Economy and business

Trends:

• Our core inflation is holding steady with little sign of a reduction in interest rates following shortly. The US inflation rate is trending downwards, which had a dramatic effect on our JSE and inbound investment. RMB says that high-yield lenders are returning to sub- Saharan Africa on the back of pent-up demand.
• Our exchange rate, likewise, has changed for the better, presumably on the back of a weaker dollar.
• So, where are we heading economically? One can’t really say, but my perception is that the underlying issues, that had hamstrung our economy in the past, is in the process of being addressed and that there is a glimmer of hope that interest rates will be brought down (by September?)– unless the SARB changes its stance on interest rate targeting.
• Our retail sector’s muted performance will have a negative effect on our GDP. Our core problem is that our potential GDP growth remains below 1%, even though our economy might be looking up: https://codera.co.za/updated-output-gap-and-potential-growth-estimates-for-sa/
• A note was put out on News24 on what was politely termed Township Economy: the fact is that there is a burgeoning population which requires services and goods, the turnover of which is not readily measurable, as most of the transactions in such areas are for cash. See my letter above.

 

Interesting individual news snippets are:

• UCT has again been rated the best university South Africa.
• I attended an RMB presentation on, amongst other things, investing overseas. One factor, which we tend to overlook in our rush to invest overseas, in order to buttress our investments against the vagaries of our local market is that superficially, such a move looks attractive, as one tends to see better economic growth and so on in those markets. The difficulty with overseas shares is that they are quite expensive for what you earn in income. Essentially you are paying for security rather than return.
• Would you willingly work for the State? This is the dilemma faced by South African doctors if the NHI is fully implemented. As it is, we are not particularly well endowed when it comes to medical practitioners, and an erosion of their numbers may have quite dire results for our population. This may be seen from the following graph:
  

Incidentally, the Prez says that rich people do not want medical equality in South Africa – BS. I believe that the resistance to the NHI stems primarily from the perception that those who pay for medical services (for themselves and who will pay for others) will receive substantially less in terms of service, than they currently do.

• An interesting note deals with the some 11 million prepaid electricity meters installed in South Africa which, if not updated by 24 November will not accept new voucher tokens. It appears that the update rate is such that the process will not be completed by that date.
• I have, in the past, drawn attention to the massive financial assistance received by our motor vehicle industry, in terms of preferential tax treatment. Statistics imply that the per person job value, received from the State by the motor vehicle industry is some R360k per job! Not too shabby.
• Rough Guides has listed South Africa as one of the world’s most beautiful countries to visit.
• Capitec is a continuing success story – a report holds that it now has as many clients as Standard Bank, ABSA and Discovery Bank
• The ANC has committed to a BIG strategy to be implemented within two years. The language used is wonderfully euphemistic, i.e. saying that this will be funded by ‘new progressive tax measures’ (those who earn will pay more?). Objectively, given that some 39% of South African households benefit from social grants, this is 25% of households do not have enough food, and 23% of households have as main income such grants, such a system is necessary to provide for healthcare for our entire population.
• For ever? A new technique to synthesise diamonds at normal atmospheric pressures has been discovered which allows one to grow a diamond in 15 minutes. This could have a substantial impact on the value of diamonds.
• On a lighter note: Belgium has legislated that the government can intervene in cases where prostitutes refuse sexual acts frequently i.e. refusing to get down more than 10 times in 6 months!

 

Property

 

Trends:

• It is not news that interest rates will not come down until, at best, September. This will keep our property market depressed at least until then.
• Interestingly there appears to be hope on the horizon: the Burstone Group says that our office property market has put the worst behind it in that employees are returning to offices, and employers are using office space more creatively to encourage workers to return to offices.
• My generation bought property, as that property increased in value with time (no I’m not saying that it increased beyond the inflation rate – but still). The (US) Baby Boomer generation prefers the flexibility of renting a home versus buying it, and investment wise, there is little to criticise in such choice.
• The capitalisation rate of property may be defined as a value obtained by dividing the property’s net operating income by its current market value. This gives an estimation of an investor’s potential return on such an investment. SAPOA says that our All-Property capitalisation rate stands at some 8.3%. Compared to investing in shares, there is not much in the choice, save that one saves on capital expenditure when not buying.
• Residential rentals: the following graph is drawn from BUSA and speaks for itself:
  

 

Bodies corporate take decisions which may be unfair and, in this case, banned an estate agent from subletting units in the scheme. The SCA had to adjudge on this, and I shall leave you to make your own conclusions from the article that follows: https://perjournal.co.za/article/view/15594/20623

 

On the same topic, bodies corporate need to be consistent on their decisions to allow deviations from body corporate rules (the case at hand dealt with a decision by an adjudicator but, the principle holds): https://www.saflii.org/za/cases/ZAGPJHC/2024/468.html Ex West

 

Estate agents, be careful how you word your commission clauses: https://www.saflii.org/za/cases/ZAWCHC/2024/30.html Ex STBB

 

I was privileged to attend a session on land reform in Franschhoek this weekend past. In a nutshell, the State appears to think that its restitution efforts are well founded and effective. The academic representative (okay, a resoundingly liberal lady) and a news writer whose family had been the victim of land expropriation, did not agree and I understand why: it is virtually impossible to recreate the circumstances which prevailed 50 years ago and to place persons in both erven and farms in a similar position that they were then. We tend to focus on farm restitution but there is much more to this as may be seen from the District 6 restitution. Making matters worse, is that our land use management systems are subject to both Spluma and traditional leadership/traditional councils. A generalist article on the topic may be found at https://perjournal.co.za/article/view/16564/20646

 

Practice

 

News:

• Who does not take umbrage to the blue-light brigade? The Johannesburg mayor enjoys the services of 10 (8?) bodyguards and a fleet of luxury vehicles. This issue has gone to court on the back of accusations of abusing the city resources. Fun – amazing what our courts are asked to adjudge upon.
• Can you refuse to employ someone who has a criminal background? This matter was brought to court by an applicant who had previous convictions for theft. Does the expungement of such records equal a clear criminal history? Perhaps, but the circumstances of the employment determines whether the potential employee is a theft risk: https://www.saflii.org/za/cases/ZALCPE/2024/11.html
• An employer who fails to adequately investigate sexual harassment complaints, fails in his duty to eliminate the alleged conduct: https://www.werksmans.com/legal-updates-and-opinions/employer-ordered-to-pay-compensation-for-failing-to-adequately-investigate-sexual-harassment-complaints/
• On the same topic is another note, also by Werksmans, where a provisional appointment of an employee was terminated owing to his failure to disclose criminal convictions: https://www.werksmans.com/legal-updates-and-opinions/navigating-the-termination-of-conditional-offers-of-employment-what-employers-need-to-know/
• Euthanasia is a topic which I believe needs to be further explored, as our current take on physician-administered euthanasia is overly restrictive: https://perjournal.co.za/article/view/14300/20862
• Yes, you can inherit from a permanent intestate life partner if not married: https://cilreyn.co.za/2024/04/29/can-you-inherit-from-someone-you-have-merely-been-living-with/
• Forty percent of divorces are attributable to financial constraints.
• There has been much talk of remote commissioning of affidavits. This case torpedoes this: https://www.saflii.org/za/cases/ZAGPPHC/2024/446.html; see also : https://www.saflii.org/za/cases/ZAGPJHC/2024/459.html

West also reported on a Pretoria High Court judgement in which LEXIS-NEXIS applied for an interpretation of the regulations, governing the administering of an oath, to be broadly interpreted, so as to allow for electronic audio/visual attestation. This case was not available on Saflii at the time of writing, suffice to say that the court declined the application. The fact is that our legislation has not kept up with digital advances.

• It is all but certain that Justice Mandisa Maya will be our next Chief Justice.

 

Conveyancing

• Long a necessity in conveyancing practice, the Practitioners Guide to Conveyancing by West is now available in its third edition.
• This issue has been debated before but it bears reiteration, i.e. that a sale of land needs to be attended to in wet ink: https://www.dupwest.co.za/OurInsights/ArticleDetail.aspx?Title=To-click-or-to-ink?-Are-electronically-signed-sale-of-property-agreements-valid-in-SA?
• I used to keep stats on the income of attorneys and was rather surprised when I chanced across a website which set the average attorney conveyancer salary at R25k. I checked elsewhere and found an even lower figure! Average? Hell’s teeth, you would be hard put to find even a beginner conveyancer who would work at that rate.
• Another quite interesting statement came across my desk and that is that, out of some 775 (I have not checked this, but it would appear to be more or less in the mark) wannabe conveyancers, who wrote the exam in the Western Cape and only 2 qualified. The results of this year’s first conveyancing exam were published by the LPC and, looking at this, the results are seriously depressing: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://lpc.org.za/wp-content/uploads/2024/05/Conveyancing-Exam-Results-National.pdf
• The following poster appeared in our Deeds Office: perhaps we should run a competition and see who amongst us believe that this will actually transpire?
  

 

Comment

 

For free? I was quite amused when I chanced across a report by The Citizen on riots in Gomorrah, an informal settlement in Pretoria. The municipality had cut illegal power connections, prompting a riot. So, I wonder: which preacher named that town?

 

Lighten up

 

Male mosquito to wife: Darling I will hunt a lion for you.

Wife mosquito: Okay fine, now go to sleep.

Male mosquito: I will bite an elephant and bring his blood to you.

Wife mosquito: Sure love, go to sleep.

Male mosquito: I will drive you around Paris in a Mercedes.

Wife mosquito: Hmmm… Okay, go to sleep.

Male mosquito: You don’t trust me? I’ll get you a 100gm gold chain.

Wife mosquito: You idiot, go to sleep!

Male mosquito: Honey, I’ll do anything for you.

Wife mosquito: You silly clown! How many times have I told you not to come home   after biting a politician?

 

Electile dysfunction: the inability to be aroused by any of the parties standing for election:

Apologies to The Idler, Witness.

 

 

Written by: Daan Steenkamp
https://www.daansteenkampattorneys.co.za/ 

 

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Still looking for your dream home, or wanting to sell? Feel free to give one of our developers a call today.

 

Tom Eastwick – The Gates, Hilton and Garlington, Hilton | 072 297 2699 | tom@devdirect.co.za
Janet Channing – Waterford Residential Estate, Howick | 082 570 5834 | janet@devdirect.co.za

 

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