Elections outcome ‘just what SA property sector needed’

Cape Town – South Africans did its property sector a really big favour last week during the local government elections, according to Chas Everitt CEO Berry Everitt on Tuesday.

“The world was once again presented with a picture of an orderly democracy as millions of South Africans went to the polls and were prepared to stand in long lines even in freezing weather,” Everitt said.

"Every South African was a winner in last week’s local elections,” he said. “We have all just done our property sector - which is the foundation of personal wealth for most ordinary South Africans - a really big favour.”

The ANC was left bruised and the DA energised, while the EFF emerged as kingmakers following one of the most hotly-contested elections in post-democratic South Africa last week.

Support for the ruling party fell to below 60% of the votes for the first time since 1994, who only won outright majorities in Buffalo City, Mangaung, and eThekwini.

The failure of any single party to break the 50% mark meant coalitions would be the order of the day for the next five years.

Everitt said that because there was such a large swing towards opposition parties and a more balanced political situation in which one party does not hold all the power has impressed observers, as it is a big indicator of stability going forward.

Everitt said South Africa is benefiting from the global uncertainty created by Brexit, and the slow economic growth in Europe, the US and Japan.

“Very low interest rates in developed economies in general are causing international investors to look again at the developing world, and SA now looks like one of their best options,” he said.

“And the immediate results, which are of benefit to all South Africans, are a large inflow of foreign capital and a huge improvement in the rand exchange rate, which is now back at pre-Nenegate levels.”

The rand improvement, he said, will help to keep a lid on inflation and give the Reserve Bank room to manoeuvre as regards interest rates.

“That in turn should create a more confident environment in which the economy can start to grow again, employment will increase and SA can avoid a ratings downgrade in December,” he said.

“There will then be even more confidence in our economy and in the country’s future – internally as well as externally – and that will be extremely positive for all sectors of the property market.

“New enterprises will need new office, retail and manufacturing premises, for example, newly employed workers will need rental accommodation in many areas, and home sales will get a boost as households feel the benefits of stable interest rates, a slower rate of price growth, a chance to lower their debt levels and greater job security.”