Property sector’s cautious welcome

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 diving for oysters in this week’s State of the Nation Address.

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

After all, Eskom and the country’s other state-owned enterprises (SOEs) still pose what economist Erwin Rode of Rode and Associates called “a fatal risk to the South African economy”. The good news is that Ramaphosa admitted this in his address.

“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 though, Rode said, is that it is unclear how the problem will be solved.

While chief executive of Greeff Christie’s International Real Estate Mike Greeff noted the adamant reiteration of land expropriation without compensation, he was holding on to Ramaphosa’s commitment to prioritising food security and reforming agricultural land first. He was also optimistic following the president’s “substantial emphasis” on Eskom exploring sustainable and renewable power sources.

Echoing this, Rudi Botha, chief executive of bond originator BetterBond, said the address showed Ramaphosa and his team had been working “very hard” to increase investor confidence, economic growth, and job creation – the three things that higher home ownership and the increased personal wealth that this brings is dependent on.

Similarly, Berry Everitt, chief executive of the Chas Everitt International property group, felt that the address was “very optimistic and forward looking”.

“We are excited by the announcement of several initiatives that will not only reduce the social housing shortage but significantly increase the number of South Africans who are able to build their own homes and enter the formal housing market – if they come to fruition.”