New political dispensation in South Africa augers well for property
Category News
New political dispensation in South Africa augers well for property.
During the nine years that Jacob Zuma was President of South Africa the residential property sector, although often able to plough its own furrow irrespective of how the economy performed, did suffer in much the same way as other South African businesses. It could, says Rowan Alexander, Director of Alexander Swart Property, have performed far better had the economy itself been more buoyant.
“While it is true that property was throughout the Zuma era one of the better performers on the JSE Securities Exchange,” says Alexander, “it is nevertheless undeniable that under the Zuma period, which, let us remember, followed directly on the 2008 global financial crash, property was prevented from achieving anything like the recovery we had anticipated. Now, however, there are sound reasons to believe that the worst is over and a slow but steady improvement in all South African residential property, but particularly that in the Cape, is likely.”
The fact that the new government is thought to be corruption free and business friendly, says Alexander, is already beginning to boost confidence and encourage investment. The rand/dollar exchange rate recently at R14.16 to the dollar has improved to around R11.65 and will probably improve further.
The more optimistic outlook in South Africa now, Alexander predicts, will generate increased activity in the property sector. Many people who were holding back on selling and/or upgrading will now feel that there is sufficient political stability for them to take the plunge and many hesitant young people will now covert from letting to buying. The new confidence is also, says Alexander, likely to lead to more developments to come online despite the water shortages.
Does that mean that house prices will rise? Probably not in the near future, says Alexander.
“At Alexander Swart Property our figures indicate that the Cape residential market is already fairly priced in relation to demand and bargain buys are now very seldom available. However in 12 to 18 months price growth will, I predict, be seen again.”
Alexander warns that the ‘euphoria’ now being felt by many business people and potential home owners will in the next few months give way to a more realistic outlook.
“Very serious challenges now face the Ramaphosa team and no matter how ethical and enlightened their approach will be they will have to deal with a huge backlog of malpractice and inefficiency – and we have to accept that implementing the very necessary changes will take considerable time, in some cases years.
“Nevertheless, in view of what we believe will inevitably be an upturn this is a good time to buy. By the end of this year we will be in a rising market. Right now, therefore, is when people should be buying.”
For further information contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.
Author: Independent Author
