As day zero looms and concerned residents of Cape Town put all the measures possible in place to save water many are trying to gauge the knock on affects of the drought.
It is difficult to predict how the drought will influence consumer confidence as well as investor interest. There are many pundits predicting doom and gloom and warning against adverse effects on key macro economic pillars.
The property market in particular is a sector that has unprecedented resilience to external factors largely due to its long term investment cycle.
Undoubtedly certain elements of the market will be influenced. Buyer demand from semigrant provinces like Gauteng might slow down a little but I don’t see it being dramatic. We need to understand that Cape Town’s impressive property growth and demand go beyond the water crisis. The lifestyle allure Cape Town offers, the high quality of schools, the great ROI on property are only a few of the major attractions.
It is too early to pull significant data at this stage that identifies for certain whether the drought has impacted the market. We might only see the patterns by the end of the year.
Due to the unknown sequence of events in the next few months regarding the drought it remains difficult to make any calls for certain.
Harcourts Maynard Burgoyne Principal