WHAT DOES 2024 HOLD IN STORE?
Category Advice
Myles Wakefield, CEO of Wakefields Real Estate, offers his thoughts on what 2024 holds for us, and what impact that will have on the property market.
Predictions are always a tricky thing," says Myles Wakefield, "But one thing I do know, I'd far rather be sitting here at the start of 2024, than 2023. We knew then, a year ago, that our interest rates were going to go up - central banks worldwide were doing that, and inflation was high. There was no doubt that would all add up to an upward cycle of interest rates, which is exactly what has happened. There are numerous other elements which have played out this year, but for property, affordability - interest rates - always plays a very significant role."
Wakefield concurs with those close to the financial rock face, that there'll be some interest rate relief next year: "From banks to economists, there's a general prediction that, off the back of decreasing inflation rates, we'll see a drop in the interest rate. At the last monetary policy meeting, there was voting consensus by all five of the MPC members, to hold the rates and not increase them. That was a significant shift from the previous meeting when two of the MPC members voted to raise the interest rate." He adds, "It's not only the promise of a rate cut, it's also the thought of this as the start of a downward interest rate cycle. The feeling is that the interest rate decreases for the year could total around ,75 basis points, starting with a ,25 basis point reduction around June."
Predicting the future is always only done with the assumption that nothing untoward occurs nationally and globally: "Much like Covid, so much has happened internationally this year which we could not have predicted," says Wakefield. "We, as South Africans, often link the poor performance of the rand to our not insignificant local problems, but essentially the impact stems from outside our borders and is largely beyond our control - it's so often about the dollar and global events. The good news is that there are clear signs that our not insignificant local inefficiencies are prompting vital private sector intervention, and we have solid reason to believe these collaborations will begin to bear fruit soon.
"Of course, next year's election will be closely watched by all - globally and locally - this one is crucial both nationally and provincially.
"Talking about predictions - and their unpredictability - I'd like to throw this quote into the mix. It's attributed to Abraham Lincoln and Peter Drucker, "The best way to predict the future is to create it." We're a resilient people, as is seen repeatedly. Bottom line, we live in a country - and a province - which we love, and want to make work. Apart from the natural beauty which surrounds KZN, there are undoubted positives happening in terms of major road infrastructure, important development projects on the go such as Westown and Club Med...and we can see progress in critical areas such as our port and solar generation.
"Many are rolling up their sleeves, and 'creating that future.'
"From a property perspective, a lowering of the interest rates combined with improved consumer sentiment, will be the catalyst needed. Let's focus on what we want to achieve next year, and action it. Let's be part of creating that future."
Author: Myles Wakefield
