South Africans are still celebrating following the decision by Jacob Zuma to step down as President of SA, because they believe it will open the doors to a much better economic future for the country as a whole.
And nowhere is this jubilation more evident than in the residential real estate industry, which is set to take off as positive consumer and business sentiment starts to translate into more investment, greater economic growth, increasing employment and more home affordability, says Rudi Botha, CEO of BetterBond.
“In fact, we are already seeing the effects of this new-found confidence in the property market, as reflected in the steadily rising number of bond applications attaining approval since the ANC conference in December when Cyril Ramaphosa was elected as the new President of the organisation and the country began to anticipate Mr. Zuma’s resignation.
“Our statistics show an average 10.8% growth in the percentage of applications approved from October to December last year, with December ending on a conversion ratio of 62%. That is a remarkable increase from the previous year.
“The lower decline ratios and increase in approval rates show that the confidence of the banks has also improved, and that they are keen to lend to homebuyers who are able to meet their credit, employment and deposit criteria.
Even more encouraging, Botha says, in February month-to-date, BetterBond also recorded a significant increase of 34% in the overall value of bonds granted, compared to February 2017 month-to-date.
Looking at offshore investments, Andrew Rissik, Managing Director of Sable International explains : “We are seeing rand exchange rates last seen in 2015.” Coupled with that, says Rissik, although the UK pound has strengthened substantially against the USD making up most of its post-Brexit losses, this be due to USD weakness rather than Pound strength. This can also be seen in the marginal recovery of the Pound against the EURO. “From a SA point of view, this bodes very well for the UK investment arena as the current rand strength offsets the negative effect of pound strength for South African investors.”
President Ramaphosa has his job cut out for him, but experts are positive. Peter Leon‚ partner and Africa co-chair of law firm Herbert Smith Freehills comments that “The election of Ramaphosa may signal a recommitment by the ANC to the NDP (National Development Plan) which Ramaphosa had a large part in drafting‚ as deputy chair of the National Planning Commission.”
With positive signs against corruption and inefficiency emerging in the early days of Ramaphosa’s presidency, his SONA speech might sum it up best: “We are determined to build a society defined by decency and integrity, that does not tolerate the plunder of public resources, nor the theft by corporate criminals of the hard-earned savings of ordinary people.”