There are, says Tony Clarke, Managing Director at Rawson Properties, two divergent opinions in the South African property market as to just how seriously the political revolutions in North Africa are affecting South Africa. On the one hand, he says, there are those who feel that South Africa, having successfully established a democracy and the rule of law and having First World tax and financial infrastructures, is able to shrug off the impact of disorder elsewhere in the continent.
Some people, said Clarke, will point to the fact that in the countries undergoing change, tourism and property dealing are always among the economic activities most seriously hit, but in South Africa these are both showing signs of steady growth.
On the other hand, said Clarke, there are many overseas investors who will feel that these changes, coming on top of severe downturn of 2008/2009, make a fast recovery in South Africa even less likely than it was before.
'They will see these upheavals as further proof that the continent as a whole is an unreliable place in which to do business even when it can generate emerging economy returns. They will point to the fact that business activity in the affected states has been reduced to a standstill, municipal, hospital and other services are suffering and their stock markets '“ where they have them '“ have suffered 50% or more declines. These factors, the sceptics will say, are bound to impact on the South African economy even if we go into denial and refuse to admit that they are having an effect.
'The question now being asked '“ and one which has in fact been put to me is, 'How long will the states in revolution take to recover and will they establish to democracies?' Obviously none of us is yet in a position to answer these questions'
The good news, said Clarke, is whenever upheavals of this kind do occur, the international corporates and big investors tend to move in surprisingly fast once a semblance of order has been re-established '“ as, for example, they are doing now in Angola and the Democratic Republic of Congo.
'Africa has always shown the ability to generate fast commercial growth in the aftermath of major political changes. We in South Africa saw the big corporates move in, re-establish themselves very quickly after 1994 and many have successfully rebranded themselves since then. The Chinese, too, have shown an incredible ability to capitalise on the opportunities that followed political changes. The medium to long term outlook, therefore, is extremely promising. There will always be opportunities in Africa once the political changes have taken place'
Clarke commented, too, that the property market in South Africa is particularly vulnerable to the poor image generated by Zimbabwe.
'Here, again,' he said, 'the fact that what is undeniably a dictatorship has remained in place despite the devastation this has caused in the economy and has, despite our protests, affected the image of whole of Southern Africa. We can only hope that the revolutions in the north, if successful, will be followed by a revolution in Zimbabwe and the reestablishment of democracy there'
For further information contact Tony Clarke on 082 789 2752 or email tony@rawsonproperties.com.
