SONA 2019: A successful property market relies on a strengthened economy

All eyes will be on President Cyril Ramaphosa as he takes to the podium to deliver his second annual State of the Nation Address tonight at 7pm.

The State of the Nation Address (SONA) 2019 marks the official opening of Parliament for the new year and will give President Cyril Ramaphosa an opportunity to address political policies and key challenges that lie ahead.

This address will have a direct impact on various business segments, and of course investor confidence.

John Jack, Galetti Corporate Real Estate CEO shares his thoughts on why anyone in the property game should be watching the SONA address closely.

"A successful property market relies heavily on a strengthened economy for investment. Investors need to believe that their money will be secure and protected, and this security is encouraged by positive policies and sustainable taxes," said Jack.

President Ramaphosa’s address will give an indication of the direction that the economy will progress and investors will be watching it closely..

Everyone will be watching the address hoping that the message gives clarity to the business sector as a whole. Clear policy allows occupiers and investors to take decisions related to their real estate portfolios. From an occupier perspective, whether to expand to new premises or consolidate their footprint into a smaller building will be front of mind. 

This is driven by changes in their employee count and/or inventories held. For investors, the decisions would be whether to sell or hold on to their portfolios in anticipation of reduced vacancies and capital growth. International investors will be watching it closely and so should anyone in the property game. South Africa needs foreign investment, but international investors need security and we need to give them confidence. 

A key topic of interest will be the matter of land expropriation without compensation, which hopefully will be addressed in such a way so as to reassure foreign investors.

Another main focal point will be corruption President Ramaphosa has already been under fire from the governments of Germany, the United Kingdom, the USA, the Netherlands and Switzerland. The memorandum written to the presidency – signed by all five countries – spoke of a concern about the challenges of foreign investment and so this part of the SONA address is an important one.