Property market overview
Residential property market is beginning to stabilise At the beginning of November, Property Review attended the annual Pam Golding Media networking function at their head office in Bishops Court, Dr Andrew Golding the group’s CEO outlined the market’s trends and outlook.
Dr Andrew Golding, CEO
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verall, 2019 is proved to be another year of tepid economic growth resulting in yet another year in which government revenues have disappointed – placing additional pressure on the country’s financial situation and in turn, on consumers.
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SOUTH AFRICAN PROPERTY REVIEW
Dr Andrew Golding pointed out, “Until there is greater clarity on the prospects of a recovery in the local economy, the housing market, which remains resilient but is currently weighted in favour of buyers, is unlikely to enter another fully-fledged recovery.
The recent recurrence of load shedding, ongoing socio-political challenges and a volatile global environment have created further headwinds.” As with the opinion of many of the country’s leading economists Golding echoed their sentiments “It is also important to keep in mind that the ongoing turmoil created by Brexit, the brewing trade war between China and the US and the downturn spreading across Europe is raising the very real threat of a global recession. It was recently noted that the Wall Street Journal’s uncertainty index rose to a record high in August. This suggests that financial markets are currently more uncertain than was the case after 9/11, the European debt crisis and Trump’s election. Current estimates suggest that there is a 30% probability of a global recession.” Notably, Professor Francois Viruly (UCT), recently pointed out that it is not the depth of the slowdown that is hurting the property market this time but rather the length of time the economy has remained sluggish. Continued pressure on consumer household finances, and on property developers, is creating a robust headwind for the market. However, there is one upside to this sustained period of weak growth. Price pressures from higher global oil prices and/or Rand weakness are having limited impact on the inflation rate, which is stabilising around the midpoint of the inflation target range (36%). This means that there is little pressure on the Reserve Bank to raise interest rates. There is even a small
