As the 2024 South African general election approaches, it marks a pivotal moment in our nation's democratic journey. With a record-breaking 27.79 million eligible voters, surpassing numbers seen since 1994, the political landscape is charged with anticipation. Notably, the emergence of independent candidates vying for seats and the looming possibility of a coalition government add layers of intrigue to the electoral process. As election campaigning goes underway, property practitioners are no doubt wondering how the ballot results will impact the local real estate market.
Unpacking the poll results
To find out more, Prop Data polled property practitioners to find out what impact they believe the election will have on the property market. The results found:
40.6% feel it will have a positive impact.
33.7% feel it will have a negative impact.
25.7% feel it will have no impact.
According to Raul Flores, Owner and Managing Director at TITAN Property Group, the polls reflect a “cautiously optimistic outlook among property practitioners, which aligns with his observations at his business”. He says, “The positive sentiment likely stems from the anticipation of policy stability and economic growth post-election, fostering a conducive environment for real estate investments and developments.”
However, Flores also highlights the significant percentage of practitioners expecting a negative impact. “This likely indicates concerns about potential political and economic uncertainty that elections often bring, which can temporarily affect investor confidence and market dynamics in the real estate sector,” he adds.
Michelle Cohen, Principal/Franchisee at Leapfrog JHB North East, also recognises the “glass half full” results of the poll. However, she believes it speaks more to the resilience of local property practitioners. “I think that estate agents are optimistic people by nature. However, I don’t believe that the results above are a true reflection of how the elections will affect the market.”
Activity leading up to the election
Although tough to gauge, property practitioners believe that election jitters are making an impact when it comes to investment. “The election impact is different depending on the segment of the market you’re in,” says Rubé Bradfield, Principal (MPRE) at Home and Hectare. “However, in general, we are seeing investors adopting a wait-and-see approach to decide how much further they are prepared to invest in brick and mortar in South Africa.”
Also agreeing, Cohen says she’s seen fewer enquiries for properties for sale on the portals. “This is a national trend, Western Cape aside. If this is election-related or “long weekend” related, I am not sure. Show days, however, in certain areas are still well attended.”
Flores believes this cautious approach is resulting in a more balanced market. “People are waiting to see the election outcomes before making significant decisions. This has also led to an increase in short-term leases, as market participants hedge against potential volatility.”
Also on the positive side, Flores says there has been a noticeable uptick in commercial property investments and leasing, possibly driven by investors seeking to lock in deals before any post-election policy changes. He has also seen a growing interest in sustainable and green buildings, reflecting a broader shift towards environmental responsibility in the sector.
Voting results and the market
The 2024 South African general election is shaping up to be a groundbreaking milestone in the country’s history. But will it have an equally influential effect on the property market? “Positive election outcomes that reinforce stability and economic growth can significantly boost investor confidence, leading to increased capital inflow into the real estate market,” says Flores. “This can spur new developments, enhance property values, and strengthen the overall market.”
On the negative side, Flores says election results leading to uncertainty or unfavourable policy changes could create a short-term slowdown in the market. “This might result in cautious spending by consumers and investors, impacting property sales and development projects,” he adds.
Whether positive or negative, some practitioners believe the end of the political season uncertainty will benefit the real estate market. “Life will go on,” says Bradfield. “Buyers will still need to move closer to schools or their workplace and sellers will still downscale or move to retirement villages.”
At the end of the day, Bradfield says the election results will truly be felt if it impacts the interest rate. “This is the biggest driver of our industry, which will bring about a change in demand for properties and ultimately change from a buyers market to a sellers market, should interest rates come down towards the latter part of 2024,” she shares.
Winning the real estate race
As South Africans consider who to place their x against, property practitioners should also look to make their mark during the election season. Here are strategies to put into action leading up to voting day:
• Return to the drawing board: “During this period, you have to be proactive. Connect with your entire database regularly as you never know who might be in the market to buy or sell,” says Bradfield.
• Become the go-to area expert: According to Bradfield, it also pays to know your area well and be able to highlight its value proposition. “People look out for long-term potential and value, especially in uncertain times,” she points out.
• Stay informed and flexible: “Keeping abreast of political developments and potential policy changes will allow you to swiftly adjust your strategies,” says Flores.
• Diversify your portfolio: Flores highlights including a mix of residential, commercial, and industrial properties can also mitigate risks associated with market fluctuation.
• Work on your relationships: “Maintaining open communication is crucial during times of uncertainty. Offering reassurance and demonstrating market expertise can help in retaining client trust and business, regardless of the election outcomes,” shares Flores.
• Keep your efforts consistent: According to Cohen, the results don’t lie — consistent practitioners remain consistent in their activity and their sales in all markets. “Put your head down and list, list, list. If the enquiries are slow now, the market will soon turn and the hard work that you put into getting the listings will attract the right buyers. We are still finding that the right-priced property lists on Monday and sells on Sunday — even in this current market,” she says.
Post-election action plan
After the dust has settled, savvy property practitioners should take time to evaluate the new market dynamics. “It's essential to conduct a thorough market analysis to understand the new dynamics and identify emerging opportunities,” urges Flores. “Practitioners should be ready to adapt their strategies to align with the prevailing economic and political climate, focusing on sectors showing growth potential.”
Bradfield says staying informed can help practitioners elaborate on post-election factors that might influence certain segments of the property sector. “If you are the expert in your field, you will create strong relationships built on trust and this in turn means referral business which is the biggest compliment that any practitioner can ask for,” she says.
Cohen does encourage practitioners not to get caught up in the election aftermath. “Focus on what you can control — your own activity, your reputation, price counselling, your sellers, and your work ethic. You cannot control election results or election outcomes. Be aware, but don’t be consumed by the results.”