MAIN IMAGE: Thato Ramaili – CEO of the PPRA, Denese Zaslansky – CEO of Firzt Realty, Berry Everitt – CEO of Chas Everitt International Property Group
Editor
Recently, the United States proposed a hefty 30% blanket tariff on all South African goods effective from August 1st, which has sent tremors through the local economy, with the property sector bracing for potential shifts. While real estate isn’t a direct export commodity, experts warn that its deep entanglement with broader economic health means the industry will feel the pinch.
Thato Ramaili, CEO of the Property Practitioners Regulatory Authority (PPRA), voiced concern over the proposed tariffs. ‘Such large-scale trade sanctions could erode investor confidence, stifle business expansion, and accelerate capital outflows. These factors weigh heavily on demand in both the residential and commercial property markets,” Ramaili explains. “A contracting export sector leads to lower company earnings, retrenchments, and ultimately a tightening in household spending–”dampening appetite for home ownership and weakening rental collections.”
For the commercial segment, Ramaili foresees increased vacancy rates, particularly in industrial and logistics hubs that are directly tied to manufacturing and export businesses. “If those businesses contract or close due to trade pressures, landlords will bear the brunt,” she warns, also highlighting a potential knock-on effect on construction activity, especially for large developments reliant on foreign capital or global supply chains.
“This will definitely make South Africa unattractive from a trading perspective, and we need intervention from the powers that be,” Ramaili concludes.
A blessing in disguise? The optimistic view
Despite the immediate apprehension, not all industry leaders view the tariffs as an unmitigated disaster. Denese Zaslansky, CEO of the FIRZT Realty group, suggests that while initial impacts may be negative, this decision could surprisingly prove to be a “long-term blessing in disguise” for South African property.
Zaslansky acknowledges that the agricultural, automotive, and mining sectors, as major exporters, are expected to be the most severely affected, potentially facing job losses unless the SA government’s ongoing negotiations yield favourable outcomes. Economists are already projecting a cut in SA’s growth rate from 1.5% to 1.2% this year, with the Rand already weakening by about 1% against the US dollar.
“An economic slowdown and employment uncertainty would of course lower demand for both residential and commercial properties,” Zaslansky admits. “But we believe this will be temporary, at most.”
Her optimism stems from a proactive response by many South African businesses, who have reportedly been “actively seeking out – and finding – alternative markets around the world for their products and services” in anticipation of higher tariffs. Zaslansky believes this could “accelerate SA’s long-term drive to diversify its export markets, cement new trading relationships with other countries and permanently reduce reliance on the US.”
She points to the African Continental Free Trade Agreement (AfCFTA), as well as relationships within the G20, Commonwealth, and BRICS+ nations, as avenues for new trade. This diversification, she argues, “bodes well for job retention and even creation in due course, and for housing demand.”
Furthermore, Zaslansky highlights increasing foreign investor interest in the local property market, driven by South Africa’s relative stability and growing exposure in other countries. These investors are acquiring rental portfolios and luxury homes, anticipating strengthening rental demand due to supply shortages and rising demand from those not yet ready to buy. The growth of remote work, enabling skilled South Africans to work for international companies without emigrating, is also seen as a stabilising factor for the real estate market.
Opportunities for the astute investor
Berry Everitt, CEO of the Chas Everitt International property group, echoes a similar sentiment, suggesting that while the tariffs could be a setback, they might also create exceptional opportunities for astute real estate buyers and investors.
“We do expect the real estate sector to feel the effects of the US tariff decision for at least a few months while SA businesses adapt. There could be job losses in the export-driven industries, and the banks are likely to be more cautious about approving home loans,” Everitt says.
“This will slow demand for both residential and commercial properties and cause many investors and developers to press pause on new projects.
The other side of this coin, though, is that property price growth will stabilise for a period and create opportunities for those who have a positive view of SA’s longer-term future, as we have, to negotiate with sellers and buy at prices that will prove to be highly advantageous.
What is more, we believe many buyers will soon find the real estate market one of the better places to invest as stock markets around the world become more volatile in response to the shifting US tariff scenario.
As a member of Leading Real Estate Companies of the World, we have seen how similar scenarios play out in other countries, and can provide sound advice to both buyers and investors seeking to maximise the opportunities now developing in the SA market.”
Note: The SA Department of Trade and Industry is still actively seeking to negotiate exemptions or adjustments to the imposed tariffs before the 1 August deadline, with many wondering whether South Africa will end up with 30% tariffs at the end of the day. Read Stephen Grootes’ analysis in the Daily Maverick.
