Glossy Sona not much to build on

FOR more than a year South Africa’s property market has been furiously treading water against very strong economic tides, so it is understandable that real estate bosses were desperately digging for oysters in last week’s State of the Nation Address (Sona).

And while they did find a few in President Cyril Ramaphosa’s speech, only time will tell whether they contain any pearls of recovery.

Words like “optimistic”, “inspiring”, “exciting” and “good news” have been used in the reactions of property moguls, but these have mostly been followed by “buts” and “howevers”. Plus, the fact that this is an election year cannot be overlooked when evaluating just how thick the layer of Sona’s glossiness is.

Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty, feels that while, on the face of it, Ramaphosa’s second Sona would most likely be broadly hailed as good news, it would take just a single scratch to the glossy coat of paint to reveal the sharpness of the precipice below.

After all, Eskom and the country’s other state-owned enterprises still pose what economist Erwin Rode of Rode and Associates calls “a fatal risk to the South African economy”.

The good news is that Ramaphosa admits this: “Eskom is in crisis and the risks it poses to South Africa are great. It could severely damage our economic and social development ambitions. We need to take bold decisions and decisive action. The consequences may be painful, but they will be even more devastating if we delay.” The problem, Rode says, is it is unclear how the problem will be solved.