SA’s economic insecurity arising from what might or might not happen in political point view will have a key influence in South Africa’s property market in 2018, says Paul Stevens, CEO of Just Property Group.
Stevens feels that the country’s political situation leaves many people cautiously waiting on how the political landscape will pan out, to avoid making decisions that could affect them financially in the near future.
“If things remain stable on the political front, we are sure to continue into 2018 on a similar path that we have seen throughout 2017 with stable interest rates, house price growth remaining below inflation on average, while rental growth remaining slightly above inflation,” Stevens said.
The year 2017 is said to have been a tough trading year for the commercial property sector, with politics making headlines for most of the year – a factor, which affected the sector.
Principal at Black Pepper Properties, Simon Black said, low economic growth, a lack of strong, ethical leadership and the plundering of various state-owned institutions is causing structural hurdles which stand in the way of the economy achieving a much-needed higher growth path.
“As a result, property developers and landlords are working very hard both to get their developments off the ground, and to retain tenants effectively,” Black added.
Black said that unless there is a significant change in the political climate, coupled with effective measures to improve economic stability – a very limited growth and investment in the property sector is foreseen in 2018. FNB’s property barometer reveals that after 3 years of slowing annual average house price growth, it is believed that 2018 could see a slightly stronger growth rate, but cautions against expecting too much.
“From an average house price growth rate of 3.7% last year, we project the 2018 average to shift a little higher to nearer to 5%,” the report said. – BUSINESS REPORT ONLINE