How the real estate market performed under Ramaphosa
President Cyril Ramaphosa inherited an economy that was on the verge of another downgrade, but in just a few months, he managed to turn that around. So far, the economy has been living up to Ramaphosa’s promises, but how has it affected the real estate market?
How the real estate market performed under Ramaphosa
Are we at the beginning of an upturn in the South African real estate market, prompted by optimism following the rise of Cyril Ramaphosa to the presidential office? If so, how confident should property buyers and sellers be?
There’s no question that President Cyril Ramaphosa has had a huge impact on the economy. In anticipation of his ambitious investment drive and promise of economic reform, the rand firmed against major global currencies, we were spared a further downgrade by Moody’s, the Reserve Bank pushed interest rates lower, and inflation stabilised. The knock-on effect in terms of real estate here should be positive, but also challenging given the rise of new challenges such as Land Expropriation Without Compensation, the VAT increase and continued fuel price hikes.
There was greater activity in the market in the first quarter of 2018, after a 3-quarter decline. Banks were willing to lend more, with the average approved bond size in SA peaking at 6,05%, the highest in 12 months. Properties for sale spent less time on the market in the 1st quarter of 2018, declining from the previous quarter’s 17 weeks and 2 days to 14 weeks and 1 day.
The South African property sector has come through one of the most difficult periods over the past few years and has bounced back confidently so no doubt the market is ready for unexpected challenges. The economic situation in the country is improving – experts forecast house prices to remain stable, with growth nationally of around 4% – but recovery is still fragile and could depend on greater economic and political stability.
