Dear {{contact.first_name}}
Wars, rumors of wars, and decisive action in the middle east marked June as an historic month.
Things are happening and they are happening fast!
The last five (5) American presidents stated multiple times that Iran can never have nuclear weapons.
Yet, the world was still shocked when the 60-day deadline to negotiate a nuclear deal passed and there was decisive action taken. First by Israel and then by the US. This decisive action wiped out most of the Iranian nuclear capacity, as well as their military capacity, killing many high-ranking military leaders and nuclear scientists.
Over 40 years of talking culminated in 12 days of decisive action.
Markets around the world reacted surprisingly little. The US show of force seemed to have given major confidence that the West, led by the USA holds a very strong military position and is willing to act and back up its statements.
There is still significant uncertainty, but even the oil price recovered quickly - though Iran is a significant oil producer (mostly sold to China).
With Russia and China not willing to challenge the US by supporting Iran, they have learned their friends are more concerned with protecting their own interests than getting involved. Iran's 4 proxy terrorist groups, who they have funded and armed for decades were deafening in their silence.
A possible regime change is on the cards, and multiple peace treaties in the Middle East might become a reality in the near future. Hopefully ushering in a new era of peace in the Middle east few thought possible only a month ago.
On a local front, the US is not backing down and has boiled down its demands to four (4) things to mend the relationship with the SA Government.
Will the SA Government follow the path Iran did? Will it play games and ignore the four (4) common sense demands made by the US?
When times are tough, friends are few. Iran learned that this month - friendship with terrorists will get you some unwanted attention.
The true economic cost of BEE has now also been quantified. The study released in June highlighted the loss of 4 million jobs that could have been, all gone because of radical race-based laws. The study stated that the economy could have been roughly 70% bigger if there was no BEE.
It explains in detail that the unemployment crises and persistent poverty is a direct result of BEE laws that have hampered economic growth.
BEE also apparently enriched roughly 100 individuals to the tune of R1 trillion. Nothing broad about that. Putin would be proud.
You read that right, that is R10 billion on average per person for the top elites...
Yet, here we are, staring stricter racial laws in the face, while existing laws are already doing more damage to the SA economy and its' people than the B2 bombers did to Iran.
Public support shows 70% of those polled believe BEE only exists to enrich the politically connected.
So, what does this mean for the property market, you may ask?
1. Scrapping race-based laws and fruitless plans will allow the economy to grow at the pace it should (3-5% per year), helping businesses grow - leading to the creation of much needed jobs and closing the wealth gap rapidly.
2. Investment is built on trust that the opportunity is worth the risk and that those involved are willing and able to do what they say they will do.
3. External risk factors like bad governance undermines trust and increases risk, causing investment to dry up and growth to slow down.
4. Property prices grow in areas that are well governed, with a growing economically active population, as well as rational and stable legislation.
5. US tariffs will certainly hurt South Africa and the property market, as well as highlighting the risks in the SA economy to other potential investors.
6. Ironically the government already owns more land than it can give away. Over 2.5 million hectares, lying dormant and unproductive.
7. International sentiment is turning against rogue governments. Empty rhetoric and defiant words will not go unanswered forever.
Why protect/endorse hate speech in the first place?
Why have a Land Expropriation Act to be able to take land without compensation, when the government has more land than it can give away already?
Why double down on race laws that the public does not want?
Why prosecute those that fight or point out corruption? While those accused of corruption face no consequences.
Why is the crime rate in South Africa Africa so high? Who is benefitting?
These questions need answers.
International pressure for accountability, better laws and governance will not stop any time soon. Unless things change.
If things change politically for the better, South Africa will become an investment hotspot and could lead to unprecedented growth in the economy and property prices.
Making the right property decisions in this time is crucial to set yourself, your family, and your business up for success in the future.
Actively managing your risk is not optional in times like these, it is essential.
Things can change fast, and we are here to assist you every step of the way.
We offer a full scope of property services and can offer you a single point of contact for all your various property needs, Residential, Commercial and management, both short and long term.
Get in touch and let's talk about your property plans and needs, as well as how we can be of service.
Yours in property
Jacques Grove
Principal and Dreamer
