MAIN IMAGE: Grant Smee, CEO of Leadhome
Leadhome
As South Africans prepare to cast their votes on 29 May 2024 for the seventh democratic General Election, discussions within property circles revolve around the impact of the election on property prices. While many anticipate a potential shift in voting patterns, historical data reveals that the property market is more resilient than commonly believed.
Grant Smee, CEO of proptech company Leadhome, offers valuable insights into these trends. He asserts, “It’s frivolous of agents and property experts to hype up election years as having an impact on the property market.” Smee cautions against succumbing to election-driven speculation, emphasising that while there may be cautious sentiment during election years, historical data does not support the notion of a nervous market or a significant decline in property values. Smee suggests that attributing substantial fluctuations in the property market to election cycles alone oversimplifies a complex interplay of economic, social, and political factors.
Data provided by Lightstone, shows that although average property prices and registration numbers tend to dip during election years (such as 2014 and 2019), they typically rebound in the following year. Notably, when examining Cape Town’s property market, we see fluctuations in average prices between sectional title and freehold properties during and after elections. 2014, for instance, there was a trend towards higher prices in sectional schemes and lower values in freehold properties.
Smee highlights the reality of poor administration and poorly run metros, which may have a more tangible impact on property values than election outcomes. He suggests that buyers have become discerning, recognising that empty promises from politicians do little to improve living conditions. In his view, it’s unrealistic to expect a sudden uptick in prices and demand in areas won or lost by political parties, as more substantial factors drive the market’s behaviour.
Elaborating on the complexities of the property market during election years, Smee states, “While elections may introduce a degree of uncertainty, particularly in the short term, they are unlikely to alter the trajectory of the property market fundamentally.” He emphasises the importance of focusing on long-term trends, economic fundamentals, and the genuine needs of buyers. By adopting a holistic perspective, property market stakeholders can confidently navigate election cycles, disregarding short-term political noise.
Buyers and sellers need to look beyond political rhetoric and focus on the underlying factors driving the property market. Smee notes, “The market is smarter than election-year hype suggests, and informed decision-making should prevail over reactionary responses to political events.”
Cape Town
Johannesburg
*Graphic data provided by Lightstone Property Insights
