 Good evening, and welcome to episode 361 of the Private Property Podcast. I'm your host, Osama Andouma Kumano. It's the Wednesday edition of the Private Property Podcast. If you join us for the first time, welcome to your daily dose of all things property, the only property show, the only daily property show in South Africa that caters to your property needs. Welcome to the family. It's absolutely great to have you with us for the first time. We hope you like it. Just stay around and of course, do make sure that you go to our Facebook or YouTube pages to catch up on all the great episodes that you have already missed on. You can of course also catch up on all the great episodes on Spotify and Apple podcasts or whatever you'll get your podcasts. And to all our original viewers of Facebook and Instagram and YouTube, welcome to it. You know how we do every single weekday. You and I have an appointment at 7 p.m. where I'm always in conversation with property experts who help us navigate our property journey. Doesn't matter where we are on our property journey, whether we're looking to buy, to sell, to build, we are renting, we are renting. This certainly is the one-stop-shop on all things relating to property. And of course, talking about the one-stop-shop on property matters, you know that you can catch other great shows across private properties, social media pages. As it is on Wednesday, you can catch Esther Klassen on the first time home buy show later on, where she's always in conversation with people who have not only walked that first time home buying journey, but have gone continued to grow their portfolios from strength to strength. And every Tuesdays and Thursdays, you can catch them by doing what we've got on the farming podcast, tackling all things agriculture. And on Mondays and Fridays, Chad takes us through incredible properties that you can find on www.privateproperty.co.za. And of course, you can catch that every Mondays and Fridays at 8 p.m. And then, of course, there's myself, so I'm going to do my lo-allies on your screens at 7 p.m. And it's always so great to have you with us on the show. It's a Wednesday, it's the second Wednesday of the week. And I know the second Wednesday, we always have somebody from the Apsa-Hollandons team. This evening, we've got a double team, two members from the Apsa-Hollandons team. And we're going to be looking at the consumer insights on the home ownership index that, you know, the Apsa has. You know, we have this conversation every quarter. The person that we always have who's almost become like his piece, definitely part of the fan. He's here often enough, almost the Zim, who's the head of advanced analytics at the Apsa-Hollandons. And this evening, we're also joined by Unumusso Cuevo, who's a data science manager at Apsa-Hollandons. Muzi Unumusso Griming, and thank you so much for having us on the show, for joining us rather on the show. So one of the things that Unumusso did of A was comment that Unumusso and I are, you know, matching. So we've got a great color combination going on. And it wasn't planned. I love serendipitous moments like this. I don't think we've actually ever had it on the show before where a guest and I match like this. And I think orange is such a red color. Like it's not a common color, like black. You know, it's easy to match with black, but orange is such a unique color that it certainly is special. And I think one of the things is definitely looking forward to having Unumusso for the first time in the show. We're looking forward to having her on the show for future episodes when we tackle this particular topic. And before we look at some of the, you know, the insights from from quarter three Muzi, the question I would ask you every time I have a conversation is what is the Apsa home ownership, you know, index for people probably don't know what exactly is it and what does it measure? Thanks so much. The Apsa home owner sentiment index, it tries to measure exactly that. It tries to measure the sentiment, what makes it stand out, you know, from other main measures that we've seen in the leader state space is that we want to know what is happening in the hearts and minds of actual consumer every day people, me and you, not necessarily interviewing intermediaries or any other industry stakeholders. So we will contact a couple of respondents and we'll ask them a series of questions to try and get a dipstick of what they think and how they're feeling about the property industry. And where we found it useful, especially in the interesting rollercoaster we've been on over the past 18 months is that it's been able to give us a good sense of where everyone is, where the consumer is, and has been able to give us a very useful leading indicators for where we can expect the market to move in the coming quarters. And I mean, I think one of the great things and we always talk about it was that data is great, but data for the sake of data isn't particularly useful, right? We, there's certain things that you want to be able to do, especially with great rich data, and to use it to drive certain decisions. And I think this is one of the benefits, certainly I can see it from an organization perspective, but also then from a consumer perspective, when you're reading the report on a quarterly basis and want to get a sense of what the sentiment is from people who are already kind of in the property space, who are probably home owners or who are investors around certain things within the property space, and we'll get into that. And I think almost I want to bring it in. When we look at your Q4, Muze and I do this conversation every month, we're looking at every single quarter, but when we look at Q3 rather, you say, I'm already in Q4 mode, then Q3 did it pull the number on me? And Q4 is already moving so quickly. I think we're going to be ending the year in two weeks time. The way it's moving feels like we're going to have ended the year in the next two weeks. But Muze, I want to look at Q3 caps, if you can share with us about what some of the latest stacks with Q3 in the report are. Thanks, Amma. So what we're seeing is that the overall confidence together with all sub indices, they rebounded up to quarter one levels after the dips from quarter two. If you can remember, quarter two results were largely influenced by the acts of violence and destruction on property that we saw at the beginning of the early parts of July. But what we're seeing now is that sentiment is up five percentage points and it currently sits one percentage point ahead of quarter one. And in fact, this is the second highest sentiment that we've seen since the inception of the HSI report. And the main drivers that our respondents are citing, it's property's ability to create long-term value. They see it as a secure asset. And it's also the potential for it to really create long-term income. What we've also interestingly picked up is that sentiment towards selling, which has largely lagged pre-lockdown level, it has finally started to recover and we're seeing it now sitting close to the 2019 levels. And there's really two camps of respondents. So there are respondents that are seeing the opportunity to get a really good selling price currently in the market. And then there's another set of respondents who are potentially continuing to feel some financial strain, citing that if you can no longer afford a property, then you should probably rather sell. And if we compare this to some of the data that we're seeing coming through from the national regulator data that's showing that credit granted has actually increased 6% quarter in quarter, as well as the fact that we are unfortunately also seeing this decrease in the number of consumers in good standing, it really starts to paint a picture of a consumer group that is concerned around affordability. If we also look a little bit forward, this could spell some challenges once interest rates start to rise because expense and debt will also start to increase. And of course, this will mean that it's going to place consumers under additional pressure. I think I got excited to have you join this conversation with Muzie and I because we are on together. And I forgot to mention one thing to our viewers that I know they're already messaging us about and want to find out if we are doing it this evening. And that's, of course, the daily competition that we run. Of course, it is still happening. So do not worry. There is just my excitement having somebody new and somebody that I'm also matching with, right? I think that's never happened before. We are, of course, running that incredible competition on our Facebook page where you send a chance of walking away with 500 grand in cash every single evening. We'll be taking a break slightly later on in the show to get a sense of who might be the lucky winner of that 500 grand in cash. Remember, the only way you can walk away with the money is that you need to be watching us live and drop us a message down here below to claim your price. So that is me getting excited. The competition is still on. It's not going anywhere. We've got 500 grand in the money bag yesterday. We had Farhan Siddiqui claiming that 1500 grand. So we are going to be back at 500 grand and of course be able to win that cash. Now, Muzie, one of the really great things that you mentioned, and it's actually so much great, but it's heartening because we of course saw it a few weeks back, was when you mentioned how there was the sentiment, certainly, when we looked at Q2, the violence that we saw in that particular portrait certainly had an effect on the people's sentiment and certainly people who are in property. Perhaps share with us what have been the other social economic or even social political events that affected Q3 results, especially as you indicated that the sentiment overall went up in the second highest that we've had since the sentiment index was started. So positive sentiment was really just driven around the opportunities they are in getting with selling price currently. And then the negative sentiment really was the biggest driver for it with respect to the negative responses that we got. It was the lack of economic prosperity for both households and for the country. And there's still a measure of uncertainty that still exists when it comes to COVID-19. What we also found, however, is that there are a number of respondents that would really like to participate in home ownership, but are unable to. So respondents who do not own a property, they had the highest growth in buying sentiment quarter on quarter. But they also still continue to cite concerns around affordability, risk to income, and given just the current economic environment. And I think this talks a little bit to the challenges facing South Africa when it comes to unemployment, especially among of course this evening in conversation with the Apsa Home Loans team who is a data science manager as well as the head of advanced analytics. And we're looking at the consumer home, the home owner sentiment index, we're looking at the quarter three insights, and of course taking your questions and comments on our social media pages. We've got my question here saying that I always find these updates very insightful and helpful to yourself as a property investor. And I think one of the realities with being a property investor is you really want to get a good sense of different data sets that help and certainly inform how you make your investment decisions. Sometimes when you're buying for your primary residence, you don't need to consume as much of this data because you know you're just buying this one property during your family are going to live there. But the moment the decision is about investing in property and buying multiple properties and trying to figure out what kind of strategy you also want to have conversations like this certainly help in you making better decisions and just more strategic decisions on your property portfolio. Now Mozi, our resident home owner sentiment index guru, I want to bring you in. I think when we look at the sentiments towards buying and how it's essentially reached an all-time high earlier this year, perhaps when you look at what you've seen, especially given how the sentiment has recovered to pre-lockdown levels, perhaps you're with us that relationship because when I've looked at it as a property investor and always intrigued when I look at certainly the stock that we're constantly getting in the market, how long it's also just staying on the market. And as much as we're also keeping up with the registrations and the sales, they're not moving as quickly as the stock is coming on the market. So can you just show a little bit for us when it comes to that? Certainly, so for this one we're kind of going to go down memory lane a little bit. Sentiment in Q3 or sentiment towards buying property in Q3 is currently sitting at 81%. Now to remind everyone, we were sitting at an all-time high of 82% in Q1. We saw a reduction, as Noam Musso mentioned, given the acts of violence and destruction to property that we saw in Q2, essentially in Q3 sentiment towards buying property has pretty much recovered. And also earlier Noam Musso mentioned that sentiment towards selling has finally recovered to pre-lockdown levels. Now in our conversations since we went into lockdown, we saw most of our indicators recovering and even exceeding pre-lockdown levels, except sentiment towards selling property, which remains stubbornly low. What this means now with sentiment towards selling, it had remained flat in Q2 and we took a bit of a dip in terms of buying sentiment and that's where we saw the gap close. And many of our conversations in the last year were around this gap between buying and selling sentiment because more people were saying buy, buy, buy and fewer people were saying sell. So it kind of gave a gap between buying sentiment and selling sentiment and that then resulted in what we had predicted last year, which kind of started happening this year. We saw house prices go through a cycle of some healthy growth and our industry stakeholders, when we spoke to them, they were talking about stock levels that were starting to come down. The other thing that we saw happen last year when the market recovered was that we saw a lot of first-time buyers coming into the market and when a first-time buyer comes into the market, they typically, well, if they're first-time buyer by definition, they always come in, they take a property that's available for sale and they don't necessarily have a property that they can sell or put back on the shelf for someone else to buy. And that's one of the things that kind of drove down the stock levels as we saw last year. The other thing that happened with interest rates having come down, there were a lot of non-first-time buyers who either upgraded their property or wanted to purchase their first investment property because now this was affordable. This also resulted in somewhat of a decline in overall stock levels. What we saw this time with the recovery and selling sentiment, as Non-Muslim mentioned, the one thing was around affordability where respondents are starting to talk about affordability and potentially you're needing to think about selling your property if you can no longer afford it or even selling your property to enable you to upgrade to another property. And I think the difference here is the dynamic in the market where we are potentially going to go into a cycle where people are still buying properties, but now we're starting to see people release the properties that they currently own back into the market. That's kind of the implication of the recovery in sentiment towards selling. But the gap between sentiment towards buying and sentiment towards selling, sentiment towards selling has recovered to pre-lockdown levels, but buying sentiment is very close to all-time highs. So we're still seeing that relative gap where there's relatively more would-be buyers than would-be sellers. We're going to look at something that you've touched on and that's the interest rates. But I want us to take a quick break and get a sense of who this evening's winner of that 500 dryings in cash is. Remember if your name is the one that is picked out, you have to drop us a text down here below in order to claim your price. We'll be taking more of your questions and comments just after this. And the lucky winner of that 500 dryings in cash this evening goes to Tabiso Mufugeng. I hope you're watching us do drop us a message down here below. And of course we are going to make sure that you get that 500 dryings in cash. And in the event where Tabiso doesn't raise his hand, then you know the normal thing is going to happen. We're going to put that back in the money bag and it's going to be 1000 runs that will be up for grabs tomorrow evening. So Tabiso Mufugeng, you've got until the end of the show to get in touch with us and let us know that you are watching us alive in order to claim that price. And of course I'm still in conversation with Umu Zizem as well as Numboso Sibego, who are from Sibego, who are from the Apsa Home Loans team. I'm looking at the Home Owners Sentiment Index, looking at the Q3 results. We have this conversation every quarter because we understand the importance of getting data and having it dissected because sometimes sometimes you may not want to read the report. Although I can attest this report is actually a really great report. It's nice and easy, great graphics, it's great to understand. It's not one of those 300 page long reports that you struggle to read through. It's really easy, light, accessible reading. So I do urge you to actually read it every time we have this conversation because it really does give you good insight into some of the things that could help you make better property decisions. Before the break, you mentioned one of the things that you touched on was of course interest rates. One of the big things that we saw that in many ways the low interest rate carried us through the past couple of quarters. When you look at, and I know that you don't like talking about your old expectations, but certainly what are the expectations for the coming quarters, especially given that we know interest rates are going to go up. As much as there certainly was a school of thought that say bye, bye, bye, these are historically low interest rates. We might not see them again anytime soon. The reality is they were here because of the crisis we found ourselves in and not because we sort of gradually took them down. And we know that they're going to go up, and they're not going to go up in seven years time, right? I mean, we'd love that. Listen, if the Reserve Bank is listening, I think we would absolutely love to take that long for them to rise. But we know that's not going to be the case. So when we look at the fact that we know they're going to be rising, and they are one of the factors that have carried us through the past quarters, what are the predictions for the coming quarters given the imminent rise? Correct. So we think interest rates where they are, they have bottomed out. They're at the bottom. We don't think we're going to go nowhere. We think we're going to start going up. The one view that we have put forward, and it's a view that we've had for a while, is that we think interest rates will remain where they are for the rest of this year. And we'll see the first 25 basis point increase coming in March with another 50 basis point increases later on next year. So either one increase of 50 basis points or two increases of 25 basis points. I think one interesting thing or one important thing to highlight is we don't think interest rates will increase at the speed that they came down. So in three years' time, we don't believe that interest rates are going to be sitting where they were sitting in January last year. For example, we don't think the primary ending rate is going to be sitting at 10% in three years' time. We think it will still be slightly lower. But we do expect about a 75 basis point increase in the coming year. And what the big rate cuts did last year is we think they've prompted somewhat of a structural shift. As we mentioned, the supply and demand dynamic shift resulted in an increase in overall property prices. And this happened exceeding inflation. So house prices grew in real-time. And we think consumers are just used to where interest rates are sitting now. We also saw many consumers reaching for more expensive properties across the board. So first-time buyers couldn't afford they were able to now participate in the market. First-time buyers were going to buy any way we saw they afforded slightly more expensive properties. And we also saw non-first-time home owners or rather non-first-time buyers. Who were bringing forward the upgrade decisions. So those who had planned to upgrade this year could upgrade last year. Those who planned to upgrade next year could upgrade this year, etc. So we think as interest rates start to increase, it will bring down a bit of a slow down in terms of what we saw. And I need to use my words carefully. We are not expecting the market to slow down. We just expect to slow down in how quickly the market has been grown. So we think the market will continue to grow. We just don't think that the market is going to continue as quickly as what it's been running right now. So we still expect house prices to continue going up potentially starting to slow down. And I mean we don't expect the slow down in the growth rate to happen immediately. We expect that to start kind of happen gradually, eventually halfway through next year and even into the second half of the year. You know, Numusso, one of the things that Umusi is touched on is around people upgrading their homes. Then we've obviously seen I think the great thing about the lower interest rates is people who are living in let's say a 1.5 in property. We're like, well, now I can actually qualify for let's say a 1.8 and I want to go for it. But this concept of upgrading obviously doesn't always extend to having to buy a completely different property. But some people it can be as sort of small scale or as less drastic as doing renovations in your particular property where you now are in a space where you can do certain renovations in whether property you're living in or your other properties. What came out from the support when it comes to the sentiment around renovations? So renovation sentiment has actually been one of these interesting sentiments to track because largely there have been a lot of changes. But what we saw was an interesting new trend in quarter three of 2020 where we saw non-first time home owners that generally scored quite low renovations sentiment. We've seen them start to now score quite high either first or second. We believe a big part of this is potentially the adjustment in monthly household expenses, which has made renovation expenditure a lot more viable. So, you know, reduction in travel and number of holidays that people are taking, entertainment, all of that sort of funneling into renovations. So what we're also seeing is that respondents are citing the potential increase in value that can come out through these renovations. And they are also expecting that they're going to get higher returns when they sell. But there's also another dynamic that plays out because the upgrading decision, it's also a bit different for many non-first time home owners as a lot of them are living in what they believe will be there for forever home. So it's quite tricky to move a settled family away, you know, kids away from their friends, from school. So it's just a lot more admin that's involved in that as compared to first time home owners or non-home owners. And I think one of the things that's happened is that our winner this evening has, in fact, claimed their prize. So congratulations to Tabisso Mufuging, who's going to be walking away with that 500 rands in cash. Thank you very much. And so that is, of course, us still on 500 rands for tomorrow evening. So all you have to do, if you want to be just like Tabisso, make sure that you comment on the Pint post on our Facebook page, where we want to find out some of the nuggets that you have learned while watching the show. And of course, we want to reach that bold target of 20,000 comments. And if you are the lucky winner, then if you set a chance of walking away with that 500 rands in cash, then all you have to do is to be watching us live in order to claim that prize. Now, Mufuging, I want to come back to you. When we look then at the sentiment, what's the sentiment when you look at buying versus renting this porter? Because I think this is one of those areas that is just generally contentious. And I think now more than ever, it has also become quite contentious with a lot of people, I'll say general sentiment, being that, look, this is a great time to buy, why pay somebody else's bond. And I don't ascribe to you to that philosophy. But they're like, well, this is a great time. You're probably going to be paying the same amount of bond payment was going to be low. But when you look at the sentiment of buying versus renting, what does it look like for quarter three? So renters and investors, they continue to be made for each other. Renters scored the lowest in buying versus renting sentiment. So more of them still preferring to rent rather than to buy. And the biggest drivers that they are citing is around the fact that there's a lack of job security, and they're not able to to afford buying a property at the stage. And renting really solves both these. It gives them that relative flexibility that they need. I think one of the things I'm really glad when renters, I say, go the extra mile, but not buying too tight. They're being cut off right now. And the buyer property to cost is no interest rates. When, for the most part, I always say that no interest rates are known contender of the primary and enterprise of buying a property. The similar factors that we use to consider, there are certainly ways of taking advantage. That is the primary reason. And then you need to go back and probably assist and base in whether you can move forward with things, especially when that's wrong to it. You've got to take advantage of things that you can take advantage of for a year and then you can take advantage of things that you can take advantage of. You know, data is lacking, you can take advantage of what you have to take advantage of. It's not going to be the case. But then things are going to be taken advantage of. I love that we're still in a market where the ranges and the interest rates are exactly what we're talking about. That was a post-conflict of the show, but that the one thing I was asking you every single time you look here and you know that the show is not quite like it. But it's the last time that I will get to asking you this question. Is the market still looking healthy? I think we'll see our indicators on the acquisition side. So overall sentiment towards buying versus rating and sentiment towards investing. I think we'll see those remain buoyant or remain close to where they are. I do suspect that we'll start seeing sentiment towards selling continue to creep up as we as we've seen property owners enjoy the benefits of pricing increases. I do think that we'll hit a bit of pressure next year once we start seeing those interest rates go up. Maybe our indicators might come down slightly, but I think overall it'll be a positive story for the property market. Fortunately for us, the consumer has a long memory and I think what's kind of happened in the property space over the past year and a half has been positive and I think the consumer will carry that forward for the next while. What was the, I know that this is the last time that I'm speaking to you on this show, but I know that you and I are going to stay together. Thank you so much. It's always up to you to have your time with us and I know that it will be fun talks somewhere along the line. So thank you for what is going on in the show and really being able to break down what can be a very boring topic in such a necessity where you've got to always find an interesting piece of your course to use for the future. And I think we're certainly going to love having you on this or one of the best gift with Portrait as we tackle the as we always talk about, so we could read it to you. To both of you, thank you so much for joining us on this show. Thank you so much. Thank you. It was a pleasure. And directly from all of us who are going to be the finance manager and as well as the music. Wrapping up the Wednesday edition of the product conference with myself, because I'm working on tomorrow. And then actually, because you haven't with us on the show this evening, and we're back with this on this Wednesday, so you can have the first time from tomorrow, so this is the class and I think it's going to be so great.