Real Estate Investor Magazine South Africa April/ May 2020 | Page 4

EDITORIAL VIEW JOHANN RUPERT O N S H OW Turn the coronavirus crisis into opportunity 11:00 - 16:00 T he outbreak of the coronavirus, which causes the disease COVID-19, has made the world a little crazy. The coronavirus is wreaking havoc, governments are implementing lockdowns, creating mass panic, disrupting business and people’s lives as people start operating from home while productivity reaches all-time lows. It is causing global markets to crash, shutdowns in businesses and causing massive distress in real estate markets. FERNDALE | RANDBURG Property demand in Randburg is high due to the good value for money and accessibility to the Sandton CBD. 1 SMART HOME READY 2 ENERGY EFFICIENT 3 FIBRE CONNECTED 1 BED R569k N O T R A N S F E R COSTS Occupation expected end 2021. Only R10,000 to secure. C O N TA C T U S N O W 082 567 0735 r yan@r yansrealty.co. z a www.thebase .jobu rg If you are looking for solid cashflow, capital growth, and a sexy tax deduction, The Base ticks all the boxes. Contact us today for your Info Pack. 1 YEAR RENTAL GUARANTEE SEX13 TAX BENEFIT LOW LEVIES T&Cs Apply. Contact us for more info. As one might expect, caution and financial distress will increase in the short-term as the impact of the virus grows in more sectors. Driven by sentiment, it’s not surprising that the markets have already taken a hit and SA seems certain to be heading for another recession – recently the JSE suffered their worst day trading results since the 2008 financial crisis falling by more than 12% in a day. The rand has also taken a beating against the dollar and other major currencies at the time of writing breached R18 to the dollar heading for the weakest performance on record, including an official downgrade to junk status. Many small and medium sized businesses will also be at risk if government does not intervene. Retail landlords are getting huge pressure from retailers who cannot service their rents and the residential sector is experiencing the same problems from their tenants. There’s a lot of unpredictability with the coronavirus, and there’s a likelihood that it could first get worse before it gets better, that’s the bad news. Many people are uncertain about their futures both from a financial and health perspective. History reflects certainty and shows that while markets do take a fall during a crisis as a result of a virus outbreak, they generally fall sharply. However, they can also bounce back relatively quickly once resolved and we know that from great adversity comes wonderful new opportunities. In South Africa where the local economy has barely grown in the last 5 years, we believe that South Africans are incredibly resilient people in the face of challenges. Alan van der Westhuizen Head of Growth of Co-working office group IWG in SA says, “as the coronavirus becomes more widespread, many proactive entrepreneurs will use the social distancing and poor economic conditions to see how they can adapt and capitalise on the crisis.” According to Robert Kiyosaki, US real estate investor and expert says, “While a virus like this is never good news, it is making more favourable real estate investment conditions.” In the US, the Federal Reserve slashed mortgage rates for the first time since 2008. Rates for a 30-year mortgage in the US tumbled to the lowest on record. In South Africa interest rates were also reduced by 1% to 8,75% (from 9,75%) with more cuts to come. He says, “The challenge is now to be counter cyclical EMAIL [email protected] INTERVIEWS tv REItv while there is panic and pandemonium in the markets.” In SA currently, there will be blood on the streets and opportunities will arise. There is also a demand specifically for entry-level priced properties up to R1,5 million bracket but also a shortage of these well-priced properties. Social distancing, self-isolation and operating remotely are buzz words that we hear regularly around us in these challenging times. Tech is already impacting how people buy and sell property as we discovered at REI’s latest Digitalisation Summit in Johannesburg & Cape Town. As a driver of a new PropTech company we are constantly seeing consumers’ engagement habits changing all the time. They are looking for new solutions designed to solve immediate problems, saving them time and money in the process. In the current climate, it could well save the transaction too. We’re a mobile, technology-enhanced society and can and should be using all of the digital tools at our disposal to carry on normally until the worst blows over. Showhouses are cancelled until end of the COVID-19 lockdown and replaced with virtual reality (VR) tours to combat the spread of the coronavirus. This is just one example of tech working. Working from home and online learning have become the new norm for many South Africans. Many people are uncertain about their futures (both financially and from a health perspective). There are massive opportunities opening up for those of us that are prepared to take advantage of them. The recovery from a coronavirus-triggered recession will usher in a new era in which how we live, do business and how we invest will fundamentally change. If ever there was a time to draw on the world and our nation’s incredible ability to keep calm and take advantage in the face of adversity, this would be it. Understand in the knowledge that this too shall eventually pass. Stay safe and successful investing! NEALE PETERSEN EDITOR-IN-CHIEF MILTON FRIEDMAN “ “ SATURDAYS Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. FaceBook LIVE REAL ESTATE RADIO PodCasts SA Real Estate Investor Magazine APRIL/MAY 2020 3