Are you planning to sell your property in South Africa fast, worried by the turn of events in that country? One can understand why – the last few years have been a highly turbulent period for the South African economy as well as for the property market, largely because of the political instability in the country.
South Africa’s President Jacob Zuma has been hit by a series of corruption scandals. He has lost a lot of the public support he had when he came to office in 2009. He only just survived a no-confidence vote called against him and his party, the African National Congress (ANC).
Zuma has been at the helm of affairs for eight years now. His rule has been marked by a severe economic recession and it does seem that the South Africa has regressed by quite a lot during this time.
There is every chance that Zuma will be replaced before seeking a re-election in 2019, according to Barnaby Fletcher, a leading political analyst for South Africa at Control Risks.
Mr. Fletcher said in an interview with the CNBC, "This is worse than their worst-case scenario. We never believed it (a no confidence vote) was very likely. Although there are a lot of ANC MPs (members of parliament) who are not happy, they were never likely to vote en masse for a proposition put forward by the opposition."
"It does not make sense to overthrow Zuma now - get rid of Zuma now and that throws leadership bids up in the air. But the party certainly knows how to exert itself," Mr. Fletcher said. He added that there was a "very credible possibility" that Zuma would not last out until 2019.
So what does that mean for the South African property market? The residential property market in South Africa is surprisingly resilient and seems to be completely divorced from the political situation in the country.
Sure, there is no question that the real estate market would do better had there been a stable government in power, but the fact is people can still make money from an investment in property in South Africa – as compared to investing in the stock market here.
So, if you have a home or apartment in a posh neighbourhood in Cape Town, for example, you have nothing to worry. Cape Town is a beautiful city with a flourishing property market. Home prices have been rising here year after year, regardless of the current state of the economy.
Similarly, some of the better neighbourhoods in cities such as Johannesburg, Pretoria and Durban have shown surprising resilience and continue to attract a lot of interest. There’s still a big rush among foreign investors to buy property in South Africa online and we expect this demand to persist for a while.
The people of South Africa may not trust their politicians too much, but they do have an innate confidence in their country. So once the politics settles down a bit, one expects the property market here to recover much of the lost ground.