Real Estate Investor Magazine South Africa Real Estate Investor Magazine March 2018 | Page 18

THE BIG DEAL
Golding agrees: “Speaking from a property perspective,
this is a market which is fuelled by sentiment, and as a con-
sequence, a Budget which satisfies the above criteria – on the
back of the election of President Ramaphosa – is expected
to go a long way towards reaffirming investor confidence in
real estate.”
Samuel Seeff, Chairman of the Seeff Property Group, em-
phasises the need for decisive action: “Although the succes-
sion of Cyril Ramaphosa as ANC and SA President has seen
the mood in the country turn increasingly positive and his
SONA 2018 address has sent the right messages, we need to
see this translate into action. We need a return to econom-
ic and political stability so that investors can feel confident
about investing and growing the economy.”
He explains that low investor confidence is already evident
in the property market: “Since last year there has been an
accelerating decline in activity, especially at the upper end
of the price scale, being above R8 million in Gauteng and
above R18 million in the Cape. Those who do not need to sell
or buy, are preferring to hold back. This means fewer trans-
actions and a decline in transfer duty paid to government.”
So, how exactly did the political fiasco of the last decade
affect property? Following the ANC’s ultimatum to Zuma,
involving a deadline to resign or face a motion of no con-
fidence, the local unit strengthened by nearly 2% from in-
tra-day highs of R11.91 to R11.72 after Zuma resigned.
Back in 2015, Zuma’s shock appointment of Nhlanhla
Nene as finance minister lead to the Rand’s collapse. This
triggered the appointment of Des van Rooyen as replace-
ment, followed by Pravin Gordhan taking over after only
four days. Then, in early 2017, Gordhan was replaced by Ma-
lusi Gigaba - part of a 10-person cabinet shuffle. Once again,
the Rand suffered.
With a new President and, seemingly, a clear plan for eco-
nomical and political stabilisation, the Rand is - and citizens
of South Africa - are positive. Gray explains: “There are many
factors that influence buyers and sellers willingness to engage
in real estate transactions, however, to a large extent buyers
and sellers gauge potential success on general reports and
opinions of the market, especially in an emerging market.”
Back in December, Rory O’Hagan, CEO of the Luxury
Portfolio division at Chas Everitt International reported that
the “orderly nature of the [ANC] conference and the election
of Mr Ramaphosa as the new ANC president seem to have
broken the log-jam, and we have already received a flood of
enquiries just in the past few days for homes in the R20m to
R30m range in Johannesburg.”
As often happens in situations where drastic change is im-
AND LAND EXPROPRIATION?
One of the most controversial statements in President
Ramaphosa’s SONA speech revolved around land
expropriation without compensation. It’s long been a
talking point among politicians, with many South Afri-
cans nervous about the impact this could have on the
economy. Time will tell how the Presidency chooses to
navigate this sensitive topic, but how would it affect
residential property?
Thus far, the discussion has revolved around agri-
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MARCH 2018 SA Real Estate Investor Magazine
minent, the market was cautious in the lead-up to the con-
ference. “With [ Johannesburg] being the financial capital of
Africa, there is generally no real shortage of luxury buyers
in Johannesburg, but they have been holding back over the
past few months in the sense that they have been reluctant
to spend more than about R10m to R15m, pending the out-
come of the ANC conference.”
Following President Ramaphosa’s maiden SONA in Feb-
ruary, the businessworld sighed a collective sigh of relief.
Jabu Mabuza‚ Convenor of the CEO Initiative said: “With
certainty‚ stability and consistency we are confident that the
country should see the much-needed improvement in invest-
ment that will stimulate growth and ultimately create jobs.”
Banking Association of SA MD, Cas Coovadia added that
it was a relief to finally have a presidency that is committed
to “build a society defined by decency and integrity‚ that does
not tolerate the plunder of public resources‚ nor the theft by
corporate criminals of the hard-earned savings of ordinary
people.”
President of Agri SA, Dan Kriek also adds: “We enthusi-
astically applaud the practical steps outlined to ensure policy
certainty‚ reduce government departments‚ grow the local
economy‚ attract investments‚ boost the manufacturing sec-
tor and grow the small business environment.”
Neeshan Balton, Executive Director of the Ahmed Kath-
rada Foundation summed up how most South Africans must
have felt while watching SONA: “It has been a refreshing
change to have a SONA without walkouts, without