 The pandemic delivered a devastating blow on world economies, including South Africa. And for us, first bits of data suggest that the economy contracted by over 50% on a seasonally adjusted and analyzed basis in the first quarter of this year. And that number puts us as one of the worst affected countries in the world. And of course, the economic weakness in the South African context predates the pandemic. What really happened is that the pandemic just exacerbated the already existing weakness in the South African economy, which then makes the recovery process a bit more difficult compared to other countries. Data suggests, looking at the data in its totality, suggests that it will take us a bit of a while to fully recover from such a massive impact. High-frequency data at this stage suggests that there's a bit of normality that is taking place at the moment. There is a recovery process that is underway at this stage. You look at retail sales data or shopping activity, which is a measure for shopping activity, suggests that there was a sharp impact particularly around April and May and now consumers are starting to go back to the shopping malls. They're starting to spend a bit more than during those times. So by all counts, it looks as though recovery is taking place there. The very low interest rates would have assisted the cash-strapped consumer. But of course, we know that that impact, the positive impact, the stimulative impact of interest rates is relatively short-lived. So we expect it to wane over time. But by all counts at this stage, data suggests that we are re-tracking the 2019 levels, but we are still a bit of a distance away from such levels. If you look at industrial production, which is a combination of mining and manufacturing output, which we measure, which we use as a litmus test for real economic activity, there seems to be some sort of recovery that is taking place after that sharp impact during the month of April and May, subsequent to that and as lockdown restrictions were lifted, output is starting to normalise and it is now re-tracking the 2019 levels, which were already low levels, I have to point out, but it is a recovery nonetheless. So all in all, the recovery is underway, but it looks a bit fragile at the moment. The biggest risk that we see at this stage is the potential of a delayed impact on the labour markets. Numbers are unclear at this stage, but large numbers are being thrown around, ranging from 1 million to 3 million potential job losses. And for a country with a 30% unemployment rate, that will really be devastating. The impact will be large and it definitely will undermine the recovery process that has started taking place. So all in all, the impact has been quite large, but high frequency data suggests that we are recovering, although we are still operating well below capacity at this stage. But third quarter data suggests that we will see much better economic activity in the third quarter compared to the first quarter. So we will definitely recoup some of the losses we suffered in the second quarter, but maybe not all of it. It might take us a long time before we fully recover from such a devastating impact. So what has been the impact on the property market? Quite an interesting question. It's a tale of two markets, really. On the one hand you've got your rental market and on the other you've got housing market. At this stage it appears as though the rental market has been disproportionately affected by the pandemic and of course the other side of the coin is that what has been a loss in the rental market has been a gain in the ownership market, in the home ownership market. At this stage we are seeing buying activity particularly from first-time buyers and first-time buyers that are under the age of 35, large volumes can't be attributed to that group of customers so those are buyers that tend to be sensitive to economic shocks and that tend to be sensitive to interest rate decision. So what has been driving this activity? We know that we are not creating new demand. We know that we are not creating new employment and so therefore we are not creating new demand. So what really is happening is that there is this ongoing shift away from renting towards ownership. So there is this ownership drive, if you will, that is taking place at the moment which explains why the rental market has been disproportionately affected by the pandemic. What are the drivers behind this? Well, the first and probably the biggest is the aggressively low interest rate that is taking place at the moment. The second one is good pricing in some suburbs particularly affluent suburbs, Yacu, Sentin, Laikyo, Kemsby, that seems to be attracting buyers, particularly first-time buyers. And number three, the lowering of transfer duties would have also assisted particularly for properties under one million value. So combining all these three factors means that affordability has improved quite significantly and data suggests that South African consumers are taking advantage of it. It did catch us by surprise. Not many of us would have expected this kind of activity that we are seeing in the middle of the pandemic. We did expect that the recover was going to be driven by first-time buyers but the timing of all of it was out in the latter part of 2020 and early parts of 2021. So timing did really catch us by surprise. And of course, the working from home arrangement would have assisted in this ownership drive. There is this perception that owning a home gives you a bit of more flexibility, so more of a conducive environment for working from home. So we are going to start seeing some types of properties gaining popularity in line with the working from home arrangement. So you're probably going to see properties that offer garden, properties that with an extra room for study, gaining popularity due to the changing needs of the South African consumer, mainly driven by this working from home arrangement. Again, the biggest question there is, will this kind of activity that we are seeing, will this be sustainable? I mentioned that we probably haven't seen the worst in terms of the labour market. We know that we are not creating new employment at this stage. So it hasn't been income driven. It's mainly been interest rate driven. And because of that, the stimulative effect of the low interest rate tends to be short-lived. It rains over time. And because it's not income driven in our view, is that once we start seeing large scale drop losses that will put downward pressure on activity and by extension it will push prices down. So at this stage it appears that this activity is probably not going to be sustainable for a long time. Once we start seeing some pressure in the labour market, it's likely going to taper off and prices are likely to then adjust from that point onwards. Now speaking about improved affordability and participation of first-time buyers in the South African property market landscape, what is the outlook on interest rate? How long before we start seeing hike in interest rates? Or are we going to see is the low interest rate environment a new norm? The sub came out a couple of weeks ago and suggested that their QPM model suggests that we should expect two interest rate hikes in the later part of 2021 in the third and fourth quarter of 2021. The market is already also expecting interest rate to start going up over the next two years. Our view is likely different. Our view is that with inflation being so low and with more pressure likely coming from the labour market, demand is going to take another knock, which will potentially mean that inflation will remain low for much longer than the sub or the market expects. So from where we stand, the potential is a room for one last interest rate cut and interest rate would remain flat after that throughout the forecast horizon. Over the next two years, even if there will be that pressure to hike interest rates, we don't think that it will be quite as an aggressive hike as the cuts wear. So even if there is a need to hike interest rates, it's probably going to be a gradual and a slow process. It's difficult to see aggressive hikes under the current circumstances with such high levels of unemployment, with such low levels of demand, with such low levels of inflation. It's just not easy to see that kind of a scenario. So by all counts, interest rates are probably going to remain low for a long time. Even if there is that pressure to hike, it's probably going to be a gradual process. It's not going to be as aggressive as the cuts wear. So in closing, the very low interest rates have been a major surprise factor in the property market. We are seeing a lot of activity, particularly from buyers that are sensitive to such decisions. But the biggest risk for us right now is the potentially delayed impact on the labor market, which has an impact of putting downward pressure on activity and by extension, downward pressure on prices. So in closing, I would like to encourage everybody to visit our FNB booth. There will be FNB representatives sitting ready to answer your immediate questions and there will be content for you to download.