1. THE CURRENT STATE OF THE PROPERTY & FINANCIAL CRISIS in RSA and H HH HOW IT AFFECTS YOU Please Buckle Up!

2. Purpose of this Presentation That You Could Make an Informed Decision of HOW TO APPROACH THE FUTURE!  Please Note This is not financial advice or counselling

3. What happened over the last few years Boom started in 2001 Reached peak in 2007 Downward spiral October 2008 – Lehmann Brothers Start of the Worldwide Banking Crises

4. Reality Check: Property Values o2008: Turnover R700 Billion  Number of Transfers ± 500 000 o2009: Turnover ± R100 Billion  Number of Transfers ± 150 000 oValues for 2010: ± R100 Billion  Number of Transfers ± 130 000 oProjected for 2011: ± R90 Billion  Number of Transfers ± 114 000 Source SAPTG

5. oFull Title Transfer Values: Source SAPTG  ± 34% Down from 2008 to 2010 Value  ± 39% Down - Sectional Title Value in the same period  ± 65% Down - of the Value of Vacant land over the same period  Projected Average Decline for 2011 over 2010: ± 13%  Average value of Property has declined by ± 50% from the peak of 2007 ½ 2007 2011 Reality Check: Property Industry

6. oThe Values of Property will continue to drop during 2012  Non-performing loans still growing  Projected “P I P” for Banks could be astronomically high:  FNB currently alone has more than 90 000 non performing homeloans with less than 10% Market Share  New developments, construction has basically ceased  Only 21 out of 100 Building Contractors are positive Source FNB Reality Check: Property Industry

7. oNumber of agents operating in South Africa  2007: ± 92 000 active agents  2011: ± 15 000 agents renewed their fidelity fund certificates  Personal income of agents has dropped by ± 70% or more since 2007 Reality Check – Property Industry

8. The market turnover value has declined in rand terms by 86% since 2007 To regain the previous peak it has to rise by more than 600% Reality Check – Property Industry

9. LOW HIGH MEDUIM HISTORY 2002 2003 2004 2005 2007 2008 2009 2010 2012 2014 2017 2019 2021 2023 Current Sellers Expectations of the market’s future 2011 The Real Estate Market Cycle

10. EXCESSIVE OPTIMISM Over Bought Over Bought NEGATIVE NEWS POSITIVE NEWS Credit and Cash Dry Up Bulging Inventories Production Slows Prices Slip A Little Worry Buying Dries Up More Lose Confidence Layoffs Begin More Worry Savings Build Put Off Buying Excessive Fear Panic Some Buying Smart Money Buys/Invests Bargain Basement = Some Buying WE ARE HERE EXCESSIVE PESSIMISM Recovery?

11. Recovery has Started only in the minds of the Sellers o Sluggish o Volatile o Will only see a stable market in 2014 / 2015 Interest Rates Still further down 0,5% - 1% in 2011 / 2012 – Remain low for longer – International events will have a ongoing impact during 2012 / 2014

14. 2012 2017 2009 2020 2008 2025 ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↑ ↑ ↑ ↑ Another… -5 % -10 % -15 % -20 % -25% -30 % + ??? The longer you wait to sell your property the more its going to decrease and no one knows when the market will start turning again. Current Falling Market →→→ →

17. oEngineering Firm – 3 Partner  Each drawing a salary of R68 000 per month  Medical Aid paid by company  Currency Debtors book of R500 000 (One debtor owes R125 000 – application for liquidation) has lodged by outside party  R250 000 Overdraft  Bank has requested reduction of R20 000 per month as from next month  All parties signed surety for overdraft of R250 000  Decision has been made to restructure the company and reduce expenses to meet obligations CASE STUDY: Background of Johan Visagie’s Company

18. Case Study: Balance Sheet

19. Case Study

20. Case Study: Real Value – Balance Sheet (Revised after Valuations)

21. Case Study After Restructuring

22. How does Johan Visagie’s Real Financial Position Look? Reality Check 1.Assets R2 557 000.00 2.Liabilities- R3 047 000 + R250 000 = R3 297 000 3.Equity= (-R740 000) >>Monthly Shortfall after Restructuring = R14 332.00

23. The Real Problem People are in denial of their real financial position and/or Value of their Property/Balance Sheets Most people want to ”Trade Out” their ”Negative Equity” with declining cash flows To The Buyers of assets - - Value only gets determined by - Willing Buyers/Willing Sellers

24. My name is Debt! and I create addiction and addiction and fear! fear!

25. The Real Question DELEVERAGE? orDEFAULT?

26. Symptoms of Financial Stress oDo not open Bank account statements oFamily issues and bad relationship with your wife / children / business partners oThinking of divorce oChange your telephone numbers oShort Tempered

27. Symptoms of Financial Stress oDo not answer “Private Calls” oIncreased alcohol consumption oDo not want to go home oFeel depressed and “No Worth” oPersonal Relationships “break down”

28. Questions oCan you still service your Debt and other Commitments? Yes/No oDo your Liabilities Exceed your assets? Yes/No oHave you identified with any of the symptoms of financial stress? If YES; You Need URGENT Help!

29. Expert Help is Available to Assist and Guide you To understand the consequences of your decisions / stress Assist you to accept the consequences Help you to deal with the emotional and psychological effects of these consequences Lead you out of bondage and to salvation

30. The Following Behaviours are NOT a Solution or Option: Denial is not an option! Suicide is not an option! Hiding is not an option! Hoping it will disappear is not an option! Thinking you can do it on your own is not an option! NOT Telling your wife is not an option! Using Trust money or SARS money is not an option!

31. FINAL QUESTION? Who made the decisions that resulted in being in the position where you are today?

32. GOOD NEWS !! There are Christian Businessmen that will assist you to get through this Process AND There is a N NN New Better Life Out There!

33. Just Ask for Help: You are NOT ALONE! YOU have to make a Choice!

34. THANK YOU! QUESTIONS?