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The general election is just
less than a month away,
and many property buyers have been hesitant to
commit to any bricks and mortar
investments pending its outcome.
Industry professionals are also
holding out for post-election policy
clarity and a subsequent improvement in market activity.
Bambie Heiberg, founder and
principal of Heiberg Estates, says
many buyers have been playing a
wait-and-see game, and it is hoped
the expected higher economic
growth following the election will
reactivate their confidence.
However, she says a major challenge is Eskom’s current difficulty
in supplying the country’s power
needs, which is not improving the
outlook for the property sector.
The only positive spin-off is that
homes with alternative back-up
sources, like generators or solar
panels, are in high demand.
“Full restoration of power supply by Eskom will take a number
of years, and until then will have a
major impact on demand for properties, residential and commercial.
Serious thought will have to be
given to new developments going
‘green’ and off the grid as far as
possible.”
This of course, will be costly
and affect ever-increasing property
prices.
Heiberg says the existing buyer’s
market is expected to prevail “well
after the elections” with increased
stock available.
“This does stimulate buyer
interest because well-priced properties, some below market value,
can offer unique investment opportunities across the board.”
Despite the uncertainty, she
says property has proved to be a
long-term safe-haven investment,
irrespective of outside influences,
and is globally acknowledged as
one of the most viable approaches
to sustainable wealth creation.
“Property has proved to be a long-term haven investment, irrespective of outside influences, and is globally acknowledged as one of the most viable approaches to sustainable wealth
creation. However, the industry has to be realistic, especially as there are so many factors out of its control, including the weakening rand.” - Bambie Heiberg of Heiberg Estates
Picture: Supplied
However, the industry has to
be realistic, especially as there are
so many factors out of its control,
including the weakening rand and
ongoing increases in fuel, electricity
and food prices.
“Another major factor is the
unreliability of Eskom and the
impact ever-rising electricity
prices have on inflation and this
will inevitably be a factor in the
consideration of the South African
Reserve Bank to keep our interest
rates stable, or to increase them in
the near future.
“We all are aware interest rates
and economic growth both impact
on the demand for property and its
resulting performance.”
Heiberg says since talks of land
expropriation without compensation began, as well as the added
pressure from the drought, the
value of farms in the country have
dropped by 32%, as recorded by
data from the Deeds Office property
registry.
“We can just hope and trust
President Cyril Ramaphosa will
keep to his undertaking that land
reform will happen within a rule
of law and in line with the constitution, and processes will be conducted in a fair, just, equitable and
transparent manner.”
More political and economic
clarity is expected following the
general election, she says.
“Hopefully the political and
economic stability we all have been
awaiting for many years will gain
momentum in the aftermath of
the election.
“Economic stability in particular is of vital importance to create
renewed foreign interest and investments in our fragile, worn-down
country.”
Heiberg says the onus is on
South Africans to decide whether