Discussions with a wide spectrum of the senior delegates from 52 countries who attended the 2012 National Association of Realtors Expo and Convention in Orlando, Florida, USA, says Tony Clarke, Managing Director of the Rawson Property Group, have confirmed his view that:
- 1) The future of the global economy remains decidedly uncertain.
- 2) Whatever happens in the USA will inevitably have serious implications on the South African economy.
- 3) A great deal still needs to be achieved to prevent the disintegration of the Eurozone.
In the medium term the prospects for the USA are encouraging as they are underpinned by an improved economic situation and a new energy boom.
Although the future of the global economy is not set in stone, said Clarke, there are still a few positive elements that we can hope to see unfold. The Federal Reserve System in the United States has expressed its intention to buy $40 billion of mortgage-backed securities every month until they hit an unemployment rate of 5.5%.
The implications that this will have on the property industry, added Clarke, is that we can expect to see a sharp rise in property investors in the US, due to extremely low mortgage rates and a sharp decline in home prices. The current mortgage rate in the US is 3.5% and it is expected to drop an additional 0.5% within the next year. This coupled with the fact that home prices have fallen, on average, by 35%, means that homes are becoming very affordable and that home sales have risen swiftly.
Hopefully, says Clarke, South Africa will follow a very similar trend now seen in the US because the demand for houses is rising so fast, due to the previously mentioned factors, new developments will become necessary, resulting in more available jobs. The demand will also cause home prices to climb and people will no longer owe more than the value of their home.
Clarke said that the Rawson Property Group had been one of the largest delegations at the NAR convention and those who attended, mostly top performers and management staff, had learned not only a great deal, especially about marketing property locally and internationally, but also had bought back the IT software to facilitate this and other aspects of property management.
“Every one of the Rawson Property Group team at the NAR Convention,” said Clarke, “has acquired data and tools to be more effective. This has reinforced my conviction that attendance at this convention is almost essential today for a real estate group continuing to grow, as we are, at around 36% per annum.”
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