Banking on a Happy New Year

After all the bleak and depressing headlines this year it was good to hear that not all of us have lost heart in the property market.

Despite the continuous bad news headlines churned out by the lenders and the media, it’s heartening to hear that South African women see a light at the end of the tunnel.

There has been a lot of talk about the global recession in 2008 and whilst South African consumers anticipate the unexpected in property, it seems we are set to enjoy the impact of the decline in inflation along with a decrease in interest rates earlier than anticipated.

The author has been talking to South African women and asking them what they think about the past year and, more importantly what they believe we’ll be facing in 2009. It seems South African women are definitely more positive about 2009 than the men are. Here are a few of the reasons for this new found optimism:

Kgalema Motlanthe’s appointment as interim president is definitely positive and shows that the post Polokwane leadership can make decisions that are for the good of the country. Most women feel Barbara Hogan’s appointment as Health Minister can only benefit the country in terms of improving health services. Falling food and petrol prices will ease South African pockets. Interest rates must fall in 2009 which translates into many not having to face negative equity issues and auctions. The upcoming elections may well change the face of South African politics An increase in positive sentiment toward emerging markets should result in the rand finally regaining some stature. Many agree that NOW is the time to buy property Trevor Manuel’s anti-cyclical policies have helped prevent recession The recent election of President Obama to the White House is believed to offers firm stance against violence and HIV/AIDS in Africa

It would seem that South African women are starting to see signs of a slow but certain recovery. We interviewed some of them to get their opinion on the year past as well as their wishes for 2009.

Sheena Maree of Sotheby’s International discussed her thoughts on the current situation with Her Mortgage. “The banks are out there for themselves. They have survived on the backs of their clients, so they should now hand on the benefits they are recouping to the consumers i.e. when the interest rates come down, pass it on to the consumer immediately – not a month later!

Sheena believes that buyers will definitely have the pick of properties right now, an opportunity which may well be lost if buyers hesitate on the brink of dropping interest rates, especially in coastal towns. For 2009 she would like to see the banks provide an efficient financial education service for women in a manner that they are not in awe of.

Lynne Norman, a certified financial planner told the author:

“South Africa is definitely not in a recession. The National Credit Act stabilised the country. Although it was a pain to consumers initially, it has made a huge difference between what is now happening in South Africa compared to the rest of the world and for that, we can be thankful. Banks had to assume responsibility for consumers spend.”

Lynne expects an interest rate cut in the first half of 2009 followed by a quick upward movement in the property market as buyers realise they may well have over judged the slump and be losing out. On her wish list for 2009 is a request that South African banks adjust and take a long, hard look at themselves, implementing plans that help and not hinder the South African Home owner such as adding dread disease and unemployment insurance as an option to mortgages and offering automatic extensions on mortgages where home owners are struggling.

“It’s time South African banks take the squeeze off the consumer. The big four should readdress the moratorium they have placed on interest rates and try to be original, allowing competitive banking. They have been looking after their own interests for too long and the consumer is wising up!”

Her advice includes putting your credit cards on ice and buying for 20% less than you can afford.

Julie Godley, a single mom in Cape Town, believes interest rates will be lowered soon and the banks should restore access to bond equity. She’d like to see the banks offer single parents more assistance with home loans and be able to feel more secure about approaching the lenders during hard times.

“The banks didn’t take me seriously when I needed to secure a home loan to house myself and my son. I had to use an accountant to get a bond. I think they’ll need to take women more seriously as they consider the percentages of women who are single and are prospective buyers.”

Deborah Scott, a single mom and well established property consultant with Pam Golding Properties believes the market has already begun to pick up and will strengthen in early 2009 with ‘semigration’ being the buzz word in the coastal regions, particularly among divorcees seeking security and investment.

“Hang on to your homes, maintain them and put any surplus cash into your bond. Lower your lifestyle expectations for a while and stand to gain on capital growth.”

The author asked what she would wish for from the banks in 2009. “I’d like to see the banks mirror the ‘one year free’ settling in period on cars extending it to bond repayments for single moms.”

It would seem that this new found optimism is based on the old premise that what goes up must, eventually, come back down.

Combine all this with the recent House Price Index release that clearly shows that whilst the property market is slow, it’s not dead yet!

When trying to sell, it’s wise to bear in mind that extreme municipal rate increases also contributed to the glut of properties now seen on the market and as we all know a surplus of anything causes prices to drop as the competition to sell heats up. This should alter as the first buyer’s market starts to move again with the lowering of interest rates and begins to affect movement further up the ladder.

Women need to be right at the front when the market alters in late 2009 and now is the time to start preparing.

“During this period, women must be at the forefront of driving economic growth and must take advantage of the new opportunities that will emerge.” — Ms. Elizabeth Thabethe, Deputy Minister of Trade and Industry

Suze Orman has recently released her latest book ‘Women and Money’. In it she talks about the capacity South African women have to ‘invest, save and handle debt just as well and skilfully as any man.’

The author believes this as strongly as Ms Thabethe and Suze Orman do and our New Year’s Resolution is to encourage, inspire and help each of you achieve financial security through articles that inform, tips that assist and other women’s examples of how they recovered financially after divorce, hung on to their homes during 2008 and turned their lives around by taking charge of their finances.

Let’s see what Trevor has to say on 11 February!