Homes market will shrug off Zuma confidence vote

The State President’s widely-expected survival of the ninth consecutive parliamentary vote of no confidence in him should have little or no material impact on South Africa’s generally flat-lining residential property market. There is no question that a majority vote against him would have triggered a welcome uptick in sentiment, which is the market’s key driver. And it would have added traction to a home buy/sell momentum that, until now, has been pretty languid in virtually all market spheres. This excludes, of course, the homeowner ‘semigration’ to Cape Town phenomenon, which now appears to be losing steam.

Encouraging resilience

Until now, the sheer resilience that residential property has shown in the face of bland market conditions has been encouraging, to say the least. All the more so when taking into account the negative circumstances into which the South African economy, together with the nation’s consumers, have so far descended. The wide scale of the country’s social, political and economic regression is illustrated by the more than 120 Zuma-appointed cabinet ministers and deputy ministers that have come and gone – along with reportedly over 100 directors general – since the start of the current presidency in 2009. As a group, these top-end public servants have seemingly continued to be shuffled, re-shuffled, and re-cycled – a process that suffocates personal ambition and progress. It also fosters inefficiency, and prevents Government departments from building, and sustaining, momentum in the services they provide.

State capture

Superimposed on this strategy – if, indeed it is a strategy – is the reportedly R100-billion that has to date been siphoned out of the national economy by the so-called ‘State Capture’ process. 

As the ‘GuptaLeaks’ revelations continue to roll out, the tentacles of the pervasive ‘capture’ of state capital will inevitably be seen to have spread even wider. This reflects badly on the leadership of the country.

A market turnaround    

That is why history is now repeating itself. Civil society is once again closing its ranks – in much the same way as it did in the fight against Apartheid – in order to combat the State Capture plague. The point is that these negative circumstances are not causing the market to descend into a black hole. The opposite in fact is emerging. The ‘close call’ of the Confidence Vote shows a hardening and a coming together against the forces undermining South Africa’s progress. And there are even some signs of a market turnaround beginning to emerge. The fact is that the country’s residential property market always presses on regardless. In the process, it continues to reinforce the fact that property is a primary need; that a roof over your head is, and remains, a fundamental necessity. It is, however, looking for signs to lift. A successful confidence vote would have hastened a turnaround in the market, but I believe ‘a coming together’ has started which has stabilised the market and is contributing to signs of an improvement in the residential property market.