“Populist statements being made by politicians as they jockey for position ahead of the 2019 national election, are driving levels of business confidence right down, to a point where only 30% of the business’ are feeling confident about the economy”, says Annabel Bishop who is the Chief Economist at Investec.
Around February 2018, the National Assembly voted on a majority to adopt a motion for a review of the Constitution that could make it possible that land could be appropriated without compensation. It was upon this motion that a joint Constitutional Review Committee was set up. Its purpose would be to hold Public Hearings that would debate amending Section 25 of the Constitution and other clauses. If necessary, this would make it possible for the State to expropriate land in the public interest without compensation. On top of this, Parliament is busy strengthening the legislation around the Extension of Security of Tenure Act (ESTA). All of these, are reverberating across South Africa.
4.2.2 Economic Analysis
Tony Clarke, who is the Managing Director at Rawson Property Group said, “As South Africans reel from the news of a 2.2% GDP decline in the first quarter of 2018, property experts remain optimistic about forecasts for the remainder of the year. The property market, which has been experiencing some lethargy since early 2017, is not predicted to see any dramatic repercussions as a result of the recent economic bombshell. Property market demand isn’t driven purely by investors – it’s driven by people needing a roof over their heads. That need doesn’t disappear just because our economy hits a speed bump, and the resultantly reliable demand makes property, a much more resilient asset class during otherwise unstable or volatile economic times. However, that is not to say the economy has no effect on the property at all”.
Dr Andrew Golding, chief executive of the Pam Golding Property group said, “While the economy may be subdued at present, home buyers continue to capitalise on buying opportunities in the residential marketplace. This is especially evident below the R2m and R1.5m mark – a price band with particular relevance to first-time buyers seeking starter homes which, if wisely selected, will appreciate in time, enabling them to move up a notch on the property ladder.”