What South African property investors urgently need, says Bill Rawson, Chairman of the Rawson Property Group, are simplified analytical charts comparing the performance of residential property in both freehold and sectional title property in all areas – and these should be compiled in such a way that even those totally unfamiliar with property can see at a glance where the fastest appreciating properties and the best returns are being achieved.
These remarks by Rawson follow on from a visit that he recently made to Sydney. Here he found that the highly sophisticated property media are able to give any enquirer the data he needs to make a well-informed decision – and they do it in a very easily assimilated form.
“The big difference between the South African journals, which tend to cover all aspects of property, and the Australian journals is that some of the latter place the whole emphasis on the investment potential, ignoring such as matters as design, landscaping and other interesting topics. Australian magazines such as Smart Property Investor, Smart Investor and Australian Property Investor focus entirely on the potential returns from the capital appreciation and rental viewpoint. If one takes time to read through and assess this data I would imagine that it would become extremely difficult to make a bad investment decision.”
Typically, said Rawson, the analytical charts cover every area of Australia (including Tasmania) and give such information as the current median price, the year-on-year growth rate, the average rentals, the average rental yield in relation to the investment, the average number of days the unit takes to sell, the current vacancy rates and the average household incomes of people living in the area.
“While it is true that in South Africa we have highly efficient property analysts such as Lightstone and Propstats, they do not make quick comparisons between the areas nearly as easily as the Australian journals do. One set of data, in Smart Property Investor (which covers all types of investment, not just property), gave all the relevant information for Australia, with a brief comment on each area from an independent expert, in 16 easily read pages — one need go no further to find the information required.”
As a result of having such easily assimilated data at their fingertips, said Rawson, Australian investors he found are better informed, shrewder and far more locked into property as their prime source of income than South African investors.
“One of the surveys I read,” said Rawson, “indicated that one in 12 Australians has a share of some kind in property apart from his primary home.”
In 2014, property in Australia outperformed any other asset class, including government fixed rate bonds and the stock exchange.
“Of course,” added Rawson, “the popularity of this type of investment is greatly enhanced by the very substantial returns that have been achieved recently. The data charts that I have mentioned indicate that year-on-year 20% plus capital growth on homes and sectional title units has been achieved quite regularly in many high demand areas. Furthermore, one of the charts showed that growth of below 4% occurred in only eight of the 48 areas reviewed. Only one area, Clarendon Vale in Tasmania, actually showed negative growth and it is worth noting that even there the commentator predicted an eventual upturn.”
In another statement, Rawson has commented that the property boom in Australia is a result of not only of political stability and giving great encouragement to foreign investors, including the Chinese, but also because of the exceptionally low interest rates – which at the moment are in the region of 4,25%.