The Ramaphosa effect in real estate
While financial markets showed improvement and the economic growth outlook leaned toward greater positivity in the weeks after President Cyril Ramaphosa took office, there’s been much speculation on what long-term effect his presidency will have on the South African property market. We provide some stats and discuss how the real estate sector has performed so far.
After Cyril Ramaphosa inherited office as the new President of South Africa until the next general elections, there is no doubt his priorities have shaken things not just for foreign investment, but the local real estate market as well. The new commander-in-chief has already made some sweeping changes; following his promise to rekindle economic growth and tackle corruption in the private and public sectors, the rand headed for a stronger direction, interest rates went down, inflation took a stronger footing, and ratings agency Moody’s upgraded the outlook of the country’s sovereign debt to stable.
With that much positive momentum, is it safe to say that Ramaphosa also real estate’s saviour? His rise to power resulted in a national catharsis dubbed ‘Ramaphoria’ as many people anticipated the change that will reignite the struggling South African economy. Business and consumer confidence looked up, which resulted in greater participation in the market. Banks were more willing to grant homes at the time and made it easier for buyers to get onto the property ladder. Property for sale also got a boost, spending less time on the market in the first quarter of 2018.
Very few presidents came into office during an extremely challenging economic crisis, as the one that Ramaphosa had to face this year; nevertheless, his impact on the property market since were undoubtedly successful. But, how likely is this Ramaphoria to last? Experts predict that house prices could remain stable in 2018, with growth nationally of around 4%, and that the property market will continue to recover from the financial crisis but still has a long way to go.
