 Good evening and welcome to episode 396 of the Private Property Podcast. I'm your host, Usamandamu Akumalo. It's the Wednesday edition of the Private Property Podcast. If you join us for the first time, a welcome to the family you tuned into the early daily property show in South Africa catering to your property needs. And to all our regular viewers on Facebook, on Instagram, and on YouTube, welcome to it. You know how we do every single weekday, you and I have an appointment when we're always in conversation with a property expert who helps us make better property decisions. And of course, talking about better property decisions, you know that we've also got a whole host of great shows every single weekday at 8pm that you can tune into. As it is a Wednesday, you can catch Estie Carson on the first time home buyer show where she's always in conversation with a property expert who's not only walked that first time home buying journey, but has gone on to grow their property portfolio from strength to strength. If it's Tuesdays and Thursdays, I'm going to bring you the farming podcast tacking all things agriculture. And on Mondays and Fridays, the child brings you the home shopper show where he takes you through incredible properties that you can find on www.privateproperty.co.za. Well, those are the great shows that you can tune into every single weekday at 8pm. Remember to also follow us across our social media pages. You can also follow myself at 721 underscore K on Instagram as well as on Twitter. Now, talking about our social media platforms, you know that on our Facebook page, we're running an incredible competition. We're used to having a chance of walking away with 500 grand in cash every single evening right here on the show. And all you have to do to walk away with that cash prize is to first comment on the pinter post on our Facebook page, but we want to find out the grade property insight advice that you've picked up from watching the show. And of course, your name will go into a lucky draw where every evening we put out one lucky winner that can walk away with that cash prize. And you have to be watching us live and of course, clean that prize while the show is still on. And in the event where the lucky winner does not do so, it of course rolls over into the money bag and the money bag just keeps getting bigger and bigger. Well, those are some of the great ways that you can get in touch with us. And of course, there's a chance of walking away with some cash right here on the private property podcast. Now yesterday, unfortunately, our winner did not claim their price. We've put a thousand rands in the money bag that is certainly up for grabs. And you can find out later on on the show who the lucky winner is. And I hope that they'll be able to claim it. So first of December, I can't believe how quickly time has flown by. I was even saying to my guest of air that it seems as though the year certainly is in a rush to end. But before the end, one of the things that we loved doing and did this last year is of course, firstly, reflect on the year that was and then look at the year coming up. Many people who have an interest in property want to be able to use some of the, you know, the insights from the year and the years that was and of course, looking at what they can anticipate for the upcoming year. And that's exactly what we're going to be doing this evening, exploring will 2022 be a good year for property buyers and help us best make sense of this, what we should be looking out for, what are some of the factors that we need to be mindful of and certainly be on top of if you have an interest in buying next year. I'm joined by Barry Swart, who is the head of operations at Gumtree, South Africa. Very good evening and thank you so much for joining us on the show. As I'm a very nice to be with you. Thank you for the opportunity. It's such a pleasure, Barry. I think before even look at 2022, let's first have a look at 2021. I mean, the realities we've now had more than a full year of living in a COVID era world and having to make different decisions and adapt. But also we've had an opportunity to look at certain trends for over a year. It's certainly been nearly two years now. And then what would be some of the trends that you've already spotted, especially even on your platform when it comes to property trends, from both buy side and even sell side, that I think our viewers will find interesting when we explore the year that was in real estate. Yeah, I think a couple of trends that we've noticed some is there's definitely been a lot of listings that on not just on Gumtree, South Africa, but on a number of property platforms around the country where a listing leads with the title price reduced, which I think is indicative of another number of factors. But one of the things that's definitely come to light is that there have been a lot of sellers who maybe have got a little too much invested in their property. And when the time comes to sell, there's a lot of emotion that goes into it. And the best advice that I can give is get professionals on board to have a look at what the prices are in your area. Prices have fluctuated dramatically in the last 18 months. And it's very important if you are a serious seller to price your property correctly and professionals in real estate agents can certainly help you with that. So that's the one thing that we've seen. The other thing that we've definitely seen is that there's been a massive increase in rental properties, the number of rental properties available countrywide, but particularly in the big metros. And I think a big reason for that is that there's been a lot of uncertainty, not least of which being COVID. And because of that, there's been an injection of properties that may have previously been short-term rentals that have been put on to the long-term rental property market. So supplies up and as a result prices are down, tenants certainly are holding many of the cards where previously a 10% rental escalation was the norm. You now start seeing markers like one month deposit as opposed to the traditional two months being asked by landlords. And it's certainly true that if you have a good tenant in place, it's in your best interest to hold on to that tenant. And we start seeing markers on property listings for rent, where that certainly is the case. Another thing that we've definitely seen is the boom of what were traditionally small coastal towns that are popular with retirement, popular with holiday making and so on, which have seen property prices boom as people are no longer required to live in the big centers and very often in the heart of the CBD, where rental prices are high, sale prices are high because they simply don't need to be there anymore and remote working is becoming far more of an option. And a lot of companies are going full remote working or where there is an option to do a hybrid, they're making use of those. And so we see the changing geographies for property demand, both from a for sale point of view, as well as from from a rental point of view, which is something that I don't think will slow down too much in 2022, but it's certainly been a trend for the last 18 months to 24 months. And I mean, I'm interested to find out from you if there were any surprises in terms of, you know, some of the trends activities that you spotted in the past year, perhaps relative to pre COVID era, that you really didn't anticipate and and it may have been something that kind of happened once off or certainly is still prevailing even to date. Well, one thing that we couldn't have predicted from from COVID or could have perhaps predicted is the boom in the digital economy. And that's not only isolated to the property industry, but all industries have been affected by this. And it's really that South Africa has almost been thrust into the digital era. You know, we at Gumtree don't only focus on property, it's a marketplace that has a number of verticals, including, you know, property, goods, jobs, autos, and we see it in all of these sectors that we've really been pushed into the digital age. And as a result, people can really can work from anywhere. There are a number of PC related jobs where you really just need a connection and you can work from anywhere. So those users who traditionally would have had to commute into an office, commute home from an office and be in a central place where there's definitely merit in the culture that's that is built by teams working together side by side in the space. It certainly is a possibility at least to work from home and either have that full remote opportunity or at least at the very least a hybrid that you can that you can rely on. I'm seeing the lab that we're getting on our Facebook page this evening as we're in conversation with various structures ahead of operations at Gumtree, South Africa, looking at World 2022 be a good year for property buys. I see Glech, Rinda, Bungani, Queen B, Mabunda, Matha, Shinganga, watching Michelle Bomerans, also watching, sending those green hearts. Varanasi, Diki, also watching Tashi, Comps, watching there. And I know that Matha, Shinganga, Ella was saying that this is such a great topic for us to explore, especially given that we're going to be going into the new year. So we really want to get a good understanding of what we should be anticipating in the what buyers are going to be looking out for. But before we even get to that, last one, very on 2021, when you look at some of the the behavior, some of the things that people who are specifically on your platform were looking for, what were some of the key amenities that they were looking for? Because I think oftentimes when somebody's looking for suppose an apartment to rent, for instance, you're very clear that you're looking for a two bed with two baths in your ex particular area, what were some of those key things that became very important as people were searching, particularly for their rental property? Definitely work from home opportunity. So whether it's a feature that you mentioned previously in your listing, there was always a separate entrance work from home or the types of keywords that we're definitely picking up on at the moment. People are looking for good, strong internet connection fiber. And those are the sort of things that are almost making the highlight of the checklist when people are advertising their property for rent these days, which again speaks to the opportunity to be able to work from home, work remotely. Another thing that we've seen is strangely enough because of all the lockdowns that we've seen, there's an opportunity for a lot of renters to rent up. So where previously your rental was limited by the budget that you had and your budget was dictated very often by your spending on other things, very often we've seen there's an unusual opportunity to save that COVID and lockdown has brought. And so the spending power of individuals has often become higher. And that being married with the reduced property of at least the reduced price of rentals, it makes for a nice combination where renters can actually get a bigger space or a better space that they may previously have not had within their budget. So we've definitely seen that those things have made a change as well. And taking more of your comments this evening, Christine Chaba also watching Happiness Magnelega saying looking good Zama. Thank you very much. The happiness Magnelega saying gorgeous. Zama, thank you very much. Polina also watching. I want us to quickly go for a break. See who the lucky winner of the 1000 Rounds that is in the in the money bag is. And I want to come back with them going to be looking at 2022. You know, what are some of the key things as sellers? We need to get right for serious about selling. What are some of the key things buyers are going to be looking out for? I think one of the things that we've certainly picked up in the past two quarters already is that there's a lot of stock on the market, both from a rental perspective, but also from selling. There are a lot of owners who are putting their properties on the market and some are putting rental properties or investment properties on the market and really offloading some of the assets in their portfolio. Others are looking to other upgrade or certainly downscale and so putting their primary residence on the market. So we're going to be looking at what are some of the key features that buyers are going to be looking out for and how you as a seller at home can best position yourself to be able to sell your property as quickly and as efficiently as possible. But in the meantime, let's have a look at who the lucky winner of that 1000 rand cash prize. And that lucky winner this evening is the lucky winner of the 1000 rand that is in the money bag. I hope that she is watching and of course will drop us a message to claim that prize. Do make sure that you drop us a message 1000 rand is up for grabs. That is of course our lucky winner this evening. But to continue our conversation with Barry Swart, the head of operations at Gumtree, South Africa. Barry, before the break, we were reflecting a lot on the year that was some of the trends that we've picked up and I think some of the key activity that we saw in the market. But looking now at 2022 and with a focus on buyers, I think let's first have a look at what are some of the key things buyers are typically going to probably be looking out for in a property that they want to buy? Well, as I said, the one thing that's definitely prevalent is the increased ability to save. So buyers potentially who have similarly been locked down, there are a lot of cash buyers out there. The ability to save and be forced to save is now kind of better than ever. For those who do need to borrow though, there's definitely good news and even though just last week we saw the repo rate increase by 25 basis points, it has gone up, but it's gone up for the first time in three years and that off the back of 50 year lows. So the banks are very keen to lend. There's a lot of competition between banks and very often you will get prime less percentage from some of the banks who are competing for your business. So banks are keen to lend, buyers can get their mortgages approved far more easily and that's definitely something to make buyers happy as we head into the new year. So if you are in a position to buy, there's never been a better time to borrow, but there's also never been a better time to buy. So that's certainly good news for buyers that I would say is something that we can look forward to in the new year. And I think then when we look at the sellers, the unfortunate thing and we're going to come back to the buyers, but we're going to look at the sellers. The unfortunate thing with sellers is sometimes they tend to be a lot like landlords where they want, they want, they wanted, they wanted at the price point and sometimes that price point isn't based off where the market currently is or what the market trends currently are. What are some of the things that sellers are going to have to get right if they are serious about selling their property as quickly and efficiently as possible? That's definitely true. The one thing that is absolutely true is even investors who may have a decent property portfolio tend to buy more than they sell. Selling is a particular thing that requires professional assistance to understand the market, to understand exactly which properties are selling and for how much in your area at the time that you want to sell to make sure that you are able to price your property correctly. It's the reason I feel or a big contributing reason why we see so many listings begin with price reduced. And the unfortunate thing is that those prices, once they've been on the market for a certain above market price, it does tend to give you the assurance that maybe you haven't priced your property correctly and are now forced to reduce your price if you want to attract buyers. So my advice there certainly is if you are a seller, maybe consider holding on and renting out your property instead. But if you are a serious seller and you're looking to move your property in a decent amount of time, my recommendation would be strong to make sure that you get the experts in South Africa has got an exceptional property agent network and to get someone who's a specialist in your area to help you price your property correctly. That would be the best advice that I would give someone who's serious about selling their property. And I think if anything, they're also able to go to privateproperty.co.z and be able to get in touch with some of those various state agents who are experts at this and various other experts who can help them better navigate that journey. Going to more comments on our Facebook page, we've got Christine Dichara saying the process is stressful. Pre-occupational bond transaction versus cash transactions, duration, addendums to the offer to purchase, municipal hiccups, etc., cancellation of transaction and cost involved, may it be a better year. And that's of course the process of selling. I think we underestimate how stressful that can also be. We often enjoy buying and that's also admin intensive itself. But on the south side, there's also as much admin and I think it's also very high stake activity to sell your property. Sometimes the very last minute, the bias funding can sometimes lapse because the nature of their finances have significantly changed. So it's just as stressful to actually sell a property, especially when you really want to offload that property or you're looking to upgrade and you need the sale of this property in order for you to afford that one. I think on that point, I would just say that South Africans are extremely resilient. I think the last 24 months have certainly taught us that. So yes, absolutely, it can be an extremely stressful process both buying and selling a property. In professional hands, there is help out there that can help you to get your transaction across the line. But to that comment, I would say absolutely, if we can make it through the last 24 months and what we anticipate in at least the first quarter to six months of 2022, South Africans are an extremely resilient bunch and we handle stress particularly well. So I would think that we can make it through a transaction for sure. And talking about even some of that, the resilience that we have as South Africans with a comment here coming through from my question is saying, we can expect rate heights for the near future, run your numbers before signing the offer to purchase. And that's a big one, right? I think we know we're not going to see rate heights as rapidly as we saw them decreasing. But we also know that them going up is relatively inevitable. So understanding the finances becomes such an important factor whether you're looking to buy your primary residence or of course looking to buy an investment portfolio. And I think, Bear, I think when we look at even trying to, I'm going to call it timing the market. Although I hate that phrase because I know it has a certain type of connotation, especially in the stock market, but how should people be looking at when to best buy, especially those who are looking to buy investment properties and really not look, so they've got a primary residence and now they're looking at an investment property. We've seen the first rate height last week and they're now, especially the newbies, because I think they're the ones who are more likely to think at this granular level around the uncertainty of when exactly to buy, whether to use low interest rates as the only factor or the leading factor in whether or not they should be buying an investment property or not. What are some of the factors should they be considering holistically beyond these historically low interest rates? Well, one thing that I would definitely recommend is diversification. I understand that there are investors who are extremely bullish about property and put everything they have potentially into property. I certainly am a big fan of property as an investment. My recommendation to anyone who is kicking that question around is don't put all of your eggs in one basket. Get a sense of how much deposit you are able to put down. Get a sense of how much you would need to borrow and don't stretch yourself too thin. The other problem, of course, is there are many tenants who are also affected by COVID and other issues potentially where they're not able to service their rental. If your reliance is 100% on that rental coming in to cover your bond, you may well find yourself in trouble. Don't borrow to the extent where you need to put down so much that if something has to go wrong and you're not able to bridge the gap for a month or three or five, you are probably going to run into some trouble. If you are looking into something and you've not had a rental property before or an investment property before, my recommendation would be to start small. It's actually a much nicer feeling to build your portfolio up to three or four or five smaller properties as opposed to having all your eggs in one big basket. If something were to go wrong with that and you are sitting with a vacant property for a number of months for whatever reason or worse still, you've got a tenant who potentially is unable to service their rent and you end up having to go through an eviction process, it can be a very expensive lesson to learn. My suggestion would be do the numbers and, when necessary, get a professional to assist you through that process as well. There again, there's plenty of advice that can be sought for helping you to get the right tenants in place once your investment property is set up. And number two, make sure that you try the banks. Don't necessarily go just to the bank that many bond originators are able to help you there again to get you the very best interest rates from the bank who are absolutely at this time competing for your business. So do a bit of homework. Don't take the first offer that they give you because many of the banks will extend a mortgage to you at this stage, but it's definitely in your interest to try and get them to compete for your business. I think that's such an important thing to take note of. The importance of not overgearing. I think sometimes when you're still new in the game, people tend to do this quite a bit. You have to be careful with that one, especially these historically low interest rates. I think it's easy to fall prey to overgearing your portfolio and finding yourself in a particularly difficult position at the moment the interest rates slowly go up. And when we look at the buyers and doing some kind of expectation management as it were is in as much as on the one hand, there's certainly spoke for choice and there's quite a lot of stock on the market that they have access to or can certainly have their fair picking at. How can they best expectation manage themselves in terms of what they want to pay? Because one of the other things that I'm seeing is that there are properties that are overpriced. So I don't even want to have a conversation with those. They are those that are priced well. And then you have buyers who almost as a principal want to always make cheeky offers. And I mean, I am very big on cheeky offers and ever so often especially with commercial properties, I'll make a cheeky offer. And some of them have actually been accepted. Some of them don't get accepted. But you of course can use that as a principle all the time because there are certain properties where when you do your market analysis, you know it's priced well. At most maybe you can get like what less 5% but because it's just priced so well you're not going to get away with anything less than that. How can the buyers better manage the expectations when it comes to how low they can drive prices? Because I think there are some especially some of the first timers that are starting a dissolution about what kind of things they can use to help drive that asking price down. Yeah, as is true of anything in life, if you don't ask, you don't get. So I happen to be a fan as well of making a cheeky offer. But a buyer should be aware that in the entry level price bracket, so properties between 700,000 and 1.5 million in the right location, stock of those is very limited. And it's limited for the reason that there are a lot of savvy buyers out there who understand that at that price point what a property is worth and what they should be paying for it. Things that buyers should look out for is what is the condition of the property. Location of course as the saying goes is number one and is the most important thing. But what you don't want to be sitting with is you've managed to secure a property for let's say 1.2 million. But once you've gotten in there, you realize that you in for maybe another three or 400,000 to get it into a rentable state or a state that it'll be in demand for by tenants. Because once again, tenants at this stage are holding all the cards and tenants can afford to be picky. So if it's going to cost you another three or 400,000 to get it up to spec where it'll be in demand from the tenant pool, then it may well not be the investment that you thought it was going to be. So those are the sort of questions that buyers should definitely be asking. In the higher price brackets, it's probably a better option to go in with a cheeky offer. But for the lower price and the entry level price, it's definitely worth looking at something. And if you see the right deal, I don't know with the investment properties that you have, when you walk into a place, you know. It really is a thing where you can go in somewhere and you say, yes, this is the right one. It's the right price. And then it becomes a very straightforward question of asking yourself, am I prepared to let this property go for the sake of 20,000 or 50,000 rand? And what does that mean on my monthly repayments? And so forth. So don't walk into it blind. Do your homework before you get there. Know what you prepared to pay, but also understand that you may well have to forego this property because in the entry level market, there is high demand from buyers to pick those up as soon as they hit the market. And you know, Bear, I think the same will also be said to the sellers that sometimes given the stage of their property, perhaps the highest amount it could sell for is X amount and there is a buyer who's putting in a service offer, and perhaps it may be 10,000 rands less than what they would have ideally liked. But when they look at how long their property has been on the market and other comparable properties, that's actually quite a good deal. Finding somebody who's already pre-qualified and who's really good to go has got a deposit that don't get hackled by 10,000 rands thinking, oh, but I really wanted to get, let's say, half a million and they're now only offering 490 when you know that you're serious about offloading that particular property and it's causing significant strain to your portfolio, especially when you know there's also strain that that particular property is causing to your portfolio. Totally agree. And sometimes, as you say, the price of holding on could be more than that 10,000 rand that you're holding out for. You know, the cost of having that property stand vacant without a 10 and potentially for another month or two while you were waiting for the right offer to hit could well outweigh the benefit of just letting it go for that 10 or 15 or 20,000. So as with the buyers, the sellers should also do their homework, know what their bottom line number is and stick to it. And I know it's very difficult, but removing the emotions from these transactions from both a buyer's point of view and a seller's point of view is a good tip. And I think, Barry, that's a great case to, you know, actually, before we leave it there, I want to ask the final tip for both a buyer and a seller for the new year. So for 2022, final tip for buyer and final tip for seller when it comes to firstly just getting their priorities right and getting what they want. So from the seller, you know that you want a particular property at a certain price point, whether you're looking for, you know, an investment property, of course, looking for your primary residence. And from the seller side, you're clear that you want to sell, whether you're offloading it because it's got quite a bit of pressure. It's applying quite a bit of pressure to your portfolio, or you're looking to upgrade, downscale whatever the case is. Any final tips for those two when it comes to what to do in 2022? Final tip for buyer is do your homework and know your numbers. And final tip for seller is do your numbers and do your homework. It's very important to know what you're looking for. As a new investor or as a savvy investor who's done this many times before, it's important to understand that you are as a property investor likely to buy more than you sell. Certainly that's what a successful property investor would aspire to. So when the time does come to sell, make sure that you get your pricing right, get the professionals in to help you right off the bat. And from a buyer's point of view, understand that now really is a very good time to buy, even though 2022 will likely see further price increases. We've not seen, I certainly haven't in my lifetime seen interest rates as low as they currently are. So there is definitely an opportunity to be able to still make use of that and the banks are competing for your business. So to your earlier point, if you don't ask, you don't get. So definitely put them up against one another and see who can give you the best deal. That's where we're going to end it off this evening. Thank you so much for joining us on the show. Great pleasure. Thank you very much for having me. And that is Barry Sartre, who's the head of operations at Gumtree, South Africa, wrapping up the Wednesday edition of the private property podcast with myself, is Amanduwa Kumalo. Unfortunately, our winner did not raise their hand. So we've got a roll over 1,500 rounds up for grabs tomorrow evening. Well, that's my cue to leave. We're going to be back on the screens tomorrow at 7pm from myself, is Amanduwa Kumalo and the rest of the team do watch out for SC class on the first time home by its show until they're hoping it's their home and staying safe.