2015 Year In Review – Grant Gavin
As the year draws to a close, I find myself reflecting on the year that was and the year that will be. In a momentary flash of inspiration, an idea began to take shape, and has resulted in the following series of posts I will be sharing, as 2015 bids us farewell.
I invited a few friends to guest blog and share their views and highlights from 2015, as well as their dreams and desires for 2016. The spectrum of writers is broad and I look forward to enjoying their posts together with you.
I am proud to kick off this series with my good friend Grant Gavin, whom I have know all my life. Grant is a Durban based property entrepreneur, multiple business owner and public speaker. The owner of RE/MAX Panache, he has worked diligently and with great passion to build a business that has close on 40% market share in North Durban.
I’ve been asked a few times to comment in the media about what my thoughts were on the 2015 year, and what I might expect for 2016. I always like to add a little bit of perspective first though, because quite often we hear economists and property professionals commenting on a national outlook, or even giving their ‘predictions’ based on what they feel might happen nationally. For me, that is only slightly relevant. So here’s my perspective, first and foremost.
I am not an economist. I don’t study trends, numbers, statistics and graphs pertaining to all the key indicators of an economy. I read the news like everybody else and I like to keep up to date with whats going on in the world, but any comment I give on the property market will generally have a more local perspective. As a property entrepreneur based in Durban, my two real estate offices sell about 40% of the residential properties in the North Durban area. And as you may or may not know, these areas are middle to upper income suburbs, and as such, most of the residents in these areas are not as affected by slight corrections in interest rates or economies, as much as the greater population of South Africa might be.
I don’t like making predictions. Lets face it, even the experts get their predictions wrong, and unless you have a crystal ball, its very difficult to commit to any prediction in our current world, which really seems to have gone a little crazy, to say the least. At home our Government is facing massive criticism from all sides with regards corruption and poor governance of their utilities and other departments. The situation seems to be sliding away a little too fast for my liking, making some major correction, or disruptive political event, a real possibility in the near future.
All of this makes people unsettled and I think, in 2015, South Africans have been more unsettled than at any point since 1994. Eskom blackouts, water shortages and unsettled consumers certainly do not help our cause for a good economic recovery. As we enter a period of rising interest rates, consumers have more than likely found 2015 to be quite a difficult year, and I fear 2016 will not be any easier.
On the International front, things are unsettled to say the least. For starters, economies that have had zero level interest rates since 2009 are now going to be facing rising rates, and this brings about economic pressure on consumers. As I type this, my wife and kids are on route to see her folks in Paris, and what would normally have been a safe commute and holiday, is now tinged with a slight element of fear given recent events in that beautiful city.
On another note, Donald Trump is currently the leading Republican candidate for the race to the White House, and I don’t think anything says “the worlds gone crazy” more than that. As excellent as he is in his field of expertise, if he gets anywhere near the White House, fasten your seat belts….
So how was 2015 you ask? Well, amidst all the chaos, we’ve actually had a really good year. Everything mentioned above is actually out of your, or my control, and therefore to let it affect your business is crazy. Sure, when consumers stop spending, or start tightening their belts, your business will be affected. You can either subscribe to the defeatist mentality that allows these environmental factors to influence your attitude, or you can focus on what you do best and make sure you’re the most positive kid on the block. Give yourself the best possible opportunity in any market.
So where to in 2016? Well, its definitely not going to get easier for consumers with more interest rate increases on the cards. The experts at ABSA have predicted 2% in interest rate increases over the next two years, which should be manageable for consumers provided that over that same two year period, salary increases are enough to balance the effect. Again, putting it into perspective, a 2% increase over two years means prime would be at 11,75% which is still historically low for South Africa. So really no need to panic, or pack for Perth.
So its all fairly positive for us here on the North coast of Durban. Or at least until the next Eskom shut down, or the day Donald Trump makes his mark on the world…..
Here’s wishing everybody a super successful 2016.