South Africa a Backwater No More!
South Africa used to be meaningful on the world stage. For anyone around in the 1990’s our country was often in the world news stream. A lot of this was fuelled by the birth of the Rainbow Nation and having an iconic statesman as our President in Nelson Mandela. However, we didn’t sustain our importance and as we entered the 2000s our star began to wane, with a brief bright burst for the 2010 World Cup, seaming to spell the end of our significance. We became the bad news backwater of the international scene, fraught with corruption and inept economic growth, we weren’t seen as newsworthy.
However, over the last few weeks, the world’s most powerful man, Donald Trump, thrust Mzansi into the spotlight once again, by incorrectly stating that our government was appropriating land and then decided to withdraw aid and enforce tariffs onto South Africa imports into the USA. Love him or loath him, it’s pretty obvious from these actions that The Donald wants South Africa to align with the US and the west, as opposed to China and the BRICS nations. Although the circumstances around our re-entry into front page news may have been controversial and tainted with emotive misinformation, I believe it is indicative of South Africa starting to enter out of self-imposed hibernation.
This news comes at a time when South Africa has taken on the rotating presidency of the G20, already elevating our profile in 2025.
It's not just that we are back in the news, it seems like foreign investors are warming to the idea of investing back in South Africa. According to Jarrett Geldenhuys, Head of Investec’s Equity Capital Markets team, there was a significant increase in demand from foreign investors to meet with SA corporates at the recent Investec CEO conference and UK Roadshow, compared with the previous year – growing 33%, with over 800 meetings.
Recent foreign investment into property developments, often in conjunction with local partners, is driving positive change. The Amazon building, together with surrounding developments, is driving the regeneration of Observatory, Maitland, Salt River and Woodstock in Cape Town. Devonbosch, a cutting edge mixed used development, will be transforming the northern urban edge of Stellenbosch. Whilst on the KZN North Coast, Zimbali Lakes, which is about to open its Ernie Els signature golf course, and The Club Med development, due to open in 2026, are ensuring that the Cape won’t be the only region attracting foreign buyers.
Foreign buyers and tourists in the Cape, from a property perspective, sometimes come with a tinge of negativity amongst the public, as they are viewed as not only driving up home prices but also driving up long term rental pricing, due to the increase in demand for short-term letting. However, this to a large degree mirrors the evolution of any world class city, and will drive investment into surrounding towns, that will evolve into commuter communities with advent of the exciting rail plans being implemented by the excellent Cape Town Mayor Geordin Hill-Lewis.
On the topic of better infrastructure, the JSE hit record high in February, driven in part by solid fundamentals such as the sustained break in load shedding, albeit in with a few recent interruptions, and good news emanating out of Transnet, as well as a high gold price which is courtesy of the instability caused by the Trump administration.
The thriving JSE is not the only positive economic indicator. New car sales surged by 10.4% in January 2025 compared to the same time period last year. In addition, our bond market and currency have remained resilient.
Closer to home, on the residential property front, according to OOBA Home Loans there was a 16.2% increase year on year for bond applications in the 4th quarter of 2024.
Amongst this relatively positive outlook comes with the reality that our notoriously conservative Reserve Bank will keep interest rates higher than we would all like, in order to keep in step with US Federal Reserve, which are countering fears of inflation boosted by an expected US economic search thanks to, once again, the new US administration.
This, together with the concerns over the Expropriation act, may strike fear into residential investors. However, our agents with boots on the ground are reporting positive sentiment. This aligns with most of the economic data coming out recently. The Trump negotiating tactics have seemed to have galvanised the GNU which can only be a good thing. That togetherness seemed to have fractured over the Budget delay debacle, but if you are of the half glass disposition, it could be viewed as the GNU working.
The Land Expropriation Bill will be analysed, challenged and commentated on, until there is comfort amongst the regular punters and financial analysts. My take is that our property market and economy is going to follow The Bokke, The Test Match Proteas, Dricus, and all entertainers including The Ndlovu Youth Choir, Tyla, etc. by proving that South Africa is back baby!