The Ramaphosa effect in real estate
Amid all the uncertainty about Cyril Ramaphosa’s presidency, the economy is doing well in most respects. Ramaphosa’s policies have contributed to a stronger rand, lower inflation and interest rates during the first quarter, all of which had a positive knock-on effect on the property sector
The Ramaphosa effect in real estate
When news surfaces of a change that holds the potential to grow the economy, confidence in the financial markets usually goes up, and the possibility of investment increases as more people feel certain about the future of the economy. Such was the case when Cyril Ramaphosa became the new president and promised to usher the country into a new era of economic development.
There’s still a lot more work to do, especially with the issue of Land Expropriation Without Compensation and the high unemployment rate, but Ramaphosa deserves some credit. His economic track record so far includes helping the rand to outperform emerging-market peers for much of the year, keeping inflation and interest rates low and saved South Africa from a further downgrade by ratings agency Moody’s. All in all, it was a good first quarter under Ramaphosa.
There was a great sense of optimism among South African. People are hopeful about the future, including those who participated in the property market. Buyers were eager to scoop up property for sale as homes spent on average 14 weeks and 1 day on the market, down the previous quarter’s 17 weeks and 2 days. It was also slightly easier for buyers to obtain finance as banks loosened their bond affordability restrictions. The average approved bond size in SA was 6,05% higher back then than it was 12 months ago.
For all the progress, it will take some time for the property market to fully recover. While he FNB Property Barometer reported that the second quarter of 2018 was a rather bleak one for the property market, there’s no doubt that it’s now better off than during the recession.
