When concerned about daily national issues, it can be helpful to look at the global big picture.

That was the advice of a panel of property experts and economic expert Jeremy Gardiner at an event hosted by spry. Financial Planning last week.

The panel of Devin Shutte (Robert Group), Kevin Swart (Cenprop), Pat Lambie (Collins Residential) and Travis Hawkins (spry.) addressed an audience of around 100 at Linc campus last Wednesday before Gardiner took to the stage for his talk.

Property as an Asset Class was the panel topic, while Gardiner’s speech took a wider look at South Africa in an international economic context.

Panelists acknowledged the difficulties facing property investors, including high interest rates and high construction costs, but said they remained confident in the North Coast as a property investment destination.

“We tend to look at these things in too much detail, it’s recency bias [favouring recent events over historic ones],” said Hawkins.

“What history shows us is that things will continue and that the market is cyclical. There is never going to be the perfect time to invest.”

He spoke of the residential growth he had seen on the North Coast in his lifetime, while referencing stronger industrial growth more recently.

“As the primary residential market has moved out here, so too has the commercial property market,” said Swart, whose company Cenprop is behind the North Point development between Shaka’s Head and Umhlali.

“We have seen local and international investment coming in. These are people who see the underlying growth potential and bigger picture aspect.”

Tourism is a big part of the area’s future too, both in terms of raising its profile globally and for direct investment and job creation.

“If Ballito is not on the global map now, it certainly will be in the next 20, 30 years,” said Lambie.

“Projects like Club Med and the Ernie Els signature course at Zimbali Lakes are drawing increased attention.”

Gardiner, who works for Ninety-One, an asset management company based in Cape Town, said he felt much the same about KwaZulu-Natal’s potential.

“Part of the challenge is to convince people who have been through difficulty (referencing riots, Covid-19, floods and so on) just how golden the area they are sitting on is,” said Gardiner.
“A wider KZN picture includes the Wild Coast, Drakensberg and North Coast, as well as game reserve access. KZN is a gem.”

He went on to place South Africa in among the world’s economy, showing how America’s fastest interest rates increase in 50 years led to our own.

“After Covid-19, America were unable to lower the rates again because of high oil costs as a result of the Russia/Ukraine war,” he said.

“Their economy has been able to remain strong but other countries have had more difficulty managing the rates hikes.”

He said he expected interest rates to start coming down from September.

Gardiner spoke of 2024 as the global year of elections, where more than half the world’s population will hit the polls, including South Africa.

He acknowledged a range of outcomes after May 29, but said he was quietly confident in State Owned Enterprises improving regardless.

“It took a crisis for it to happen, but private input has been allowed in SOEs and they are becoming more stable,” he said.

“Electricity, logistics and crime should all see improvement following the increased efforts of the CEO Initiative.”

The CEO Initiative is a pledge signed by 115 of South Africa’s top business leaders to use their combined skills to help improve the country.

Gardiner said he thought Transnet would improve under new leadership, while the country’s electricity crisis is being offset by an increase in renewables.

Altogether, while the picture may not be rosy, there is cause for positive sentiment if you know where to look.

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