But the best time to buy property is now, he says, while we are at the bottom end of the cycle.
CAPE TOWN - Interest rates will be cut by ½% or more before the end of the year, according to Graham Power, the founder and board chairman of the Power Group. Speaking at the SA Property Investor Club Breakfast last week, Power says, “most people in property have taken a serious knock,” but he firmly believes the tide has turned and the worst is over.
Power has being in property, be it construction, development or otherwise, for about 27 years and has “bumped his head and nose many times” but has come out smiling and runs a business today that employs close to 2 000 people. He has seen a number of market shifts in his day and believes “this is the worst cycle we could have imagined”.
Among his successes Power counts Thesen Island in Knysna (it both lead developers and constructors) as his most successful, he was also the main contractor on a number of golf projects including Pearl Valley, Pinnacle Point and Pezula. His core business is however, centred on infrastructural projects and it has have worked on road projects and developments around the country.
He is optimistic about South Africa and says the Soccer World Cup came at a good time for us – helping to balance the recession. He says if we had hosted the World Cup in 2006, during the “boom times” the fall out would have been far greater. He also thinks that people outside South Africa have more confidence in our country than South Africans.
He is excited by the prospects of South Africa and thinks Africa is the next “big success story”. Saying we have stability in our country thanks to sound economic polices.
At the moment “cash is king”, says Power, “the best time to buy is now, while we are at the bottom end of the cycle”.
Besides his property interests, Power also founded the Unashamedly Ethical campaign, which is a campaign promoting ethics, values and clean living, he started the global day of prayer movement and has co written a book called Transform your work life.
At the same breakfast I came across an interesting concept. Meyer de Waal, a practicing attorney and conveyancer, started a business called rent to buy.
A purchaser puts in an offer on a property and the bond is declined. Now although the purchaser does not qualify now, he may at some time in the near future.
The purchaser rents the property for the duration of the option period (six-24 months or longer), and assumes the responsibilities of a home owner. The purchaser will pay rent equal to the intended bond instalment. They are also liable for the rates, taxes and levies and will be responsible for the maintenance of the property as if they were the owner. Rentals will be insured and collected through a unique r2b Rental Insurance product.
Part of the programme includes home owner education and applicants can track their progress via the web or mobile phone through a dedicated mobile application: mobile2budget.
With nearly 50% of employed bond applicants having their applications declined every month this is a good opportunity for those entering the market for the first time to make the transition from tenant to homeowner and improve their credit rating so they can successfully make the transition.