PROPERTY economists report that all sectors of the property market are intact, notwithstanding the JSE’s 10% retreat in the past week.
Short-term losses are not unusual on the stock exchange but as companies continue to report good earnings growth, the market will stabilise, says Mariette Warner, head of property funds at Stanlib Asset Management.
There is no direct correlation between equity and property markets, notes Jacques du Toit, senior economist at Absa.
“Equity markets are volatile while property is more stable and slow-moving.”
Du Toit says there will be no short-term effect on the property market.
“Trends have peaked and the residential market is cooling down,” reckons du Toit.
He says investment focus will switch from residential to commercial property, with commercial properties performing relatively well over the next year or two.
“Listed property will not perform poorly but it will be difficult to expand portfolios, and acquire new properties, as investors will hold on to their investments.
“This is a short-term pull back and it will pass,” reckons John Loos, property economist at FNB.
Residential property is less susceptible to short-term volatility and there shouldn’t be any noticeable change, explains Loos.
In the long term, the slump in confidence will drive economic growth lower in the country, filtering through to lower disposable income and a change in the non-listed property market, he adds.
Loos expects a long-term path of bullish times and economic growth momentum to gather steam.
This is due to structural changes and good capital flows into the country have not ended,”he adds.
