The outcome of the ruling party’s election conference next month will determine whether the country’s property prices continue their slide, or slowly start to rise as the economy and investor confidence improve.
The past year has been challenging for the
country’s property market in the face of economic
and political instability, but no occurrence
this year will hold as much significance
for property than the outcome of the ANC’s national
elective conference next month.
the national and Joburg property markets – with sales
across the board for all agencies declining about 30%
year-on-year, according to Lew Geffen, chairman of Lew
Geffen Sotheby’s International Realty – property stakeholders
say the results of the party’s leadership election will
ultimately decide whether the local and national market continues
to stagnate or performs well.
national average of 4% this year, says Erwin Rode of Rode &
Associates. This price growth, he says, is to be expected considering
that the Witwatersrand constitutes such a large proportion
of the national housing stock.
national level this year,and the resulting international ratings
downgrades, have “shaken investor confidence to the core and
the market is clearly taking a ‘wait and see’ approach to the
How the market performs in 2018 will largely depend on the outcome of that conference.
downward trajectory continue, while substantial changes to
a leadership untarnished by recent scandals will see a rise in
investor confidence across the board, and the property industry
will show tandem recovery.”
Steve van Wyk, Seeff Properties’ managing director in
to stagnate or do extremely well, depending heavily on
who is elected as head of the ANC next month.
could perform very well because this will have a major impact
on market sentiment and business in general. In turn this will
lead to more investment by private companies and the economy
will benefit and should grow.”
market next year, agrees Absa home loans property analyst
Jacques du Toit. He recently shared his forecast at a Seeff
regional meeting in Pretoria.
rations edging lower.
and slightly higher growth is expected in 2018, the property
market will continue to be affected by consumer finances,
confidence levels and economic trends likely to be driven by
political developments in the coming year.
remain a key property
supported by inflation
remaining within the 3%
to 6% target range and some
improvement in consumer
finances, he says.
in Randburg, cautiously predicts a
much improved year for the area compared
to 2017’s “chill of activity”. Barring further political
upheavals or environmental issues sufficient
to have an impact on the economy, he says increasing
consumer confidence and “small victories” in the economy
will continue to entice “skittish” buyers and sellers out of the
economic hibernation they’ve been in.
properties priced above R2 million, is what is ailing the most
currently, and what we should see rebounding with the most
South Africans shake themselves off and realise, as they always
do after events like the downgrade and political tensions, that
life goes on and there is a lot of opportunity waiting to be taken
Still, the key is the political situation, says Charles Vining,
Seeff’s managing director in Sandton.
situation. We expect after the ANC conference there will
be a renewed confidence in South Africa’s economic forecast.
Property is a medium to long-term investment so the economic
and political landscape has a direct impact on buyers and sellers
troughs, and while the market is currently flat, it is expected to
bounce back steadily in 2018.
“It may be an incremental increase in buyer confidence, but we predict it
will improve with
each passing month.
will track the national growth rate,
which is predicted to be about 4%, below
expected consumer price inflation. But
the unknown is to what degree emigration
and semigration will rise and
dampen prices, especially for upmarket
desired outcomes, the Joburg market
will most likely be hardest hit at the top
end by emigration, says Geffen.
“But we’re hoping for the best.
Unless we see significant changes at the
December conference, I believe it will
turn into a veritable avalanche that will
affect all sectors of the economy; not just
property,” he says.