How elections, land reform could impact SA property in 2019

An election year is always an interesting one for the property market, says Bruce Swain, CEO of Leapfrog Property Group.

According to Swain, this is because elections signal uncertainty, which generally sees a reluctance by buyers to commit.

"Uncertainty tends to evoke unease, and purchasing a property is a big decision (and investment), which needs to be coupled with confidence. This may seem elusive when the political future of a country is unclear," Swain said in a statement.

"The closer we get to the election, the more obvious the general sentiment around the favourability of investments will become."

The question of land expropriation would be a further factor, he added.

"There is definitely still some concern around this issue, which means buyers are cautious and sellers are sometimes over-eager," said Swain.

"At no point has government indicated that it would be pushing through a policy in which residential homes would be seized, and [government has said] any land reform measures would not be at the expense of the economy, national security and food production."

Business as usual

Although Swain acknowledges there is a chance that certain categories of land could be expropriated, he says the approach at Leapfrog is that, as far as residential property is concerned, its message is "business as usual".

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Swain said that what happens in the property market is often a reflection of what's happening in the country at large – politically, economically and socially.

"With the country just recently emerging from a technical recession, market movements continue to be slow," he said.

"Currently we're seeing residential property that is well priced because of a lower demand, which is good news for buyers, while serious sellers will likely be forced to err on the side of conservative when it comes to establishing their selling price."

In his view, it's likely that the demand for property in sectional title and security estates will continue to grow in 2019.

"New sectional title units are often more affordable than freehold properties, and thus an easier way to enter the property market," said Swain.

Source: Fin24

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