Property Report – Tim Johnson

As South African’s we are used to hearing the idiom, ‘Never a dull day in Africa’.

Although our country has its challenges, the rest of the world is not immune either.

We have witnessed first-hand the impact that politics, protests, droughts and other internal factors can have on our economy, exchange rate and property markets, but it would be foolish to think that we are the only ones dealing with these issues.

On June 24, shock waves were sent throughout the global financial markets with the announcement that the British people had voted to leave the European Union. The ‘Brexit’ vote resulted in the Pound plummeting to its lowest rate since 1985 and the resignation of its Prime Minister, David Cameron.

The International Monetary Fund issued a downbeat assessment, warning that Brexit could deal the British economy a “negative and substantial” blow, possibly sinking it back into a recession.

I suspect an abnormally high number of cups of tea have been consumed throughout UK households as they nervously wait to see what impact this will have on their economy, job market, trade arrangements and even travel plans.

There is no doubt that South Africa is likely to feel the impact of this decision: finance minister Pravin Gordhan said the UK pulling out of the EU would “complicate life” for South Africa.

“It may not immediately impact negatively, especially on trade, but the uncertainty could have a serious impact on us as a country,” the Sunday Tribune quoted him as saying in Durban recently.

South Africa cannot really afford a further decline in the Rand/Dollar value and coupled with the threats of rating agency downgrades towards the end of the year, a new era of currency volatility not related to our domestic political economy is obviously a concern.

It is easy to get caught up in doom and gloom, but these kinds of stories have played out throughout the world for many decades. It is encouraging to see how well our local property market has stood up to these factors.

Year on year, our Dolphin Coast office is trading at a 17 per cent growth, and coupled with the historical trend of investors hanging back as we lead up to elections, the growth certainly bucks the national trend.

Billions are being invested in local infrastructure and developments and coupled with our sought after lifestyle, we expect the local property market to remain buoyant.

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