It goes without saying that 2018 was a tumultuous year and the property market was not immune to its fluctuations. As is always the case, the country’s political situation greatly impacted the industry, most notably the land expropriation act and all that surrounded it. But we also faced a technical recession and historic water shortages. The question now is what can we expect for 2019? Is there cause for optimism or will the dire circumstances persist?
“This year has seen the market contend with political instability, rising inflation, recession and record-high fuel prices. Despite all the challenges, the real estate sector has remained more buoyant than many expected. While there has been visible tightening at the higher end of the market, the middle and lower markets have been very resilient and have not been as dramatically affected as the industry expected,” said Mike Greeff, CEO of Greeff Christie’s International Real Estate. He continued, “foreign investor confidence is also gradually on the rise due to Moody’s rating the country as stable. The Cape water crisis, which dampened the market, has been averted and the Reserve Bank has kept repo rates stable for the time being, despite calls for an interest rate increase.”
In a recent interview with Nompu Siziba of Moneyweb, Andrew Golding echoed his sentiments, “It’s clearly been a tough year. I think after the initial euphoria following President Ramaphosa’s appointment, there has been a sense that the market has quietened down off the back of the economic and political environment we find ourselves in, And, with a view to next year’s election, we are certainly seeing a slowdown of the market pretty much across the board. But, all things considered, the property market has been very resilient for a number of years and our expectation is it will continue to be so until the next upturn comes.”
However, there are some that remain somewhat pessimistic, like Renprop MD Chris Renecle who commented that he is not convinced that the worst is over. He added that “the market is currently skittish, with many adopting a wait-and-see attitude, and this is likely to continue for some months. For the South African property market to show any kind of improvement and growth in 2019, it requires policy certainty, especially around the land appropriation issue, as well as investment and an economic boost. Therefore, there is no expectation of a major recovery in any market sector in the year ahead. Therefore, over the next 12 months, the South African property market is expected to perform much has it has during 2018.”
Although it is still too early to predict anything with certainty, with much of 2019’s success or failure depending on the upcoming general election, and many experts are preaching patience. “[It’s] needed as we wait for sentiment to improve to such an extent where we can once again look forward to some meaningful economic and property market growth. Looking to 2019, we expect to start the year on much the same foot and will need to be patient for a little while longer as the market is likely to remain fairly flat for the first few months for a number of reasons.”
Whatever 2019 might hold for the property market, there’s one thing you can rely on; Berman Brothers. We will continue to seek out the very best in property for you, whether that be selling, buying, or renting.