South African property market poised for upswing

The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market. This is according to Chris Renecle, MD of Renprop, who says that because our new President, Cyril Ramaphosa, understands business and the importance of stimulating the economy, it is expected that positive growth will be evident across various business sectors including the property market over the next 18 – 24 months.

This was evident in the 2018 Budget Speech, delivered by Finance Minister Malusi Gigaba on Wednesday, where he noted “We are convinced that as business and consumer confidence return, and as government follows through on its commitments to enable growth with prudent, fast and decisive action, we can exceed our growth projections.”

Minister Gigaba pointed out that 2017 was “characterised by slow economic growth, recession, ratings downgrades, and heightened concerns regarding the governance and sustainability of key state-owned companies” but said that in the face of these challenges, the country’s economic growth outlook improved in recent months, partly due to a recovery in investor sentiment and business confidence. He said that over the medium term, the growth outlook is higher than projected in last year’s Medium Term Budget Policy Statement.

In a further effort to encourage economic growth is the continued collaboration between government and NEDLAC to improve the country’s investment ratings and accelerate economic growth.

“There has been a lot of uncertainty in recent years which has resulted in a fairy stagnant property market up until now,” says Renecle. “We have reached the bottom of the property market cycle, which was also adversely affected by the political and resulting economic climates. The recent political changes are expected to bring about positive growth quicker than originally anticipated by many economists and experts.”

It is anticipated that the national GDP will grow at in excess of 2% for 2019, however Renecle expects a effective growth rate of more than 3% in Gauteng. Based on this, Renecle expects the residential property market to experience price escalations due to the increasing consumer/investor confidence which will, in turn, spur residential property demand and therefore price inflation.

This means that now is the perfect time for investors to look at adding to their property portfolios. “When investing in property at the bottom of the cycle, investors stand to gain the most in terms of long-term growth.”

Investment-based residential property purchases are an ideal investment option in any economic climate, according to Renecle.  But he says that being on the brink of the best potential for property value growth South Africa has experienced in recent times, savvy investors would do well to explore property investment options in key business nodes such as Rosebank and surrounds, as these types of property will generally always have the highest rental demand and capital appreciation potential.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us