“Don’t panic. Price realistically. And accept that deals will almost inevitably close with some degree of price discomfort for both buyers and sellers.”
That’s the advice of long-standing Gauteng homes marketer Ronald Ennik as 2016 unfolds against the background of South Africa’s currently deteriorating socio-economic and -political landscape.
“The property market has been in worse situations before – and has always rebounded,” says the founder and principal of Ennik Estates, the exclusive affiliate in Gauteng of the worldwide Christie’s International Real Estate organisation, says Ennik.
“For those who may have forgotten, interest rates peaked at 25%, in January 1985; inflation nudged a record high of 21% a year later; and nominal house prices declined by 10 per cent in the same time frame,” says Ennik.
“It happened against a background of extreme uncertainty. Townships had become ungovernable under apartheid rule. Bomb blasts and other forms of vigilante violence (including ‘necklacing’) had taken hold. A government-declared State of Emergency was in place. And the doom merchants were packing for Perth and other perceived safe havens abroad”.
“At the same time, the rest of the world launched a disinvestment and economic sanctions campaign that thrust South Africa into global isolation,” says Ennik.
“It all came together as arguably the worst scenario the SA homes sector had ever faced. Yet the market bounced back, as always – and later went on to record its biggest-ever bull run”.
“Why? Because residential property – particularly in top-end suburbs of major cities like Johannesburg – remains one of the best hedges against difficult socio-economic and -political conditions such as the South African economy now faces,” says Ennik.
“Whether it be in Lagos, Luanda, Dar es Salaam, Nairobi – or even Harare – upmarket homes in prime areas in most African cities hold their values well, compared with European cities…in spite of the turmoil they face from time to time,” concludes Ennik.