no promise of what the end result might be. The rest of the world keeps telling us that we are just another part of the crippled body of Africa with no hope and a one way ticket to failure. Seems like a pretty good time to go and bat then."
What is the future for SA economy?
Can the country head off the shocks laying us low?
This needs a qualifier. Just how big will the external shocks still become? A global meltdown-cum-depression-cum-deflation would be in a class all of its own.
Such an ultimate shock is not what we face today. At least, that is the current reading. Even so, the actual reality is still daunting in the extreme.
The global banking system is bankrupt in important parts, with $2 trill of bad assets still to be written off.
There is a deep sense of fear and therefore defensiveness encouraging private spending withdrawal, abruptly pushing the global economy into deep recession.
What we face needs to be unpacked and compartmentalised.
There is the aftermath from last year: electricity shock cutting output, commodity inflation shock cutting real buying power, interest rate response increasing the debt servicing burden, national credit act inviting banks to be more conservative in granting credit, and a pervasive fear of more bad news to come deepening defensiveness.
All of that very expertly floored the economy, especially household consumption spending but also critical parts of private fixed investment. From July 2008 non-agricultural GDP (98% of the total) entered recession (-0.1% annualized). It only got (much) worse since then.
At the very moment the economy entered recession in mid-2008, some of the recession drivers abruptly let up.
Oil started collapsing, with food price inflation following more sedately. From December the SARB followed with its first interest rate cut of 0.5%. Throughout the Minister of Finance quietly accepted his tax receipts were falling (especially VAT, sin taxes, customs and excise, and above all property transfer fees), borrowing the difference rather than add insult to injury and start cutting his own spending, too.
Thus throughout 2H2008, we had many shock absorbers coming to the rescue.
The Rand went 40% down compared to 2007. The Finance Minister accepted an R14bn revenue shortfall while allowing R29bn of additional spending overruns (we now know). The SARB, not before time, decided to relent from December 2008, cutting rates by 0.5%. Oil dropped by over $110. Infrastructure spending continued at full throttle.
Yet in that very period, Lehman Brothers lost its battle and Paulson/Bernanke succeeded in frightening a world audience. The financial hit spilled over, pushing the world economy into deep recession overnight.
From October onward, it was obvious South Africa would be hit hard in a number of ways. Directly, there was to be fallout for our exporters. Indirectly, would external financing remain accessible?
This kind of shock event needs to be addressed on two levels. Foremost, the currency needs to absorb part of the external shock. And domestically there needs to be accommodation.
Happily, imported oil turned out to be our biggest shock absorber, falling over $100, thereby neutralizing most of our export commodity price declines. Although the Rand still needed to complement the oil shock absorber by also declining to compensate for net export volume losses (possibly of the order of 0%-5% this year), not all the burden would fall on it.
The Rand settling at 10:$ may have been enough, but coming months will tell whether more would have been better.
Meanwhile, what’s the use of accumulated economic strength if you don’t use it?
The Finance Minister has reduced the national debt from over 50% of GDP 15 years ago to nearer 22% today, allowing his budget two years ago to gradually drift anti-cyclically into surplus.
Following last year’s many hits to the economy, not only did he need to cover the revenue shortfall without cutting his spending, but ideally he would find ways to increase critical spending to prevent too much of a slide below growth potential.
The Minister did so by allowing a swing from 1% of GDP surplus to 4% of GDP deficit spread over two years, with half the swing accounted by tax shortfalls and half by extra spending, mostly focused on the poor.
Meanwhile what’s the use of high real interest rates? Well, you can cut them drastically in an emergency. From prime 15.5% in the crisis month October 2008, the SARB cut by 0.5% in December 2008, and by a further 1% in February 2009.
Further 1% cuts are expected in March and April, and possibly June 2009, with 0.5% rate cuts also still possible, prime now aiming for 10%-11% by 3Q2009, as already fully discounted by markets, realistically so.
Also, with political pressures independently building to do more for the poor, these stressful times create the opportunity to increase public spending on the poor without too many questions asked.
Exactly that has happened.
In this manner we are now addressing four shock demands within a year, counting local electricity and politics, and global commodity and financial upheavals.
Cees Bruggemans is Chief Economist of First National Bank. Register for his free e-mail articles on www.fnb.co.za/economics
Go to www.ipsinvest.com for more information.
This needs a qualifier. Just how big will the external shocks still become? A global meltdown-cum-depression-cum-deflation would be in a class all of its own.
Such an ultimate shock is not what we face today. At least, that is the current reading. Even so, the actual reality is still daunting in the extreme.
The global banking system is bankrupt in important parts, with $2 trill of bad assets still to be written off.
There is a deep sense of fear and therefore defensiveness encouraging private spending withdrawal, abruptly pushing the global economy into deep recession.
What we face needs to be unpacked and compartmentalised.
There is the aftermath from last year: electricity shock cutting output, commodity inflation shock cutting real buying power, interest rate response increasing the debt servicing burden, national credit act inviting banks to be more conservative in granting credit, and a pervasive fear of more bad news to come deepening defensiveness.
All of that very expertly floored the economy, especially household consumption spending but also critical parts of private fixed investment. From July 2008 non-agricultural GDP (98% of the total) entered recession (-0.1% annualized). It only got (much) worse since then.
At the very moment the economy entered recession in mid-2008, some of the recession drivers abruptly let up.
Oil started collapsing, with food price inflation following more sedately. From December the SARB followed with its first interest rate cut of 0.5%. Throughout the Minister of Finance quietly accepted his tax receipts were falling (especially VAT, sin taxes, customs and excise, and above all property transfer fees), borrowing the difference rather than add insult to injury and start cutting his own spending, too.
Thus throughout 2H2008, we had many shock absorbers coming to the rescue.
The Rand went 40% down compared to 2007. The Finance Minister accepted an R14bn revenue shortfall while allowing R29bn of additional spending overruns (we now know). The SARB, not before time, decided to relent from December 2008, cutting rates by 0.5%. Oil dropped by over $110. Infrastructure spending continued at full throttle.
Yet in that very period, Lehman Brothers lost its battle and Paulson/Bernanke succeeded in frightening a world audience. The financial hit spilled over, pushing the world economy into deep recession overnight.
From October onward, it was obvious South Africa would be hit hard in a number of ways. Directly, there was to be fallout for our exporters. Indirectly, would external financing remain accessible?
This kind of shock event needs to be addressed on two levels. Foremost, the currency needs to absorb part of the external shock. And domestically there needs to be accommodation.
Happily, imported oil turned out to be our biggest shock absorber, falling over $100, thereby neutralizing most of our export commodity price declines. Although the Rand still needed to complement the oil shock absorber by also declining to compensate for net export volume losses (possibly of the order of 0%-5% this year), not all the burden would fall on it.
The Rand settling at 10:$ may have been enough, but coming months will tell whether more would have been better.
Meanwhile, what’s the use of accumulated economic strength if you don’t use it?
The Finance Minister has reduced the national debt from over 50% of GDP 15 years ago to nearer 22% today, allowing his budget two years ago to gradually drift anti-cyclically into surplus.
Following last year’s many hits to the economy, not only did he need to cover the revenue shortfall without cutting his spending, but ideally he would find ways to increase critical spending to prevent too much of a slide below growth potential.
The Minister did so by allowing a swing from 1% of GDP surplus to 4% of GDP deficit spread over two years, with half the swing accounted by tax shortfalls and half by extra spending, mostly focused on the poor.
Meanwhile what’s the use of high real interest rates? Well, you can cut them drastically in an emergency. From prime 15.5% in the crisis month October 2008, the SARB cut by 0.5% in December 2008, and by a further 1% in February 2009.
Further 1% cuts are expected in March and April, and possibly June 2009, with 0.5% rate cuts also still possible, prime now aiming for 10%-11% by 3Q2009, as already fully discounted by markets, realistically so.
Also, with political pressures independently building to do more for the poor, these stressful times create the opportunity to increase public spending on the poor without too many questions asked.
Exactly that has happened.
In this manner we are now addressing four shock demands within a year, counting local electricity and politics, and global commodity and financial upheavals.
Cees Bruggemans is Chief Economist of First National Bank. Register for his free e-mail articles on www.fnb.co.za/economics
Go to www.ipsinvest.com for more information.
Friday, January 30, 2009
2009 – A year to be creative!
Scott Picken, CEO IPS, Jan 09
I have been asked to try and understand the property market in 2009, an interesting task! At the end of 2008, we spoke of the challenges of 2008 and the exciting opportunities which were before us in 2009. The global community has undergone a paradigm shift where what was common practice has changed, and global markets, banks, companies and individuals are coming to terms with the new era of doing business in amongst this uncertainty. The Chinese only have one word for ‘crisis’ and ‘opportunity’, ‘wēijī’ and I firmly believe that if one can see through the short term situation, focus on fundamentals and act on these principles, they will find that the genuine value they invested in this year, will provide the opportunity to set themselves up for life! To achieve this though, you will have to be creative to overcome the obstacles.
The year begins with allot of hope and possibly the biggest example of the impossible becoming possible with Barrack Obama being sworn in as the 44th American President. He has completely challenged normality and won and now USA and the global environment rest on his shoulders in the hope that he can resurrect the global economy. He won buy being creative, by changing the way things were done, by communicating through the new technology mediums and most importantly by reaching the hearts and minds of the people on the street. He won by thinking out of the box and turning the crisis into his biggest opportunity!
In the South African market, many people have been hesitant about property in the last 18 months. However there is now real value, rents are rising and interest rates are coming down. South Africa has been slow in reducing interest rates and this can be seen by Australia. Since September 08 they have reduced their interest rates by 30% and it has had a marked affect on the market, with momentum really starting to come back into the market. I believe South Africa is 6 months behind and the expected rate cut in February and March, will begin to stimulate the market like in Australia. The biggest challenge in any market is calling the bottom of the market. I personally believe you can only ever call the bottom in hindsight and that you need to evaluate every opportunity, based on its potential. The second biggest challenge you currently have at the moment is you can find a ‘no brainer’ of an investment and still battle to get finance. It will be a time to get creative! Keep your eye open for some of the first investments opportunities for 2009.
However to start with, get your momentum going; watch this great video to help you achieve the most of your potential in 2009! – click here.
I finish with a saying my mother gave me at the end of last year, “Rather than worry about the storm, learn to dance in the rain!”
Be creative, have a great 2009 and get started!
Regards
Scott Picken
CEO, International Property Solutions (IPS)
www.ipsinvest.com
I have been asked to try and understand the property market in 2009, an interesting task! At the end of 2008, we spoke of the challenges of 2008 and the exciting opportunities which were before us in 2009. The global community has undergone a paradigm shift where what was common practice has changed, and global markets, banks, companies and individuals are coming to terms with the new era of doing business in amongst this uncertainty. The Chinese only have one word for ‘crisis’ and ‘opportunity’, ‘wēijī’ and I firmly believe that if one can see through the short term situation, focus on fundamentals and act on these principles, they will find that the genuine value they invested in this year, will provide the opportunity to set themselves up for life! To achieve this though, you will have to be creative to overcome the obstacles.
The year begins with allot of hope and possibly the biggest example of the impossible becoming possible with Barrack Obama being sworn in as the 44th American President. He has completely challenged normality and won and now USA and the global environment rest on his shoulders in the hope that he can resurrect the global economy. He won buy being creative, by changing the way things were done, by communicating through the new technology mediums and most importantly by reaching the hearts and minds of the people on the street. He won by thinking out of the box and turning the crisis into his biggest opportunity!
In the South African market, many people have been hesitant about property in the last 18 months. However there is now real value, rents are rising and interest rates are coming down. South Africa has been slow in reducing interest rates and this can be seen by Australia. Since September 08 they have reduced their interest rates by 30% and it has had a marked affect on the market, with momentum really starting to come back into the market. I believe South Africa is 6 months behind and the expected rate cut in February and March, will begin to stimulate the market like in Australia. The biggest challenge in any market is calling the bottom of the market. I personally believe you can only ever call the bottom in hindsight and that you need to evaluate every opportunity, based on its potential. The second biggest challenge you currently have at the moment is you can find a ‘no brainer’ of an investment and still battle to get finance. It will be a time to get creative! Keep your eye open for some of the first investments opportunities for 2009.
However to start with, get your momentum going; watch this great video to help you achieve the most of your potential in 2009! – click here.
I finish with a saying my mother gave me at the end of last year, “Rather than worry about the storm, learn to dance in the rain!”
Be creative, have a great 2009 and get started!
Regards
Scott Picken
CEO, International Property Solutions (IPS)
www.ipsinvest.com
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