Homes market sentiment needs an "A Team" to run the country
Category Blog
What indicators should we look for that could improve sentiment in the South African residential property market?
The most important would be the removal of the threat of a "B Team" governing our country rather than an "A Team" such as that currently led by President Cyril Ramaphosa - notwithstanding the flaws within it.
To achieve that objective, the key, visible, high-profile people who played a role in State capture and corruption on a grand scale need to be brought to book. The sooner it happens, the better the outcome.
Thatt would be a major breakthrough in terms of positive sentiment in the country as a whole - and, not least, in the homes market. And it would mark the beginning of the closure of that dark chapter in South Africa's history.
The longer it takes to happen, the bigger will be the threat that a "B Team" - such as that once led by our president's predecessor - could return to power.
A heavy price paid
In that case, sentiment will remain depressed, simply because it would be unwise to make a major property - or any other - investment in a country that has already paid a heavy price to corruption...and remains on that path.
The objective of investment is all about achieving growth. The previous ("B Team") government proved, without doubt, that it was incapable of providing growth.
That was partly because of poor leadership, flawed strategies and, above all, the vast amount of money - reportedly at least R500-billion, and, possibly, as much as R1-trillion - that was siphoned off the national economy under its watch.
So, while the "B Team" remains in the background as a threat to toppling the reigning "A Team", investment in all sectors of the economy - including residential property - will be thin.
Can the ANC turn?
The big question here is: Can the ANC turn this corner on its own? Can ANC leaders turn on other ANC leaders? Can ministers turn on other ministers?
So far, no ministers have been charged. Granted, there have been some changes (mainly to portfolios).
Another question : Can Ministers be charged and prosecuted by others in their own political party? That seems to be the sticking point - and it is not confined to South Africa. Government Ministers worldwide have difficulty turning on themselves when their own kind have done wrong.
It seems that political allegiance around the world stands above the rule of law. It overrides law and order.
In South Africa, can the rule of law be held in high regard in political allegiance? No, it cannot - and that's the stumbling block to sentiment in our country.
The ANC will not be able to prosecute its own - just as the Republicans perceive no wrong-doing by Donald Trump; and the Conservatives in the UK would rather choose to follow Boris Johnson over a cliff rather than do the right thing on Brexit. That's why their party is in a shambles.
The point is that global political rule of law has eroded. All around the world you can probably get away with whatever you want to get away with. If your political party is strong enough, you don't have to follow the rules.
Economic indicators the real drivers
The real drivers of sentiment in the residential property market in the pre-Jacob Zuma Presidency years were economic indicators - such as the strength of the Rand; interest and inflation rates; balance of trade; consumer spending; business confidence; and tourism inflows.
It is frustrating that, in the politics of today, national sentiment is driven by the behaviour of the Ruling Party.
Author: ronald Ennik
