It’s turnaround time for the Jozi homes market
Category Blog
“In the business world, the rear-view mirror is always clearer than the windshield.” – US business mogul Warren Buffet. A glance at the latest economic indicators and trends makes it quite clear that the worst is virtually over for the homes market in Johannesburg’s Northern Suburbs and Sandton.
For instance:
• Business confidence is now at a three-year high
• Foreign investors have reportedly purchased R11,3-billion of South African shares so far in 2018
• The Rand has been outperforming both developed and emerging market currencies since December 2017
• Exports are rising
• Quarter-on-quarter real economic growth was up at 3,1% in the fourth quarter of 2017, while agricultural production rose by 37,5%.
• Last, but not least, Government has seemingly kicked the controversial nuclear energy project into touch – at least for the time being.
Instead, it plans to go ahead with the long-delayed R56-billion, multi-project, private sector renewable energy build. It is an initiative that will create over 61 000 full-time jobs – for existing and potential homeowners no doubt!
A market turnaround
Together, these and many other factors paint a clear picture of a market turnaround under way. Opportunities are abundant right now in the Johannesburg homes market. And it is showing early signs of the uptrend I predicted at the end of January. True, the turnaround may well look modest at this stage. But it seems set not only to be sustained but also to gather momentum.
Prospective buyers who have been holding back while waiting for further home price declines may well miss the boat if they don’t act now or, at least, in the months ahead. Possibilities still exist at this stage to buy at a significant discount – considering how undervalued Johannesburg prices have been for quite some time.
Looking back, the residential property market in Gauteng has faced its toughest market conditions since the 2008 global property crisis. (Is it pure coincidence that it virtually matches the exact time frame of the Jacob Zuma presidency?)
Encouraging signs
It was certainly a period in which the tempo of the South African residential property market was at best flat-lining – with the exception of Cape Town (before its drought took hold and prospective buyers from upcountry became more cautious). Buyers are increasingly competing to secure properties and this shows that the residential property market in Johannesburg’s Northern Suburbs and Sandton promises an encouraging upward trend of renewed activity and opportunity.
This comes on the back of (a) the Cabinet appointment by President Cyril Ramaphosa of new, and returning, ministers to key Government portfolios such as Mining; Finance; and State-owned Enterprises, and (b) a stream of improved, market-friendly economic indicators and developments.
Author: Ronald Ennik
