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FNB Commercial Property Finance Property Insights
South Africa - FNB
Residential Rental tenant performance deterioration – how low can it go?
How long can it last?
Basing our expectations on the 2008/9 recession impact, we expect a very significant deterioration in residential rental tenant payment performance for this year, with a recession more severe than that of 2008/9 expected in 2020. While the tenant performance deterioration in response to an economic shock can be swift, the full recovery process thereafter can take a lot longer. We also anticipate some average rental through 2020 and 2021.

FNB forecasts a -4.5% GDP contraction, while certain other forecasters are more pessimistic. There appears to be a good link between economic performance and residential tenant payment performance, as one would expect, given the economy’s influence on employment and income.

So, taking the 2008/9 recession period as a benchmark for starters, and using TPN tenant performance data, we observed that a sharp dip in the percentage of tenants “in good standing” with their landlords coincided with that recession early in 2009. From around 85% early in 2008, the percentage of tenants in good standing dropped sharply to 71% by the 1st quarter of 2009, while the percentage that paid on time dropped from 70% early in 2008 to 54% by the end of 2008.

Conveyancing In A Digitalised World
UK - Todays Conveyancer
The CLC may have challenged the industry to make conveyancing a fully electronic process by 2030, but COVID-19 has become the catalyst for digitalisation that no one could have ever predicted. Just based on the last few weeks alone, there can be no doubt that a digital approach to conveyancing – and indeed for almost everything else – is the future.

This said, change has been already been rife in the conveyancing sector over the last decade. A fair amount of consolidation has taken place, reducing the number of conveyancers to just over 3000 in the UK.

Customer driven change
Arguably the biggest catalyst for change prior to Covid-19 was the increasing expectation of the consumer. In an on-demand society we are now used to doing pretty much anything we need to online, when we want to. The thought of receiving a vast reem of documents through the post, filling them in, sending them back and then booking a face to face meeting with a lawyer to sign paperwork, for many consumers feels like a step back in time. They are demanding interactive online engagement, fewer staged touchpoints, more efficiency from the process, different and even more current forms of communication, and overall a smoother journey as they navigate a process that for most customers, is a stressful one.
Todays Conveyancer

An open letter from the Managing Director of the Rawson Property Group
South Africa - Rawson
Dear Mr President As MD of the Rawson Property Group and an active member of South Africa’s community of real estate professionals, I would like to applaud your decisive action to date in response to the coronavirus pandemic. Ours is a service industry that revolves around people, this is true, but our industry has the ability to operate and deliver a lot of its services remotely.

The health and safety of those people is of paramount importance to us. As we enter week seven of a lockdown originally intended to last for 21 days, however, I must add my voice to those asking you to consider more than just your citizens’ physical health. When it comes to human necessities, we have a number of primal needs. Maslow’s famous hierarchy lists the most essential as air, water, food, sleep, clothing, reproduction, and shelter. Shelter. The very thing around which the real estate industry revolves. By keeping real estate services on lockdown, you have – albeit unintentionally – restricted your citizens’ ability to service their most basic of needs.

The South African property market meets the needs of many South African households and businesses. From a residential perspective, it not only provides shelter for families but also provides a place from which economic activity is derived.

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