Elections outcome `just what SA property sector needed`

Source: Fin24, 09/08/2016

Cape Town – South Africans did its property sector a really big favour
last week during the local government elections, according to Chas
Everitt CEO Berry Everitt on Tuesday.


"The world was once again presented with a picture of an orderly
democracy as millions of South Africans went to the polls and were
prepared to stand in long lines even in freezing weather," Everitt
said.


"Every South African was a winner in last week`s local elections," he
said. "We have all just done our property sector - which is the
foundation of personal wealth for most ordinary South Africans - a
really big favour."


The ANC was left bruised and the DA energised, while the EFF emerged
as kingmakers following one of the most hotly-contested elections in
post-democratic South Africa last week.


Support for the ruling party fell to below 60% of the votes for the
first time since 1994, who only won outright majorities in Buffalo
City, Mangaung, and eThekwini.


The failure of any single party to break the 50% mark meant coalitions
would be the order of the day for the next five years.


Everitt said that because there was such a large swing towards
opposition parties and a more balanced political situation in which
one party does not hold all the power has impressed observers, as it
is a big indicator of stability going forward.


Everitt said South Africa is benefiting from the global uncertainty
created by Brexit, and the slow economic growth in Europe, the US and
Japan.


"Very low interest rates in developed economies in general are causing
international investors to look again at the developing world, and SA
now looks like one of their best options," he said.


"And the immediate results, which are of benefit to all South
Africans, are a large inflow of foreign capital and a huge improvement
in the rand exchange rate, which is now back at pre-Nenegate levels."



The rand improvement, he said, will help to keep a lid on inflation
and give the Reserve Bank room to manoeuvre as regards interest rates.



"That in turn should create a more confident environment in which the
economy can start to grow again, employment will increase and SA can
avoid a ratings downgrade in December," he said.


"There will then be even more confidence in our economy and in the
country`s future – internally as well as externally – and that will be
extremely positive for all sectors of the property market.


"New enterprises will need new office, retail and manufacturing
premises, for example, newly employed workers will need rental
accommodation in many areas, and home sales will get a boost as
households feel the benefits of stable interest rates, a slower rate
of price growth, a chance to lower their debt levels and greater job
security."