top of page
Pillars of Justice

South Africa's Property Market Set to Shine with New Government of National Unity

South Africa's property sector is poised for significant growth following the establishment of a new Government of National Unity (GNU).

For the first time in the democratic era, the African National Congress (ANC) has lost its parliamentary majority, securing only 40% of the national vote. Consequently, the ANC has formed a GNU with the Democratic Alliance and Inkatha Freedom Party (IFP).

Together, the parties in the GNU command around 65% of the South African vote. With additional support from the National Freedom Party (NFP), they have successfully formed governments in the highly contested provinces of Gauteng and KwaZulu-Natal.

Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, praised the ANC’s decision to join a DA-led coalition, calling it “the most selfless and mature decision” since Jacob Zuma's presidency began in 2009.

Geffen expressed optimism about the country's future, highlighting the prospect of widespread prosperity. "The rampant mismanagement of state assets will take time to reverse, but the long-overdue checks and balances will now start being enforced. As the culture of corruption diminishes, our country and economy have a genuine chance to grow and prosper," Geffen stated.

She added that this political stability would enhance international investor confidence in South Africa, positively impacting the property market in the mid-term. "The outlook is certainly more positive than it was a month ago," she said.

Optimistic Interest Rate Projections

Stephen Whitcombe, Managing Director of Firzt Realty, noted that the GNU could lead to earlier-than-expected interest rate reductions. “Lower interest rates would make home ownership more affordable and help prospective buyers qualify for home loans,” said Whitcombe.

However, he stressed the need for increased investor and consumer confidence in the country’s future. The renewed confidence following the GNU agreement was reflected in a 1.6% rise in the JSE Africa All Share Index last week and a 3% appreciation of the Rand.

“If this trend continues, the Rand will strengthen further, inflation will decrease, and the risk of imported inflation will reduce. This could prompt the Reserve Bank to cut rates in the coming months, easing the financial burden on millions of South Africans and potentially boosting economic growth and job creation,” Whitcombe explained.

He added that many potential home buyers and investors were waiting for the election results before committing to their purchase plans. Now, with the GNU in place, there is increased willingness to proceed, and banks are eager to lend.

Even at the municipal and provincial levels, the GNU partners are expected to address issues such as homelessness, potholes, and outdated water and electricity infrastructure, which were previously hindered by political infighting and unstable coalitions.

“Consequently, we are confident that this year will be better for the property market than anticipated, with home values expected to increase in real terms,” concluded Whitcombe.

For expert legal advice and assistance in property transactions, contact Gerhard Barnard Inc Attorneys. Our experienced team is here to help you navigate the evolving landscape of South Africa's property market.

1 view0 comments


bottom of page