Weekend Argus (Saturday Edition)

Covid leaves a long shadow on economy


SOUTH Africa’s economy looks set to recede “well into 2025” and this will impact on the country’s property market in particular ways, says Merle O’Brien, principal futurist and head of foresight and innovation at at Cape Townbased Creation iLab – the African Innovation Institute for the


Property stock will increase in waves over the next six months to six years as cash-tight property owners sell and, in the shortterm – six months to a year, more tenants will cohabit instead of renewing their leases.

These occurrence­s are a all the result of Covid-19.

She says long-term drivers of change include economic contractio­n and this will result in:

People moving and emigrating more.

Baby boomers downsizing. Millennial­s battling to buy homes. Gen Z showing greater propensity for risk.

Rising female empowermen­t and “huge loss” of consumer confidence among men.

“Overall consumer spending is slowing over the long term but consumer birth rates in Africa will continue rising.”

Employment rates will continue to decline, leading to bond delinquenc­ies of luxury homes and “reducing generation­al value”.

“More entreprene­urs will work

♦ ♦ ♦

♦ in home-based, micro-retail online business,” says O’Brien.

Future housing options will be heavily impacted by:

Government policies such as land expropriat­ion without compensati­on, property taxes, incentives and stimulus relief grants.

Investors who will use the opportunit­y to buy low and sell high – or sit out the next five years.

Interest rates, the stock and currency markets that are subject to more shocks.

Consumer confidence in taking on bond debt.

“Covid has intensifie­d the rate of economic contractio­n,” O’Brien says.

 ??  ?? The shrinking economy will affect the SA property market.
The shrinking economy will affect the SA property market.

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